Apollo Micro Systems reported a 300 per cent rise in the consolidated net profit on a year-on-year (YoY) basis to Rs 6.56 crore in the quarter ended September 30, 2023. 
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Apollo Micro Systems reported a 300 per cent rise in the consolidated net profit on a year-on-year (YoY) basis to Rs 6.56 crore in the quarter ended September 30, 2023. Shares of Apollo Micro Systems continued its winning streak on Thursday as the multibagger defence stock hit an upper circuit to scale new record highs. The optimism in the stock continued on the stock after its quarterly earnings and positive commentary by the brokerage firms. Apollo Micro Systems reported a 300 per cent rise in the consolidated net profit on a year-on-year (YoY) basis to Rs 6.56 crore in the quarter ended September 30, 2023. Its revenue from operations surged more than 55 per cent YoY to Rs 87.16 crore for the second quarter of the ongoing financial year. Shares of Apollo Micro Systems surged 10 per cent, hitting the upper circuit limit, to Rs 146.72 during Thursday's trading session, commanding a total market capitalization of Rs 3,775 crore. The scrip had settled at Rs 133.39 in the previous trading session on Wednesday. Apollo Micro's net profit rose 67 per cent YoY to Rs 8.21 crore for the first half of the current financial year with revenue from operations rising 33 per cent YoY to Rs 144.85 crore in April-September 2023 period. The company board considered and approved setting up of a defence equipment manufacturing facility in Hardware Park, Hyderabad. Apollo Micro Systems' shares have surged about 375 per cent in the year 2023 so far and the stock has more than doubled investors' wealth in the last one month. The stock has rallied 560 per cent from its 52-week high at Rs 22.24 hit a year ago. The stock has zoomed 1,900 per cent from its covid-19 lows hit about 40 months earlier. Despite global uncertainty and supply chain instability AMS has delivered a decent set of performance during Q2, we expect the company will manage to achieve the growth guidance in FY24, said Choice Broking. AMS has participated in 55-60 programs, catering to Missiles, Naval Torpedoes and Underwater Mines. Choice Broking is confident about the growth story of the Apollo Micro Systems, due to its position (involvement in various strategic missiles from MoD and BDL) and faces very less competition. The domestic brokerage expects its revenue, Ebitda and net profit to grow at 41 per cent, 44 per cent and 74 per cent, respectively over FY23-26. "We have a positive outlook on AMS being sole supplier of underwater mines, favourable Government policies on self reliance on defence sector, rising defence spending across all segment, massive upcoming big ticket projects, company’s healthy order pipeline, would support the the growth story of the company," it said with an 'outperform' tag and a new target price of Rs 166. However, on a technical basis, analysts are suggesting investors to avoid the stock after the recent run-up. They suggest that investors should wait for near-term correction to enter the stock, considering its sharp and secular up move in the counter in recent times. Rajesh Palviya, at Axis Securities said that the stock is enjoying bullish momentum but suggested avoiding any fresh entry at current levels. In an interaction with Business Today TV, Palviya said that investors shall look to buy the stock if it falls down Rs 138-140 levels with a stop loss Rs 135.
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