2,000 Per Cent Returns: Multibagger Defence Stock Jumps Over 6 Per Cent as Company Expands Defence Capabilities By Acquiring IDL Explosives For Rs 107 Crore In Cash
The stock gave multibagger returns of 700 per cent in just 3 years and a whopping 2,000 per cent in 5 years.
On Monday, the share price of Apollo Micro Systems Ltd jumped over 6 per cent as the company announced its expansion.
Apollo Micro Systems Ltd (AMS) is expanding its defence capabilities through the acquisition of IDL Explosives Limited. Apollo Defence Industries Pvt Ltd (ADIPL), a subsidiary of Apollo Micro Systems Ltd, has entered into a Share Purchase Agreement to acquire 100 per cent equity stake in IDL Explosives Ltd. for a total consideration of Rs 107 crore, in an all-cash transaction. IDL Explosives Ltd., originally incorporated as Indian Detonators Ltd. in 1961, is the First Indian owned explosive company and is part of the Hinduja Group, a large transnational conglomerate with investments across several sectors and a presence in over 100 countries.
DSIJ's 'Large Rhino' service recommends blue chip stocks of Large Cap companies that have leadership positions in their category. If this interests you, download the service details here.
IDL Explosives Ltd. is involved in the manufacture of a full range of packaged and bulk explosives for mining and infrastructure projects, and also offers a range of cartridge explosives. This acquisition is strategic for Apollo Micro Systems Ltd., positioning them for greater impact in the defence sector by consolidating core, high-value assets and know-how. It aims to create an integrated and indigenized end-to-end solution provider across the munitions and weapons value chain. This integration will reduce external dependencies, enable collaborative development and co-production, and foster long-term customer relationships. Apollo is transitioning from a pure-play electronics company to a full-spectrum defence solutions provider.
The acquisition is expected to drive margin expansion through cost efficiencies enabled by vertical integration, enhance the ability to pursue large-scale, high-value projects, and allow Apollo to leverage IDL's brand reputation to unlock cross-selling opportunities and accelerate market penetration. Furthermore, it will enhance Apollo's global footprint, extending its reach into high-potential markets, and the company is diversifying into new classes of advanced weapon systems. This diversification will reduce dependency on any single product line and broaden Apollo's addressable market.
The explosive market is experiencing strong growth, driven by factors such as increased government spending on defense and geopolitical tensions that have intensified supply chain disruptions. Apollo Micro Systems Ltd.'s existing product portfolio includes complete weapon systems, and the company has received Transfer of Technology (TOT) from the Defence Research and Development Organisation (DRDO) in Explosives.
Management views this acquisition as a major step in Apollo's vertical integration into complete weapon system solutions, with the goal of becoming a complete Tier-I Design cum Manufacturing OEM in domestic and global markets.
As of May 05, 2025, Apollo Micro Systems Ltd stock trades at Rs 123, reflecting an 8.43 per cent return over the past one year and a remarkable 785.84 per cent return over the past three years, signalling multibagger potential in the Small-Cap space. The stock hit a 52-week high of Rs 144.25 and a low of Rs 91.2. With a market capitalisation of Rs 3,591 crore and a Price-to-Earnings (PE) ratio of 64.89, the company demonstrates both growth potential and investor interest.
Apollo Micro Systems is known for its specialised work in electronic and electromechanical systems, catering to the defence and aerospace sectors. With a strong innovation pipeline and recent expansion through acquisition, the company is poised to play a pivotal role in India’s defence manufacturing ecosystem.
This strategic acquisition underlines the company’s ambition to scale and diversify its operations, strengthening its case for long-term investors tracking opportunities in small-cap defence manufacturing stocks.
Disclaimer: The article is for informational purposes only and not investment advice.