Apollo Micro Systems Surges 8% on Q2 FY27 Results: Revenue +78% YoY, Record Order Book

The Quick Take

• Apollo Micro Systems Q2 FY27 revenue surged 78.2% YoY to Rs 639.44 crore on strong defence electronics order execution
• EBITDA rose 64.7% to Rs 164.91 crore and PAT climbed 49.6% to Rs 71.37 crore, reflecting strong operating leverage
• Shares rose 8% as a record order book signals continued revenue visibility for the defence electronics supplier

Apollo Micro Systems Limited, an Indian defence electronics company supplying mission-critical electronic systems and subsystems to Indian armed forces, reported strong Q2 FY27 results that drove an 8% intraday share price rally. Consolidated revenue from operations surged 78.2% year-on-year to Rs 639.44 crore, reflecting continued order execution from India's defence modernization pipeline. EBITDA excluding other income increased 64.7% to Rs 164.91 crore and profit after tax rose 49.6% to Rs 71.37 crore, with the strong growth coming despite the high base created by India's accelerated defence procurement in FY26. Management indicated a record order book that provides multi-quarter revenue visibility.

The Apollo Micro Systems result reflects a broader acceleration in India's indigenous defence electronics sector, where government initiatives under the Defence Acquisition Procedure and Atmanirbhar Bharat have significantly increased order flows to domestic suppliers. Defence sector peers including Data Patterns, Bharat Electronics Limited, and Paras Defence also benefit from the same order pipeline, suggesting the sector performance is structural rather than company-specific. Apollo's EBITDA margin at approximately 25.8% on the Q2 revenue base, despite revenue scaling rapidly, demonstrates that the business has achieved the execution quality to translate volume growth into proportionate earnings improvement.

Key forward indicators to monitor include Apollo Micro Systems' order book quantum at the Q3 FY27 results, which will confirm whether the record high is sustained as fresh defence orders are placed under the next fiscal year budget cycle. The company's ability to maintain EBITDA margins above 25% as revenue scales will determine whether the current premium valuation multiple is sustainable. The macro variable governing Apollo's growth trajectory is India's annual defence capital budget allocation, where the government has maintained a consistent 10-15% year-on-year increase over the past four years. Any slowdown in defence procurement orders from the Ministry of Defence would be the primary risk to the current growth trajectory.

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