Why did this defence stock soar 32% in 2 days? Zoomed 57% so far in May

Shares of Apollo Micro Systems hit a new high of ₹183.60, soaring 18% on the BSE in Tuesday's intra-day trade after the company received export order worth of ₹114 crore.

Share price of Apollo Micro Systems: Shares of Apollo Micro Systems hit a new high of ₹183.60, soaring 18 per cent on the BSE in Tuesday’s intra-day trade amid heavy volumes, in an otherwise subdued market, after the company received export order worth of ₹114 crore.

 

In the past two trading days, the stock price of this smallcap aerospace & defence company has zoomed 32 per cent. Thus far in the month of May 2025, it has rallied 57 per cent.

 

At 12:25 PM, Apollo Micro Systems was quoting 17 per cent higher at ₹180.70, as compared to 0.22 per cent decline in the BSE Sensex. The average trading volumes on the counter jumped over two-fold. As many as a combined 59.75 million equity shares representing 19.5 per cent of total equity of Apollo Micro Systems have changed hands on the NSE and BSE.  Follow Stock Market Updates Today LIVE

 

What is behind the rally in Apollo Micro Systems?

Apollo Micro Systems informed stock exchanges that in the ordinary course of its business, the company has received an export order valued at $13,366,500 (equivalent to approximately ₹113.81 crore) for the development of an Avionic System.

 

This project pertains to the development of an advanced avionics system intended for use in civil and military aircraft applications. However, due to the sensitive nature of the engagement, specific technical and programme details are bound by a Non-Disclosure Agreement (NDA) with the customer, the company said.

 

Meanwhile, on May 5, 2025, Apollo Defence Industries Pvt Ltd (ADIPL), a subsidiary of Apollo Micro Systems, entered into a Share Purchase Agreement (SPA) to acquire 100 per cent equity stake in IDL Explosives for a total consideration of ₹107 crore, in an all-cash transaction.  ALSO READ | What drove SEPC share price 11% higher on Wednesday, May 28? Find out here

 

IDL Explosives is engaged in the manufacture of full range packaged and bulk explosive specifically engineered for mining and infrastructure projects. Moreover it also offers an extensive range of cartridge explosives. It has served the Indian mining and Infrastructure Industry.

 

The explosive market size is expected to see strong growth in the next few years. The surge in government spending on the defense sectors in various countries including the US, China, India, Russia, the UK and France is projected to be a major driver for the growth of the explosive market during the period.

 

The growth in the forecast period can be attributed to an increase in territorial and political conflict, global population growth and urbanisation, increasing infrastructure development expenditure by governments and increasing construction activities.

Strong outlook

Looking ahead, the management of Apollo Micro Systems expects revenue to grow at a compounded annual growth rate (CAGR) of 45 per cent to 50 per cent over the next two years — driven solely by the core business, excluding any contribution from the recent acquisition.

 

This growth is underpinned by a healthy order book and multiple products entering the production phase. Operating margins are projected to improve in the first half of FY26 due to favorable operating leverage and product mix. However, ongoing and planned capital investments are expected to moderate margin expansion in the latter half of FY26 and into FY27.  ALSO READ | Here's why Bharat Dynamics shares were under pressure on May 28; details

 

Recent geopolitical developments — particularly the India–Pakistan conflict — have further accelerated demand for indigenous defence solutions. Several of our systems were successfully tested and demonstrated during this period, generating major interest and engagement across the defence value chain.

About Apollo Micro Systems

Apollo Micro Systems is a Hyderabad-based company engaged in the business of electronic, electro-mechanical, engineering designs, manufacturing and supply. The company specialises in the design, development and sale of high-performance, mission and time critical solutions to defence, space and home land security for the Ministry of Defence, government controlled public sector undertakings and private sector companies. Apollo Micro Systems also offers custom built COTS (Commercially off-the shelf) solutions based on specific requirements for defence and space customers. Its addressable industries include railways, automotive and home land security.