Apollo Micro Systems Ltd Q1 FY27 Results Analysis: Revenue Surges 88%, Margin Compresses 926 bps

Apollo Micro Systems Ltd's Q1 FY27 numbers came in soft, with revenue of Rs. 251.29 Cr (+88.10% YoY) and PAT growth of +45.40% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Consolidated revenue surged 88% YoY driven by IDL acquisition, but standalone core grew only 16.7%, far below the 45-50% CAGR guidance. EBITDA margin compressed to 21.38% from 30.64% due to IDL's low margins and rising depreciation. PAT grew 45% YoY, but auditor flagged subsidiary going-concern issues. Post-quarter acquisition of Premier Explosives and order wins provide visibility but execution on core guidance remains a concern.

Key Investment Insights

Key Positives

• Consolidated revenue grew 88.1% YoY to Rs.251.29 Cr, beating pre-call expectations
• PAT attributable to owners grew 45.4% YoY to Rs.26.91 Cr
• Standalone PAT margin of 17.86% exceeded the internal target of 15%
• Basic EPS grew 27.1% YoY to Rs.0.75 despite a 11.4% increase in equity base from warrant conversions
• Finance costs declined 10.9% YoY despite consolidation of IDL
• Post-quarter order wins of Rs.134 Cr and Rs.55 Cr plus prototype awards under IPREK and SAVIOR-ASW programmes

Risk Factors

• Standalone revenue growth of only 16.7% YoY is far below the guided 45-50% CAGR, signaling persistent customer approval delays
• Consolidated EBITDA margin compressed from 30.64% to 21.38% YoY, driven by IDL's low-margin business and rising depreciation
• IDL Explosives contributed only Rs.0.41 Cr PAT on Rs.95.40 Cr revenue, a 0.4% margin, dragging consolidated profitability
• Auditor flagged going-concern material uncertainty for subsidiaries with negative net worth
• Deferred tax charge of Rs.7.84 Cr inflated effective tax rate to 33.06% vs current cash tax of only 12.24%