Smallcap multibagger defense stocks rise 5% after Rs 420 crore order gain from Coal India

Shares of Apollo Micro Systems rose 5% to a day’s high of Rs 272.50 on Wednesday, December 31, after the defense-focused company announced new orders worth around Rs 420 crore, including a major contract from a subsidiary of Maharatna PSU Coal India. With today’s rise, the stock is within touching distance of its upper circuit of Rs 272.70.In an exchange filing earlier today, Apollo Micro Systems said its outgoing subsidiary, IDL Explosives Limited, has secured an ongoing contract for the supply of bulk explosives to subsidiaries of Coal India Limited. The value of this contract is Rs 419.39 crore. In addition, IDL Explosives has also received an export order worth Rs 1.5 crore for supply of explosive cartridges.

The company said the cumulative value of orders received by IDL Explosives is Rs 420.89 crore. The orders have been awarded in the normal course of business and further enhance the company’s position in the explosives and defense related segments.

The latest order win follows another important announcement the company made last week. On December 26, Apollo Micro Systems announced that it had secured an order worth Rs 100.25 crore from a private company for supply of unmanned aerial systems, with the Ministry of Defense as the end user.

Earlier this month, the company announced a strategic greenfield expansion in Telangana aimed at scaling up its defense manufacturing capabilities. The expansion, which will be undertaken jointly with its subsidiaries, is expected to strengthen the company’s position in the Indian defense manufacturing ecosystem.

The project involves setting up new production facilities for the production and filling of missile warheads, rocket motors and artillery systems and ammunition of small, medium and large caliber. The facilities will also support the development of complete ammunition systems for artillery, missiles and other armaments.

The expansion is one of the largest undertaken by the company to date and is aimed at boosting its ability to meet rising demand from both domestic and international markets as India steps up efforts to build a stronger indigenous defense manufacturing base. The stock has performed strongly this year amid a broad rally in defense-related names. Apollo Micro Systems, a small-cap defense player, has delivered multibagger returns, with its shares up 125% this year and 2,100% over five years.

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