Rs 1,432 Crore Order Book: Multibagger Defence Stock in Focus as DAC Clears Rs 52,000 Crore Defence Acquisition Proposals

Apollo Micro Systems Ltd is likely to remain in focus after the Defence Acquisition Council (DAC) approved capital acquisition proposals worth about Rs 52,000 crore for the Indian Armed Forces. The approvals are expected to strengthen the country's defence capabilities while creating significant long-term opportunities for companies involved in indigenous defence manufacturing.

Chaired by Defence Minister Rajnath Singh, the DAC granted Acceptance of Necessity (AoN), an in-principle approval for procurement, covering a range of advanced defence systems for the Indian Army, Navy and Air Force. Although final contracts generally follow over the next 12 to 18 months, the approvals provide greater visibility for future procurement programmes.

For the Indian Army, the DAC approved the procurement of the AKASH TARANG anti-Unmanned Aerial Vehicle (UAV) Electronic Warfare System, Man Portable Anti-Tank Guided Missile (MPATGM) Systems, Medium Range Surface-to-Air Missile (MRSAM) Weapon System, Very Short Range Air Defence System (V-SHORADS), Active Protection System for Tanks and Jet-Based Kamikaze Drone System. These platforms are intended to strengthen air defence, anti-armour capabilities, electronic warfare and battlefield survivability.

The Indian Navy received approval for the procurement of the Multi-Influence Ground Mine (MIGM), Naval Shipborne Unmanned Aerial System (NSUAS) and the establishment of a Land Based Testing Facility (LBTF) for Electric Propulsion Systems. The Indian Air Force also secured approval for the procurement of a Fixed-Wing Based High Altitude Pseudo Satellite (FW-HAPS) and other proposals aimed at enhancing intelligence, surveillance, reconnaissance and communication capabilities.

Several of these approved programmes align closely with Apollo Micro Systems' product portfolio and technology partnerships. The Hyderabad-based defence electronics company is the DRDO-approved Development-cum-Production Partner (DcPP) for the MIGM programme after receiving technology transfer for MIGM-Vighana in August 2025. The company also has capabilities in missile systems, anti-tank guided missiles, loitering munitions and electronic warfare solutions, supported by the lifetime arms manufacturing licence granted by the DPIIT in April 2026.

The approvals also include programmes such as MPATGM, V-SHORADS, AKASH TARANG, Jet-Based Kamikaze Drones and MRSAM, all of which are areas where Apollo Micro Systems has established capabilities or participates through development and production partnerships. This positions the company to benefit as these programmes move towards the contracting stage.

Investor sentiment around the stock has remained strong. Apollo Micro Systems shares gained 5.32 per cent to Rs 463 during Friday's early trade, extending the rally seen since late June. The gains have also been supported by expectations that Bharat Electronics Ltd (BEL) could receive a QRSAM order worth around Rs 30,000 crore, a programme where Apollo supplies critical subsystems, including the Integrated Avionics Unit and Actuator.

The DAC approvals come after a record financial performance by the company in FY26. Revenue increased 60.9 per cent to Rs 904 crore, while fourth-quarter profit surged 168.7 per cent. Apollo Micro Systems also reported its highest-ever consolidated Order Book of Rs 1,432 crore, equivalent to nearly 1.6 times its trailing annual revenue. The management has guided for a revenue CAGR of 45 to 50 per cent through FY27, along with EBITDA margins of 26 to 28 per cent.

While the AoN approvals do not immediately translate into confirmed orders, they significantly improve the company's medium-term business outlook. Industry estimates suggest the MIGM programme alone could represent a lifetime opportunity of around Rs 2,000 crore, while supplies linked to the QRSAM programme could generate an additional Rs 800 crore to Rs 1,000 crore over time.

Meanwhile, Apollo Micro Systems' board is scheduled to meet on July 6 to consider a preferential fundraising proposal, which could provide additional capital to support future growth as defence orders continue to increase.

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