Apollo Micro Systems Reports Strong Q2 FY24-25 Growth Amid Elevated Valuation Concerns

Apollo Micro Systems, a small-cap player in the electronics components industry, has recently undergone an evaluation adjustment. This revision reflects the company's notable financial metrics and market position. In the second quarter of FY24-25, Apollo Micro Systems reported a significant annual growth rate in operating profit of 29.25%. The net profit showcased an impressive increase of 139.79%, contributing to a series of positive results over the last five consecutive quarters.
The company's profit before tax, excluding other income, reached Rs 21.87 crore, marking a growth of 158.21%. Additionally, the profit after tax stood at Rs 15.70 crore, with a growth rate of 139.3%. The return on capital employed (ROCE) was recorded at 12.32%, indicating a strong operational efficiency.

Despite these positive indicators, the stock's valuation appears elevated, with an enterprise value to capital employed ratio of 5.4. Furthermore, 33.17% of promoter shares are pledged, which has increased by 7.87% in the last quarter, potentially impacting market sentiment.

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