Apollo Micro Systems Ltd Q1 FY27 Earnings Call: Expects Rs. 2,500-3,000 Cr Order, Acquires Premier Explosives for Rs. 1,550 Cr

Apollo Micro Systems Ltd held its Q1 FY27 earnings call on August 08, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record June Quarter Delivers Strong Margins

• Q1 FY26-27 standalone revenue of Rs.156 Cr — highest-ever June quarter revenue; EBITDA of Rs.48 Cr and PAT of Rs.28 Cr reported.
• EBITDA margin of 31% and PAT margin of 18% — reflecting robust operational execution in the quarter.
• Consolidated order book of Rs.1,704 Cr as of 08 Aug 2026, comprising standalone orders of Rs.1,224 Cr and Ideal Exposure's Rs.480 Cr.
• IDL turned PAT positive in Q1 FY26-27 — after being EBITDA positive in Q4 FY25-26; management expects IDL to become "fully positive" by FY27-28.
• FY25-26 full-year revenue of Rs.764 Cr — with R&D investment of Rs.72.53 Cr, representing ~9.5% of revenue (management corrected an earlier misstatement of the R&D figure).

QRSAM and MIGM Programs Poised to Drive Inflection

• Management expects a single order of Rs.2,500–3,000 Cr in FY26-27 — from QRSAM and MIGM programs (AON already approved), lifting consolidated order book to Rs.3,500–4,000 Cr.
• Bharat Electronics (BEL) expected to place QRSAM order for 1,000 missiles — total program value of approximately Rs.11,000–12,000 Cr; Apollo's content per missile exceeds Rs.1 Cr across five subsystems (guidance, onboard computer, front/rear actuation).
• MIGM program: DAC approval received — management cited "Indian Navy expected to issue purchase order by Dec 2026/Jan 2027"; total budget of Rs.3,500–3,800 Cr, with Apollo expected to secure ~70% for 1,000 units delivered over three years.
• Additional orders expected: Akash NG (1,000 missiles) and Pinaka (2,000 units) — MoD has approved or is negotiating these; Pinaka unit component value ~Rs.85 lakhs, QRSAM/Akash NG >Rs.1 Cr per unit.
• Current HAL orders of Rs.100–150 Cr in FY26-27 — with an additional Rs.150 Cr order expected from HAL (period unspecified).
• "Very large orders" from QRSAM and MIGM expected in FY26-27 — production execution to start from FY27-28; management also noted LCA Mark 1A/2 supply of two systems.

Strategic Backward Integration into Energetics

• Signed definitive agreement to acquire 41.33% promoter stake in Premier Explosives for Rs.1,550 Cr cash — enables backward and forward integration for indigenously producing complete weapons, combining Apollo's electronics with Premier's propulsion systems.
• Total funds raised of ~Rs.3,300 Cr — ~Rs.2,500 Cr allocated for the acquisition, ~Rs.500 Cr for working capital, debt repayment, and general corporate purposes.
• Synergy: Premier's propulsion systems (space and weapon applications) combine with Apollo's weapon system electronics — positioning the combined entity as an integrated defense platform company.
• Current consumption of explosives/propellants in existing business is "very minuscule" — expected to increase from FY27-28 onward with MIGM and other rocket orders driving higher volumes.
• Margins expected to improve on in-house production — compared to the previous outsourcing model for explosives and propellants.
• Apollo and Premier will continue to operate separately for the foreseeable future; no decision on merging Ideal's explosive business with Premier until the acquisition is complete.
• Premier has provided filled 155 mm artillery shell samples to the Indian Army for testing — management expects continuous orders from the Indian Army post-testing; Apollo will supply fuses and associated items.

Autonomy, Smart Munitions, and Next-Generation Systems

• R&D spend of Rs.72.53 Cr in FY25-26 (9.5% of revenue) — management corrected an earlier misstatement; historical average of 6–8% of revenue, with the elevated figure reflecting accelerated development.
• Smart bomb programs: Pinaka (surface-to-surface) and Tara (air-to-surface) under development — guidance kit and range extension technology being developed; Air Force modernization requires "thousands of units" to be converted, as management cited.
• Company will "heavily invest" in autonomy across land, air, and sea during FY26-27 and FY27-28 — a new swarm of autonomous USVs program has already started; partnering with retired DRDO scientists and academic institutes for deep research.
• Anti-drone system: Make-II order received in July 2024 with 75-week trial period — trials not yet started; management committed to provide TAM guidance (domestic and export) in Q3 FY26-27.
• Project Kusha: 7 critical subsystems supplied; 150 km variant tested — 250 km and 500 km versions trials expected in coming months; management stated "order conversion likely in 2-3 years (FY2028-2029 to FY2029-2030)".
• Aerial bombs: 9 variants from 1 kg to 25 kg completed testing and received acceptance — recently cleared for production.
• 500 kg smart bomb A4 Snake program clarified — not related to Premier explosives; Premier will only support range extension (period unspecified).

SDD, ASW, Mines, and Export Milestones

• SDD program: pilot complete — 100% indigenously designed and developed initiation device successfully delivered to Indian Navy.
• ASW "Saver" semi-submersible system: prototype development order received — management cited "Indian Navy has sanctioned PSO orders" with "few thousands of crore" worth of orders expected from the program.
• ASW and IPREK programs: customer expects to complete pilots within 18 months — management expects orders approximately one year after pilot, potentially as early as FY27-28.
• More mines: handover to Indian Navy expected within August 2026 — orders expected only in FY27-28; DCP (Development cum Production Partner) contract to be signed within two weeks.
• Limpet mines: development completed — orders may commence from Q4 FY26-27 onward.
• Export revenue nil in Q1 FY26-27 — management expects meaningful breakthrough in FY26-27 and sizable orders in FY27-28; Unit 3 full production expected before end of FY26-27.
• Promoter pledge to be eliminated by Q1 FY27-28 — reduced in Q1 FY26-27; management expects to clear all pledged shares within the next year.

CAGR Target, Acquisitions, and Capital Allocation

• Revenue growth guidance of 40–45% CAGR for FY26-27 — reiterated on both consolidated and standalone basis; no specific EBITDA margin guidance provided (management stated "better than present").
• Separate revenue guidance for FY27-28 — to be provided at end of FY26-27, after Unit 3 becomes fully operational and export opportunities are evaluated.
• Two to three additional acquisitions planned — announcements expected by Q2 FY26-27; management indicated continued consolidation in the defense technology space.
• No guidance on further fundraising in FY26-27 or FY27-28 — management described it as "quite futuristic"; current preferential round pending exchange approval.
• Defense sector at an inflection point — management acknowledged "continued support from Ministry of Defence (MOD) and Government of India" driven by indigenization, advanced technology, and self-reliance.
• Q2 FY26-27 update — management confirmed it will provide an update during the next earnings call.