Key Events This Week
Feb 9: Q2 FY26 results reveal a strong 98% profit surge
Feb 10: Positive quarterly growth reported amid margin pressures
Feb 11: Quality grade upgraded to good, reflecting improved fundamentals
Feb 13: Week closes lower at Rs.232.50 (-3.45%)
Strong Q2 FY26 Profit Surge Drives Initial Gains
On 9 February 2026, Apollo Micro Systems Ltd announced its Q2 FY26 results, reporting a remarkable 98% surge in profits despite sector headwinds. The stock responded positively, closing at Rs.250.15, up 3.88% from the previous close of Rs.240.80. This performance was supported by a robust increase in revenue and operational scale within the aerospace and defence industry, buoyed by government spending and strategic initiatives.
The company’s quarterly net sales reached ₹252.22 crores in Q3 FY2026, marking a record high, while profit after tax (PAT) rose 40.6% year-on-year to ₹25.68 crores. Profit before tax excluding other income expanded by 21.62% to ₹30.66 crores, signalling healthy core profitability. These figures underscored Apollo Micro Systems’ ability to convert higher sales into bottom-line gains amid a competitive landscape.
Margin Pressures and Interest Costs Temper Optimism
Despite the strong top-line and profit growth, the company faced margin constraints due to rising interest expenses. Interest costs for the nine-month period ending December 2025 surged by 43.73% to ₹38.26 crores, reflecting increased borrowing or higher rates. This development raised concerns about net margin sustainability if such trends continue.
On 10 February, the stock declined 2.90% to close at Rs.242.90, reacting to the nuanced outlook presented in the quarterly update. The financial trend score moderated from very positive to positive, and the MarketsMOJO mojo grade was downgraded from Buy to Hold on 27 October 2025, reflecting a more cautious stance amid evolving fundamentals.
Fresh entry alert! This Small Cap from Electronics & Appliances sector is already turning heads in our Top 1% club. Get ahead of the market now!
- - New Top 1% entry
- - Market attention building
- - Early positioning opportunity
Quality Grade Upgrade Reflects Strengthening Fundamentals
On 11 February, Apollo Micro Systems received a quality grade upgrade from average to good, signalling notable improvements in its core business fundamentals. This upgrade was driven by robust sales growth averaging 31.24% annually over five years and EBIT growth of 43.03%, highlighting operational efficiency and profitability gains.
Return on equity (ROE) averaged 5.82%, while return on capital employed (ROCE) stood at 10.12%, indicating improved capital utilisation. The company maintained moderate leverage with a debt-to-EBITDA ratio of 2.48 and a net debt-to-equity ratio of 0.33, alongside an EBIT to interest coverage ratio of 2.67, underscoring prudent debt management.
Despite these positive fundamentals, the stock price declined 1.05% to Rs.240.35 on the day, reflecting short-term market caution. Institutional holding remains modest at 6.26%, while pledged shares are relatively high at 34.18%, factors that may influence investor sentiment.
Late-Week Decline Amid Broader Market Weakness
On 12 February, the stock marginally recovered by 0.25% to Rs.240.95, even as the Sensex fell 0.56%. However, on 13 February, Apollo Micro Systems closed sharply lower at Rs.232.50, down 3.51%, underperforming the Sensex’s 1.40% decline. This late-week weakness reflected ongoing concerns about rising costs and margin pressures, as well as broader market volatility impacting the aerospace and defence sector.
Why settle for Apollo Micro Systems Ltd? SwitchER evaluates this small-cap against peers, other sectors, and market caps to find you superior investment opportunities!
- - Comprehensive evaluation done
- - Superior opportunities identified
- - Smart switching enabled
Daily Price Comparison: Apollo Micro Systems vs Sensex
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-02-09 | Rs.250.15 | +3.88% | 37,113.23 | +1.04% |
| 2026-02-10 | Rs.242.90 | -2.90% | 37,207.34 | +0.25% |
| 2026-02-11 | Rs.240.35 | -1.05% | 37,256.72 | +0.13% |
| 2026-02-12 | Rs.240.95 | +0.25% | 37,049.40 | -0.56% |
| 2026-02-13 | Rs.232.50 | -3.51% | 36,532.48 | -1.40% |
Key Takeaways
Positive Signals: Apollo Micro Systems demonstrated strong revenue and profit growth in Q2 FY26, with a 98% profit surge and record quarterly sales of ₹252.22 crores. The upgrade in quality grade to good reflects improving operational efficiency, capital utilisation, and prudent debt management. Long-term growth rates remain impressive, with sales and EBIT expanding robustly over five years.
Cautionary Signals: Rising interest expenses, up 43.73% for the nine-month period, pose a risk to net margins if sustained. The stock underperformed the Sensex this week, declining 3.45% versus the benchmark’s 0.54% fall. The downgrade in mojo grade from Buy to Hold and the relatively high pledged share percentage (34.18%) suggest investor caution. Short-term volatility and margin pressures remain key risks to monitor.
Conclusion
Apollo Micro Systems Ltd’s week was marked by a strong start driven by robust quarterly results, followed by a gradual decline amid margin pressures and broader market weakness. The company’s fundamental improvements, including a quality grade upgrade, underscore its solid business model and growth potential within the aerospace and defence sector. However, rising interest costs and recent price volatility warrant a measured outlook. Investors should weigh the company’s long-term strengths against near-term challenges as the stock navigates a complex market environment.
Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →
