For years, Apollo Micro Systems Ltd. stayed under the radar, known quietly for its rugged electronics; embedded systems, sensors, and control modules built to survive the harshest battlefields. It was a trusted partner to ISRO and DRDO, but always behind the scenes. That is, until recently.
In the past year, Apollo has leapt beyond its comfort zone. From being a low-profile supplier, it’s become a full-spectrum player in India’s rapidly evolving defence landscape. At the heart of this transformation is its acquisition of IDL Explosives: a 64-year-old ammunition manufacturer with a rich legacy. By stitching together high-performance electronics and munitions, Apollo has reimagined itself as a one-stop shop for defence solutions.
By the numbers:
- Market cap: ₹5,892 crore
- FY25 revenue: ₹562 crore, up 51% YoY
- FY25 net profit: ₹56 crore, up 81% YoY
- Order book (as of March 2025): ₹615 crore, with plans to triple by year-end
- Debt-to-equity ratio: 0.55
What’s working?
Apollo’s core remains its rugged, high-reliability electronics; technology trusted by India’s missile programs and naval platforms. But the real game changer has been its ability to pivot upstream. With IDL Explosives in the fold, Apollo now commands a complete product suite: from advanced avionics and drone modules to cartridges, rocket warheads, and underwater mines. This vertical integration strengthens Apollo’s position in a market hungry for indigenised defence solutions, as the government ramps up spending by 9.5% this year.
Recent wins like the ₹113.8 crore export order for avionic systems signal Apollo’s growing global credibility. In the sensitive world of defence, such deals don’t come easy; trust and proven performance are paramount. Apollo’s steady R&D investments (7-8% of revenue) have yielded breakthroughs in next-gen guidance systems, underwater tech, and smart seeker modules are exactly the innovations needed for a modern battlefield.
New bets
Apollo’s approach is deliberate: move beyond subcontracting and own the entire lifecycle. That’s the story behind its partnerships with Munitions India Ltd. for advanced weaponry, collaborations with Troop Comforts Ltd. for anti-drone and anti-aircraft systems, and work on torpedo tracking and software-defined technologies. It’s a clear strategy: build capability in every vertical, from ruggedised electronics to full-scale munitions.
This push isn’t just domestic. IDL Explosives’ long-established export channels (20 countries) and “CE certified” status open doors to global markets, from Africa and the Middle East to Southeast Asia. By integrating manufacturing and system integration under one roof, Apollo positions itself for the bigger, more complex contracts that smaller players rarely get.
On-ground execution
Execution has been steady and deliberate. Apollo’s two new facilities in Hyderabad; spanning 390,000 sq. ft. are purpose-built to handle missile sub-systems, UAV payloads, and MRO for complex weapons systems. Meanwhile, management says its core defence electronics business could grow 45–50% CAGR over the next two years, powered by a robust order book and fresh platforms coming online.
The ₹416 crore capital infusion from its preferential issue, which saw backing from LIC Mutual Fund and the promoter group, further strengthens its hand. The funds are earmarked for working capital, R&D, and capacity expansion in aerospace and homeland security; fuel for the company’s ambitious plans.
What’s not working
Apollo’s growth story isn’t without risks. Operating cash flow is just ₹11 crore far below net profit as working capital is tied up in slow-moving government contracts. Promoter pledging has spiked to 48%, up from 20% last year, raising concerns about financial stability if the stock faces turbulence. And trading at over 100x earnings and 10x book value, the stock is priced for perfection. In a sector known for order lags and policy swings, any misstep could be costly.
Strategic takeaway
Apollo Micro Systems Ltd. is chasing relevance in an industry that’s finally opening up to private players. Its evolution from a behind-the-scenes electronics supplier to a vertically integrated OEM is emblematic of India’s broader push for indigenous capability. In an era where India’s defence policy is shifting gears, Apollo is positioning itself to be more than just a supplier; it’s staking its claim as a serious contender in the global defence supply chain.
Final pour
If Apollo gets this right, it could be laying the foundation for a new chapter in India’s defence narrative. In a world of geopolitical tensions and rising defence budgets, the real question isn’t whether Apollo will grow, but how much of this evolving story it will shape.
