This article first appeared on GuruFocus .
Release Date: May 19, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Apollo Micro Systems Ltd ( BOM:540879 ) achieved its highest ever quarterly and annual revenue, demonstrating strong growth and operational discipline.
-
The company reported a significant year-on-year revenue growth of 61% and an EBITDA growth of 69% for FY26.
-
Apollo Micro Systems Ltd ( BOM:540879 ) has successfully reduced its working capital cycle from 626 days in FY21 to 359 days in FY26.
-
The company has made substantial investments in R&D, amounting to 8% of revenue, and reported zero attrition within its R&D team.
-
Apollo Micro Systems Ltd ( BOM:540879 ) is expanding its presence in the defense sector with new acquisitions and strategic partnerships, including a tri-party alliance with the Indian Navy and IIT Chennai.
Negative Points
-
The company's large inventory and trade receivables remain a concern, with management acknowledging the need to address these issues.
-
Despite plans to reduce promoter pledge to zero, it remains at 39%, indicating slower progress than anticipated.
-
The standalone revenue growth was slightly lower than the guidance, attributed to pending approvals and timing issues.
-
The subsidiary, Ideal Explosives, has been loss-making, although it is undergoing a transformation phase.
-
There are concerns about the potential impact of global supply chain disruptions on production timelines and costs.
Q & A Highlights
-
Warning! GuruFocus has detected 7 Warning Signs with BOM:540879.
-
Is BOM:540879 fairly valued? Test your thesis with our free DCF calculator.
Q: What kind of order inflows does Apollo Micro Systems expect for FY27 and FY28 to sustain revenue growth? A: Unidentified_4 (Director of Operations) stated that they expect large ticket projects to come through this financial year, which will significantly increase their order book size. They anticipate continuing to grow at a similar rate backed by the size of the order book.
Q: Can you elaborate on Apollo's capabilities and offerings in air defense systems like QR Sans and Kusha? A: Unidentified_4 mentioned that they have a decent presence in both the Kusha and QR Sans programs, with various systems like fans and actuations being part of these programs. They are also developing RF seekers for a couple of programs.
Q: What is the status of Unit 3 construction, and how do you plan to address the large inventory and trade receivables? A: Unidentified_4 explained that Unit 3's civil work for phase one is complete, and machinery installation is ongoing. They expect inventory levels to improve as production orders increase, reducing holding days as revenue grows.
Q: What are the revenue expectations for Ideal Explosives, and how will it impact Apollo's consolidated margins? A: Unidentified_4 noted that Ideal Explosives is undergoing a transformation phase, and while it was loss-making, they expect significant improvements in operational losses. They plan to provide more guidance from Q3 onwards.
Q: How does Apollo plan to capitalize on the global demand for explosives, particularly in Europe? A: Unidentified_4 stated that they are expanding into the explosives sector, supported by their subsidiary Ideal Explosives. They are actively pursuing opportunities in Europe and expect to receive orders soon.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
