Apollo Micro Systems Limited delivered a strong set of audited financial results for the quarter and year ended 31 March 2026, with both standalone and consolidated metrics reflecting significant year-on-year growth. The Board of Directors, at their meeting held on 18 May 2026, approved the standalone and consolidated financial results and also recommended a final dividend for the financial year. In a subsequent concall update, the company announced an upcoming Greenfield project in Hyderabad and indicated expectations of increased profits as production orders increase. Alongside the results, Managing Director Baddam Karunakar Reddy addressed shareholders in a letter titled Swavalamban, describing FY 2025-26 as a breakthrough year and laying out the company's ten-year vision to evolve into a global Original Equipment Manufacturer (OEM) of defence platforms. The statutory audit was conducted by S.T. Mohite & Co., Chartered Accountants, Hyderabad, who issued audit reports with unmodified opinion on both standalone and consolidated financial statements.

Standalone Financial Performance

Apollo Micro Systems reported a sharp improvement in its standalone financials for the year ended 31 March 2026. Revenue from operations grew to ₹76,485.32 lakhs from ₹56,206.92 lakhs in the prior year, while total income rose to ₹78,219.03 lakhs from ₹56,611.75 lakhs. Net profit after tax more than doubled to ₹12,057.88 lakhs compared to ₹5,724.16 lakhs in the prior year. For Q4, the company reported EBITDA of 604M rupees against 360M rupees in the same quarter of the prior year, with the EBITDA margin expanding significantly to 29.43% from 22.28% year-on-year. The following table summarises the key standalone financial metrics:

The Q4 EBITDA performance is further highlighted below:

On the standalone balance sheet, total assets stood at ₹2,29,473.00 lakhs as at 31 March 2026, compared to ₹1,26,223.76 lakhs as at 31 March 2025. Equity share capital was ₹3,572.92 lakhs and other equity stood at ₹1,28,660.42 lakhs as at 31 March 2026.

Consolidated Financial Performance

On a consolidated basis, the group—comprising Apollo Micro Systems Limited, Ananya SIP RF Technologies Private Limited, Apollo Defence Industries Private Limited, Apollo Strategic Technologies Private Limited, and IDL Explosives Limited—reported revenue from operations of ₹90,432.38 lakhs for FY26, up from ₹56,206.92 lakhs in the prior year. Consolidated net profit after tax for the year was ₹10,738.01 lakhs against ₹5,635.76 lakhs in the prior year. The key consolidated financials are presented below:

Consolidated total assets were ₹2,36,850.83 lakhs as at 31 March 2026, compared to ₹1,29,948.85 lakhs as at 31 March 2025. Net profit attributable to owners of the company for FY26 stood at ₹11,292.01 lakhs, while the non-controlling interest recorded a loss of ₹554.00 lakhs for the year.

Key Corporate Developments

The Board meeting of 18 May 2026 resolved several significant corporate matters. In the concall update, the company further announced an upcoming Greenfield project in Hyderabad, adding geographic specificity to the Greenfield expansion previously disclosed. The company also expects increased profits as production orders increase. The following table summarises key corporate developments and strategic milestones achieved during FY26:

IDL Explosives Acquisition and Share Warrants

During the year, Apollo Micro Systems issued 3,80,67,058 share warrants at an issue price of Rs. 114/- per warrant, each convertible into one equity share of face value of Rs. 1/- each at the same issue price. Of these, 2,37,59,986 warrants were converted into equivalent equity shares up to 31 March 2026, with the balance 1,43,07,072 share warrants remaining outstanding and pending conversion as at the end of the quarter. Apollo Defence Industries Private Limited (ADIPL), a subsidiary of the company, completed the 100% acquisition of IDL Explosives Limited on 15 November 2025 for a consideration of Rs. 10,700 lakhs, with IDL consolidated as a step-down subsidiary with effect from 16 November 2025. According to the MD's letter, the Coal India ban that had constrained IDL's largest end-market has been formally removed, restoring access to mining customers across the country. ADIPL has supported the restructuring of IDL's balance sheet, with long-term debt fully repaid and cash position growing approximately five-fold year-on-year. IDL holds licenses under the IDR Act, 1951 to manufacture HMX (50 MTPA) and TNT (500 MTPA). The company operates in a single segment, namely electromechanical components and systems and allied components and services.

Strategic Vision: From Subsystems to Platforms

In his shareholder letter, MD Baddam Karunakar Reddy articulated a clear strategic shift for Apollo Micro Systems—from being a Tier-1 supplier of mission-critical electronics to becoming a full-fledged OEM of defence platforms. The company has been awarded a DPIIT industrial license for the manufacture of Unmanned Aerial Vehicles and allied defence equipment, as well as a DPIIT License under the Arms Act for manufacturing Missiles, Torpedoes, Mines, and Ammunitions. The company's domain expansion spans three operational theatres, as outlined below:

The company's technology investments are concentrated across three pillars: Radio Frequency (RF) systems including Multi-Channel 55 kW Laser DEW, Artificial Intelligence for sensor fusion and autonomous targeting, and Inertial Navigation Systems (INS) encompassing MEMS-based INS, Fiber Optic Gyro, and Ring Laser Gyro. Apollo Micro Systems also serves as the approved production agency for the Multi-Influence Ground Mine (MIGM), designated as Vighana, developed under DcPP with DRDO.

Macro Tailwinds and Ten-Year Vision

The MD's letter highlighted two structural tailwinds underpinning the company's long-term strategy. On the domestic front, the Government of India has set a target of ₹3 lakh crore in domestic defence production and ₹50,000 crore in defence exports by 2029, with approximately 75% of the Capital Acquisition budget reserved for domestic defence industries. On the global front, world military expenditure crossed USD 2.7 trillion in 2025—the highest in real terms since the end of the Cold War—with defence market growth projected at +8.8% CAGR to 2029. The key macro targets are summarised below:

The company's Vision FY 2036 aims to grow as a global OEM with diversified revenue streams across land, air, and sea domains, deepening its presence in Indian markets while expanding internationally, and strengthening research and development in RF, AI, Autonomy, and Inertial Navigation technologies.

Risk and Responsibility

In his shareholder letter, MD Baddam Karunakar Reddy also addressed execution risks inherent to the company's growth ambitions. He noted that defence is a long-cycle business where programmes run for years before yielding serial production, is capital intensive in nature, and carries structurally high customer concentration. The MD acknowledged that geopolitical shifts and execution risk are ongoing realities, and committed to open communication through both successes and setbacks. He reaffirmed the company's core values of honest engineering, optimal capital allocation, and an absolute commitment to the armed forces as the guiding principles for the road to FY 2036.

apollo micro systems has allotted 13,000 equity shares of face value Re. 1 each following the exercise of warrants by an investor. The Securities Allotment Committee of the Board of Directors approved the allotment on May 12, 2026, upon receipt of the warrant exercise price and a duly signed application form from Ms. Lata Dhiraj Shah.

The allotment was made pursuant to the exercise of 13,000 warrants out of the 2,50,000 originally allotted to the investor. The company received an aggregate amount of ₹11,11,500 as the warrant exercise price. The newly issued shares rank pari passu with the existing equity shares of the company.

Allotment Details

The conversion of warrants has increased the issued and paid-up share capital of the company from ₹35,72,92,440 to ₹35,73,05,440. This capital now consists of 35,73,05,440 equity shares of Re. 1 each. The issue price for the warrants was ₹114 per warrant, with ₹85.50 payable upon conversion, representing 75% of the issue price.

Investor Information

The allotment was made to a single investor, Ms. Lata Dhiraj Shah, who applied for the conversion of 13,000 warrants. Following this transaction, the investor continues to hold 27,000 warrants. The original warrant allotment to 30 allottees totaled 3,80,67,058 warrants, of which 2,37,72,986 have now been converted into equity shares.

Unexercised warrants will lapse if not exercised within 13 months from the date of their allotment, leading to the forfeiture of the amount paid by the warrant holders.