FIIs bought 2,10,22,112 shares & DIIs bought 42,40,713 shares: Multibagger defence stock in focus after receiving rating update from Acuité Ratings & Research

On Wednesday, shares of multibagger defence company gained 0.6 per cent to an intraday high of Rs 182.40 per share from its previous closing of Rs 181.35 per share. The stock’s 52-week high is Rs 212.55 per share and its 52-week low is Rs 88.10 per share.

The buzzing stock name is Apollo Micro Systems Ltd (AMS)

Acuité Ratings & Research has upgraded Apollo Micro Systems Limited's (AMSL) long-term rating to 'ACUITE A-' from 'ACUITE BBB+' for its Rs. 452.50 Cr. bank facilities, and its short-term rating to 'ACUITE A2+' from 'ACUITE A2' for its Rs 150 crore bank facilities. The outlook remains 'Stable'. This upgrade reflects significant improvements in AMSL's scale of operations in FY2025, driven by a 30 per cent CAGR in earnings over the past four years. The rating is further bolstered by a substantial equity infusion of Rs 742.24 crore0 in FY2026, which is expected to strengthen the company's capital structure and liquidity. Additionally, the acquisition of IDL Explosives Ltd by AMSL's subsidiary will create a fully integrated Tier-1 defence OEM, enhancing manufacturing capabilities and broadening its solution portfolio within India's defence supply chain.

Despite these positives, the rating is somewhat constrained by the working capital-intensive nature of AMSL's operations, characterised by high Gross Current Asset (GCA) days, although there has been an improvement in FY2025. The company's susceptibility to risks inherent in tender-based businesses and long project gestation periods also remains a factor. However, the healthy order book of Rs 600.00 crore as of March 2025, coupled with the promoters' extensive experience of over 30 years in the aerospace and defence sectors, provides strong revenue visibility and supports the upgraded rating.

About the Company

Established in 1985, Apollo Micro Systems is at the forefront of creating, constructing, and validating crucial electronics and electromechanical solutions for sectors such as aerospace, defence, and space. The company is renowned for its commitment to research and development, resulting in notable projects such as torpedo-homing systems and underwater mines.

According to Quarterly Results, net sales increased by 9 per cent to Rs 161.77 crore and profit after tax (PAT) decreased by 23 per cent to Rs 13.96 crore in Q4FY25 compared to Q4FY24. In its annual results, the net sales increased by 51 per cent to Rs 562.07 crore and profit after tax (PAT) increased by 81 per cent to Rs 56.36 crore in FY25 compared to FY24.

Apollo Micro Systems is experiencing strong growth, driven by a robust order book and successful execution of defence programs. This includes their strategic acquisition of IDL Explosives Ltd. to become a fully integrated Tier-1 defence OEM. The company projects a 45-50 per cent revenue CAGR over the next two years and recently secured an export order valued at USD 13,366,500 (approximately Rs 113.81 crore) for an advanced avionic system, reinforcing their commitment to innovation and India's self-reliant defence infrastructure.

The company falls under the BSE Small-Cap Index with a market cap of over Rs 5,500 crore. In June 2025, FIIs bought 2,10,22,112 shares & DIIs bought 42,40,713 shares and increased their stake to 7.16 per cent and 1.61 per cent respectively, compared to March 2025. The stock gave multibagger returns of 1,290 per cent in just 3 years and a whopping 1,550 per cent in 5 years.

Disclaimer: The article is for informational purposes only and not investment advice.