Stock of this aerospace & defence company has zoomed 63% so far in June

Shares of Apollo Micro Systems hit a new high of Rs 55.25, zooming 355 per cent in past one year, as against 19 per cent rise in the S&P BSE Sensex.

Shares of Apollo Micro Systems (AMS) were locked in 5 per cent upper circuit and hit a new high of Rs 55.25 in Tuesday's intra-day trade, with only buyers seen on the counter.

Around 3.5 lakh shares changed hands, with pending buy orders for 8.9 lakh shares on the NSE and BSE.

The stock of aerospace & defence company froze 5 per cent upper circuit for the seventh straight day, surging 41 per cent during this period. It zoomed 63 per cent so far in the month of June, as compared to less than 1 per cent rise in the S&P BSE Sensex. In the past one year, the stock zoomed 355 per cent, as against 19 per cent rise in the benchmark index.

AMS is anticipating a healthy growth in order book from recent orders released to various defence public sector undertakings (PSUs). Revenue is expected to grow by 45 per cent-50 per cent in the current financial year 2023-24 (FY24) led by growth opportunities in defence.

Earnings before interest, taxes, depreciation, and amortisation (Ebitda) margins, on other hand, are expected to be in the range of 22 per cent-23 per cent, led by increasing in scale of operations, the company said.

On spurt in volume and price, AMS clarified that the increase in the price or volume of the scrip of the company is purely due to market conditions and the cmpany is in no way connected with any such increase in price or volume.

On May 4, 2023, the stock turned ex-date for stock split in the ratio of 1:10 i.e. sub-division of 1 equity share of Rs 10 each into 10 equity shares of Re 1 each. The rationale behind the spilt was to enhance liquidity in the capital market, widen shareholder base and make shares more affordable to small investors.

AMS has become one of the leading companies in the Indian defence sector for electronic manufacturing, hardware designing, weapon integration, and platform integration. AMS specialises in design, development, and sale of high-performance solutions that are critical for missions and time-sensitive operations.

The company’s products are used across multiple industries including Aerospace Systems, Ground Defence, Space, Avionics Systems, Homeland Security, and Transportation. The company’s clientele consists of prominent government institutions such as the Defence Research and Development Organisation (DRDO), Indian Army, Indian Navy, Defence Public Sector Undertakings (DPSU’s), as well as private players like Adani, L&T and many more.

In the financial year 2022-23 (FY23), AMS clocked revenue of Rs 298 crore, up 22.34 per cent year-on-year (YoY), on the back of an increase in the orders executed. Ebitda margins, too, grew to 21.63 per cent from 18.77 per cent in FY22 on the back of lower material cost and continued focus on efficient cost management.