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Check Before You Invest : Apollo Micro Systems Ltd

BSE: 540879 NSE: APOLLO ISIN: INE713T01028
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Defence

Snapshot

Q.1 Which industry/sub-sector does Apollo Micro Systems Ltd belong to?
Apollo Micro Systems Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Defence segment.
Q.2 Is Apollo Micro Systems Ltd a good quality company?
Apollo Micro Systems Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Apollo Micro Systems Ltd undervalued or overvalued?
Apollo Micro Systems Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 119.23 64.86
Price to Book 8.53 3.26
Price to Sales 16.11 6.07
EV to EBITDA 59.47 27.64
Q.4 Is Apollo Micro Systems Ltd a good buy now?
Apollo Micro Systems Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Apollo Micro Systems Ltd?
Apollo Micro Systems Ltd revenue growth is 51.2% for FY-2025, which is above its 5-year CAGR of 17.98%, indicating faster growth.

Q.2 Gross Profit margin of Apollo Micro Systems Ltd?
Apollo Micro Systems Ltd Gross profit margin which is the profit after deduction of direct costs, is 17.6% for FY-2025, which is above its 5-year median of 14.5%, indicating increasing margins.

Q.3 Operating Profit Margin of Apollo Micro Systems Ltd?
Apollo Micro Systems Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 23.1% for FY-2025, which is above its 5-year median of 21.64% indicating increasing margins.

Q.4 Net Profit Margin of Apollo Micro Systems Ltd?
Apollo Micro Systems Ltd Net Profit Margin is 10.18% for FY-2025, is above its 5-year median of 6.41%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 17.6 14.5
Operating Profit Margin (%) 23.1 21.64
Net Profit Margin (%) 10.18 6.41

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Apollo Micro Systems Ltd?
Apollo Micro Systems Ltd Return on Asset is 5.16%, which is above its 5-year historical median of 2.95%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Apollo Micro Systems Ltd?
Apollo Micro Systems Ltd Return on capital employed is 14.52% for FY-2025, which is above its 5-year historical median of 10.78%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Apollo Micro Systems Ltd?
Apollo Micro Systems Ltd Return on equity is 10.25% for FY-2025, which is above its 5-year historical median of 5.8%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Apollo Micro Systems Ltd?
Apollo Micro Systems Ltd Cash conversion cycle is 300 days, below its 5-year historical median of 387 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.51 0.45
ROE (%) 10.25 5.8
ROCE (%) 14.52 10.78
Cash Conversion Cycle 300 days 387 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Apollo Micro Systems Ltd?
Apollo Micro Systems Ltd Debt-to-Equity ratio is 0.48, which is above the industry average of 0.09, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Apollo Micro Systems Ltd?
Apollo Micro Systems Ltd Debt to cash flow from operations is 24.58, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Apollo Micro Systems Ltd?

Q.1 Promoter shareholding and pledge status of Apollo Micro Systems Ltd?
Promoters hold 51.98% of the Apollo Micro Systems Ltd, with 39.92% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Apollo Micro Systems Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Apollo Micro Systems Ltd vs industry peers?
Apollo Micro Systems Ltd revenue CAGR is 17.98%, compared to the industry median CAGR of 18.15%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 51.2 18.2
Gross Profit Growth (%) 76.8 33
Operating Profit Growth (%) 53.6 27.2
Net Profit Growth (%) 78.1 33.2
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.51 0.56
ROE (%) 10.25 12.34
ROCE (%) 14.52 15.01
Cash Conversion Cycle (days) 299.87 155

Valuation & price assessment

Q.1 Stock return of Apollo Micro Systems Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 98.66% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 98.7% 108.1% 149.6%
Q.2 Valuation ratios of Apollo Micro Systems Ltd vs historical?
The current P/E ratio of 119.23 is higher than its historical median of 64.86, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 119.23 64.86 64.82
Price to Book 8.53 3.26 7.10
Price to Sales 16.11 6.07 8.19
EV to EBITDA 59.47 27.64 33.96

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