Multibagger defence stock edges closer to record high after Q3 results 2025. Buy or sell?

Multibagger defence stock: Shares of Apollo Micro Systems surged 7.4% in intraday trade on February 5, reaching ₹138 per share, as investors reacted positively to the company’s December quarter performance, which was released post-market hours on Tuesday. Today’s rise has brought the stock near to its all-time high of ₹157 apiece.

The company reported a 62.5% jump in revenue to ₹148 crore in Q3 FY25, compared to ₹91 crore in Q3 FY24. This growth was driven by the successful execution of its order book, reflecting strong demand and operational efficiency.

EBITDA also showed strong growth, rising 58.1% year-on-year (YoY) to ₹37 crore in Q3 FY25. However, the EBITDA margin remained stable, with a minor 70 basis point decline, settling at 25.6% compared to Q3 FY24.

Net profit surged 83.1% to ₹18 crore, compared to ₹9.9 crore in Q3 FY24, with the PAT margin improving by 140 basis points to 12.3% in Q3 FY25. 

With a solid order book, a strategic focus on India’s growing defence sector, and a commitment to innovation and operational excellence, the company is well-positioned to capitalize on emerging opportunities. “Our focus on leveraging key defence initiatives will ensure that we are on track to create sustained value for our stakeholders,” Apollo Micro Systems stated in its earnings filing.

Earlier in January, Apollo Micro Systems and Garden Reach Shipbuilders & Engineers signed a five-year Memorandum of Understanding (MoU) for a business partnership focusing on joint research and development (R&D), co-production, and export of underwater weapons & vehicles, underwater mines, underwater communication systems, and air defence systems.

The collaboration also includes the supply of advanced weapons and electronic systems for both defence and non-defence industries.

Wealth Creator

The company’s shares, which were trading at ₹12.40 apiece two years ago, have soared 956% to their current level of ₹131. Over the last four years, the stock has delivered a staggering 1,719% return. From June 2022 to November, the stock experienced a sharp, one-way surge, generating an impressive 1,370% return for investors.

Despite the recent downturn in mid-and small-cap stocks, the stock is currently 16.5% below its recent high of ₹157 per share.

Apollo Micro Systems, a Hyderabad-based company, specialises in the design, development, and sale of high-performance, mission-critical solutions for defence, space, and homeland security. It serves the Ministry of Defence, government-controlled public sector undertakings, and private sector entities.

Is there more upside left in the stock?

Avinash Gorakshkar, Head of Research at Profitmart Securities, said, “Apollo Micro Systems’ share price is rising following its strong Q3 FY25 results, and the optimistic guidance shared by the company’s management. The defence company reported a substantial increase in revenue, driven by a strong order book during the third quarter of the current fiscal year. Additionally, the company has posted a significant rise in net profit, and management expects a steady flow of orders, which is likely to sustain its robust performance in the upcoming quarters.”

Mahesh M. Ojha, AVP, Research at Hensex Securities, stated, “Apollo Micro Systems’ share price is currently trading in the ₹118–142 range. If it breaks above the ₹142 mark on a closing basis, the defence stock could soon reach ₹155. Should it sustain above ₹155 for a few sessions, we expect it to touch ₹175 and ₹185 per share in the medium term.”

He, therefore, advised shareholders to hold the stock while maintaining a stop loss at around ₹115 for the aforementioned short-term and medium-term targets. “Fresh investors can also consider momentum buying at the current market price, adopting a buy-on-dips strategy until the stock sustains above the ₹120 per share mark,” he added.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.