Apollo Micro Systems Share Price Surges 30% This Week: Should You Buy, Sell or Hold This Multibagger Defence Stock?

Shares of Apollo Micro Systems Ltd. (AMS) have taken the spotlight on Dalal Street this week, surging over 30% in just five trading sessions, driven by bullish sentiment in the defence sector and strong institutional interest. The rally comes amid broader optimism around government-led defence indigenisation and a sharp uptick in orders from public sector undertakings and the Indian Armed Forces.

With this week's performance, Apollo Micro Systems has cemented its status as a multibagger stock, having delivered more than 250% returns over the past year. Investors are now evaluating whether this is the right time to buy, hold, or book profits.

What’s Fueling the Rally?

Apollo Micro Systems is a Hyderabad-based company engaged in the design, development, and production of mission-critical electronic systems used in aerospace, defence, and space applications. The company counts organisations like DRDO, ISRO, and Bharat Electronics Ltd. among its key clients.

This week’s rally follows two major triggers:

1. Large Order Wins: AMS announced fresh orders worth over ₹130 crore from a state-owned defence enterprise for rugged electronics and embedded systems. This is seen as a testament to the company's growing credibility in the defence ecosystem.

2. Positive Sectoral Tailwinds: With the Indian government aggressively pushing for defence indigenisation under the Atmanirbhar Bharat initiative, defence and aerospace stocks have been attracting investor interest. The recent announcement of a ₹1.5 lakh crore defence capital outlay in the Union Budget 2025-26 added to the bullish momentum.

Market Expert Views

Market analysts have mixed opinions about whether investors should chase the stock at current levels or wait for a correction.

“Apollo Micro Systems has shown strong earnings growth and is backed by robust order visibility. However, after a 30% rally in one week, the stock is looking slightly overheated in the short term,” said Ravi Menon, Senior Analyst at Geojit Financial Services. “Long-term investors can consider holding, while new entrants may wait for some consolidation.”

“The entire defence basket is seeing strong traction, and AMS stands out due to its niche capabilities in electronics and systems integration,” noted Neha Bhandari, Research Head at Axis Securities. “From a fundamental perspective, the outlook remains strong, especially with rising defence exports and local manufacturing.”

Financial Performance Snapshot

Apollo Micro Systems has reported impressive financials in recent quarters. For the quarter ended March 2025, the company posted:

• Revenue: ₹185 crore (up 48% YoY)

• Net Profit: ₹21 crore (up 72% YoY)

• EBITDA Margin: 22%, supported by operational efficiencies

• Order Book Position: Over ₹850 crore, providing revenue visibility for the next 2–3 years

Its return ratios have also improved, with ROCE at 19.5% and ROE at 18.2%, indicating better capital utilisation.

Technical Analysis: Overbought or More Room to Run?

From a technical standpoint, AMS has seen a breakout from its recent consolidation zone. The stock crossed the crucial resistance level of ₹140 with strong volumes and is now trading at around ₹156 (as of May 29).

“The Relative Strength Index (RSI) is at 82, which indicates an overbought zone. While the momentum is strong, a near-term pullback cannot be ruled out,” said Suresh Nair, Technical Analyst at Motilal Oswal. “A healthy support lies at ₹135–138. Investors should watch for profit booking at higher levels.”

Investor Outlook: Buy, Sell or Hold?

Whether to buy, sell or hold Apollo Micro Systems depends on an investor's risk appetite and investment horizon.

• Short-Term Traders: Consider booking partial profits or trailing stop-losses given the sharp near-term rally.

• Long-Term Investors: AMS remains a strong play on India’s defence and aerospace theme. Those with a multi-year horizon can hold, as the structural story is intact.

• New Investors: May look to accumulate on dips or after a period of consolidation. Valuations are rich at the moment, and chasing the stock could expose one to volatility.

Conclusion

Apollo Micro Systems has undoubtedly positioned itself as a key beneficiary of India’s self-reliance push in defence manufacturing. With a robust order pipeline, improving financials, and strategic relevance, the company remains a strong candidate for long-term portfolios. However, given the sharp rally, a cautious and phased investment approach is advisable.