Author: Nishtha Mehrotra | EQMint

Synopsis:

• • Apollo Micro Systems reported 72% year-on-year growth in consolidated revenue to ₹388.15 crore in Q2 FY27.

• • Rising working capital requirements, higher borrowings and an unusually high standalone tax rate remain key concerns.

• • Auditors highlighted going-concern risks at certain subsidiaries, while the company continues investing in capacity expansion.
    
    

Apollo Micro Systems Limited (NSE: APOLLO, BSE: 540879) reported strong financial results for the quarter ended September 30, 2026, with consolidated revenue rising 72% year-on-year to ₹388.15 crore. Consolidated profit after tax (PAT) increased 54% to ₹46.15 crore.

Standalone revenue grew 36% to ₹306.29 crore, while standalone PAT rose 44% to ₹47.73 crore. Operating margins also improved, supported by lower material costs as a proportion of revenue and operating leverage.

However, the growth comes with several concerns. Standalone tax expenses reached ₹49.83 crore against pre-tax profit of ₹97.56 crore, implying an effective tax rate of approximately 51%.

Working capital remains another challenge. Receivables increased to ₹605.27 crore and inventory reached ₹883.33 crore. Standalone operating cash flow for the first half was only ₹12.43 crore, while borrowings rose to approximately ₹597 crore.

The company is also expanding capacity, with standalone capital work-in-progress reaching ₹294.61 crore. Meanwhile, auditors flagged concerns about the financial position of certain subsidiaries, including negative net worth, cash losses and significant borrowings.

What to Watch: Investors will monitor cash-flow improvement, the sustainability of the tax rate, subsidiary performance and the conversion of capacity expansion into revenue.

Source: https://www.bseindia.com/xml-data/corpfiling/AttachLive/a0fe42c7-ca8e-46e5-aee3-4db07a7f30af.pdf

Disclaimer: This article is for information purposes only and is not investment advice.

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