Why Is Systematix Bullish on Apollo Micro systems?

Apollo Micro Systems has already gained more than 46% YTD, sharply outperforming the benchmark. Yet Systematix has initiated coverage with a Buy rating and ₹570 target price, implying around 40% upside from its reference price of ₹390. So, what is the brokerage seeing that could justify further upside? The Bigger Defence Opportunity Systematix's core thesis is that Apollo Micro Systems could transition from a supplier of electronic components and subsystems into an integrated defence-system manufacturer. The company has exposure to missile, rocket, torpedo and underwater-mine programmes, with capabilities spanning: Guidance systems Actuators Onboard computers Critical defence electronics Systematix sees a potential ₹12,000 crore opportunity over the next 24 months, including around ₹7,000 crore from mines and torpedoes and another ₹3,000–4,000 crore from programmes such as QRSAM, Akash-NG and Pinaka. Apollo is also planning around ₹600 crore of capacity expansion and pursuing acquisitions that could strengthen its capabilities in explosives, warheads, propulsion and other high-energy materials. Why Is the Brokerage Still Bullish? The interesting part isn't simply the ₹570 target price. It is the potential change in Apollo's business mix and position in the defence value chain. If the company successfully moves from component-level supply toward complete weapon-system integration, its addressable market could expand significantly, with potential implications for both revenue growth and margins. Systematix expects revenue to increase from ₹904 crore in FY26 to ₹2,460 crore by FY28, while adjusted profit is expected to rise from ₹107 crore to ₹336 crore.