Apollo Micro Systems Limited Earnings Release Q2 & H1 FY25 - PDF

Date: 25th October, 2024 BSE Limited, National Stock Exchange of India Ltd., Department of Corporate Services Listing Department Phiroze Jeejeebhoy Towers, Exchange Plaza, C-1, Block G, Dalal Street, Mumbai – 400 001 Bandra...

Date: 25th October, 2024 BSE Limited, National Stock Exchange of India Ltd., Department of Corporate Services Listing Department Phiroze Jeejeebhoy Towers, Exchange Plaza, C-1, Block G, Dalal Street, Mumbai – 400 001 Bandra Kurla Complex, Bandra (E), Mumbai – 400 051 Scrip Code: 540879 Symbol: APOLLO ISIN: INE713T01028 Sub: Investor Presentation for the Quarter and half year ended 30th September, 2024 Ref: Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 Dear Sir/Madam, Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are herewith enclosing a copy of investor presentation for the quarter and half year ended 30th September, 2024. The copy of the disclosure is available on the website of the Company i.e. https://apollo-micro.com/ This is for your information and records. Thanking You Yours Faithfully FOR APOLLO MICRO SYSTEMS LIMITED BADDAM Digitally BADDAM signed by KARUNAK KARUNAKAR REDDY Date: 2024.10.25 AR REDDY 22:22:41 +05'30' KARUNAKAR REDDY BADDAM MANAGING DIRECTOR DIN: 00790139 EARNINGSRELEASE Ǫ2 & H1 FY25 October 25,2024 About us:  Apollo Micro Systems Limited was established in 1985 and has emerged as one of India’s leading electronic, electro-mechanical, engineering designs, manufacturing, and supplies company.  AMS specializes in the design, development, and sale of high-performance solutions that are critical for missions and time-sensitive operations.  We are a leading Indian manufacturer and supplier of diverse product solutions for various industries. We offer custom-built COTS (Commercial Off-the- Shelf) solutions tailored to the specific needs of defense and space customers. Our Capabilities: Product Based Solutions Avionic Systems Aerospace Systems Naval Systems Satellite Space Systems Homeland Security Ground Defence Systems On-board and ground On-board electronic On-board weapon Payload checkout systems Integrated surveillance Battlefield management, support equipment for weapon systems and electronics & ground and earth station systems, perimeter secure communications, Avionics ground support equipment support equipment for acquisition systems for security systems, anti surveillance, & controlling for missile systems torpedoes, decoys- jammers, space applications drones, drones, ads-b- various ground-based submarines & ships systems weapons. Service Based Solutions Electronic Manufacturing Electronic & IT & Software Weapon & Platform Hardware Embedded Software Services Mechanical CAD Services Integration Designing Design Development A Showcase of Our Cutting-Edge Products: Key Clients: Sector We Cater: Missile Defence Telecom Naval Defence Space Avionics And Many More… Ground Defence Homeland Security Manufacturing Capabilities: UPCOMING 55,000 Sq.ft 40,000 Sq.ft 3,50,000 Sq.ft Facility in IDA Facility in Adibatla, Facility in Hardware Mallapur, Hyderabad Park-II , Hyderabad Hyderabad Unit-I Unit-II Unit-III Our Key Differentiator: Four decades of expertise in the designing and assembling custom-built electronics and electro-mechanical solutions Our manufacturing plant includes a comprehensive ESS testing facility, compliant with DGQA standards. ISO and CEMILAC certified, and a DRDO-approved partner, actively contributing to key defense programs. As a leading Tier-I OEM manufacturer, we are scaling production capabilities and strengthening our supply chain through backward integration. AMS actively invests an average of 7%-8% of the revenue in R&D. A team of 300+ employees, including 150+ employees in R&D. AMS’s manufacturing facility is located in Hyderabad and has a built-up area of 55,000 Sq.ft. Our investment in a new weapon integration facility at Unit-III, with an additional 40,000 and 350,000 square feet currently under development. The order book is strong and reflects significant demand, positioning the company well for future growth and stability. AMS is recognized as both a collaborative R&D Design Service Provider and a Production Service Provider for Bharat Electronics Limited 700+ 60+ 150+ ON-BOARD PROGRAMMES IN DcPP AS INDIGENOUS TECHNOLOGIES SUB-SYSTEM PARTNER PROGRAMMES Consolidated Key Financial Metrics : (Rs. In Mn) Revenue from Operations PAT & PAT Margin EBITDA & EBITDA Margin 1800 180 12.00% 1,607.07 350 25.00% 1600 9.80% 24.53% 160 9.24% 10.00% 300 24.00% 1400 140 120 7.52% 8.00% 250 23.00% 1200 1000 871.63 912.02 100 200 21.35% 22.00% 6.00% 80 150 21.00% 800 60 4.00% 20.47% 600 100 20.00% 40 186.13 223.71 328.95 65.59 84.29 157.3 400 2.00% 50 19.00% 20 200 0 0.00% 0 18.00% 0 Q2FY24 Q1FY25 Q2FY25 Q2FY24 Q1FY25 Q2FY25 Q2FY24 Q1FY25 Q2FY25 PAT PAT Margin EBITDA EBITDA Margin ROE ROCE Debt/Equity 9.00% 8.40% 16.00% 14.98% 0.38 0.38 8.00% 14.00% 0.38 7.00% 0.38 12.00% 6.00% 0.38 10.00% 5.00% 5.99% 0.37 8.00% 10.10% 4.00% 0.37 6.00% 3.00% 0.37 0.37 2.00% 4.00% 0.37 1.00% 2.00% 0.37 0.00% 0.00% 0.36 FY24 H1FY25* FY24 H1FY25* FY24 H1FY25 *Annualised Consolidated Income Statement: Particulars (Rs. In Mn) Q2FY25 Q2FY24 YoY (%) Q1FY25 H1FY25 H1FY24 YoY (%) Revenue from operations 1,607.07 871.63 84.38% 912.02 2,519.09 1,448.54 73.91% Other income 5.93 2.45 5.83 11.76 4.68 Total Revenue 1,613.00 874.08 917.85 2,530.05 1,453.22 Total Operating Expenses 1,278.13 687.95 688.31 1,966.44 1,137.44 EBITDA (ex. OI) 328.95 186.13 77.73% 223.71 552.66 311.09 75.02% EBITDA Margin % (ex. OI) 20.47% 21.35% 24.53% 21.94% 21.48% Depreciation & Amortization 37.48 27.07 34.53 72.01 53.16 Finance Cost 72.77 71.82 76.04 148.81 147.06 PBT 224.63 87.25 118.97 343.60 115.56 Tax Expense 67.33 21.66 34.68 102.01 33.44 PAT 157.30 65.59 139.82% 84.29 241.59 82.12 194.19% PAT Margin % 9.80% 7.52% 9.24% 9.59% 5.67% Diluted EPS 0.52 0.22 0.29 0.80 0.28 *EBITDA is calculated excluding Other Income Consolidated Balance Sheet: Particulars As on 30th As on 31st Particulars As on 30th As on 31st (Rs. In Mn) Sept 2024 March 2024 (Rs. In Mn) Sept 2024 March 2024 Assets Equity & Liabilities PP&E 1,555.32 1,407.05 Equity Share Capital 306.49 282.36 Reserves and Surplus 5,441.34 4,902.84 Goodwill on Consolidation 0.19 0.19 Minority Interest 7.25 6.99 Other Intangible Assets 34.63 18.31 Shareholders Fund 5,755.08 5,192.19 Capital Work in Progress 564.17 348.37 Borrowings 250.67 95.59 Rights of Use Assets 50.78 17.79 Provisions 10.04 10.16 Other non-current assets 74.21 30.53 Lease Liabilities 34.37 10.52 Long term loans & advances 0.00 0.00 Deferred Tax Liabilities 368.38 336.75 Non-Current Assets 2,279.30 1,822.24 Non-Current Liabilities 663.46 453.03 Inventories 4,984.88 4,335.59 Borrowings 1,852.43 1,886.39 - Trade receivables 2,283.20 2,352.72 Lease Liabilities 16.07 7.14 Other financial liabilities 196.50 145.16 - Cash and cash equivalents 2.76 1.97 Trade Payables 1,932.92 1,657.36 - Short Term Loans & Advances 75.91 71.94 Other Current liabilities 62.29 133.21 Bank Balance 182.39 205.46 Provisions 4.99 3.27 Other current assets 764.26 772.49 Current Tax Liabilities 88.98 84.66 Current Assets 8,293.40 7,740.17 Current Liabilities 4,154.16 3,917.19 Total Assets 10,572.70 9,562.41 Total Equity and Liabilities 10,572.70 9,562.41 Consolidated Cash Flow: Particulars (₹ in Mn) H1FY25 H1FY24 Cashflow from Operations Activities 177.59 (220.72) Cashflow from Investing Activities (494.24) (260.44) Cashflow from Financing Activities 317.45 484.18 Net Change in Cash and Cash Equivalents 2.76 5.50 Business Update: We have secured significant Transfer of Technology (ToT) agreements with various DRDO laboratories, including Research Centre Imarat, Terminal Ballistic Research Laboratory, and Instrument Research and Development Establishment. These agreements encompass a range of advanced te chnologies essential for enhancing our defense capabilities. The technologies acquired include the Unified Interface Computer, Rotary Electro Mechanical Actuator, Guidance and Navigation al Kit, Payload Electronics, and a SAM System for UAV-Launched Precision Missiles. Additionally, we have obtained critical components such as Warheads for the UAV Launched Precision Guided Missile V2 (ULPGM-V2) and the Weaponization of Hand Held Thermal Imager with Laser Range Finder (WHHTI). These advancements significantly bolster our capabilities in defense technology and reinforce our commitment to innovation in this critical sector. In second quarter company has secured fresh orders worth ₹ 1,309.60 Mn which are yet to be executed excluding orders obtained and executed in the same quarter. We remain committed to fulfilling these orders with the highest level of quality and efficiency. During the Extraordinary General Meeting (EGM) held on August 16, 2024, the members approved the issuance of 2,45,00,700 Convertible Equity Warrants on a preferential basis, priced at ₹ 108.15 per warrant. Management Commentary: Commenting on AMS’s Performance, Management team stated: In our analysis of the quarterly and half-yearly performance for Q2 FY25 and H1FY25, we achieved a revenue growth of 84.38%, reaching ₹ 1,607.07 Mn in Q2FY25 compared to ₹ 871.63 Mn in Q2 FY24. This change can be largely attributed to execution of order book. Our EBITDA (excluding Other Income) mirrored this performance, increasing by 77.73% to ₹ 328.95 Mn in Q2 FY25, compared to ₹ 186.16 Mn in the same quarter last year. On a positive note, our PAT for Q2 FY25 increased to ₹ 157.30 Mn, up from ₹ 65.59 Mn in Q2 FY24, with margins reflecting an increase of 139.92% to 9.8 % from 7.52% Y-o-Y. When assessing our half-year performance, we observed a revenue increase of 73.91%, totaling ₹ 2,519.09 Mn in H1 FY25 compared to ₹ 1,448.54 Mn in H1 FY24. Our EBITDA improved by 75.02%, amounting to ₹ 552.66 Mn in H1 FY25 versus ₹ 311.09 Mn in H1 FY24, with margins recorded at 21.94% in H1FY25 as against 21.48% in H1FY24. Notably, PAT showed a significant increase of 194.19%, reaching ₹ 241.59 Mn in H1 FY25, up from ₹ 82.12 Mn in H1 FY24, with margins improving to 9.59% compared to 5.67% in the previous year. As we conclude Q2 FY25, we are pleased to report significant progress in our operations and a robust order book that reinforces our position in the defence sector. The expansion of our order pipeline, driven by strong demand across multiple industries, underscores the confidence our clients place in Apollo Micro Systems. The diversity and quality of our orders not only ensure a stable revenue stream but also enhance profitability, strategically positioning us to capitalize on emerging opportunities and sustain our growth momentum. We are encouraged by the government’s ambitious target of exporting over Rs 50,000 crore worth of defence equipment by FY 2028-2029. The substantial increase in defence production, which reached Rs 1,26,887 crore in FY 2023-24 an impressive 16.8 percent growth from the previous year highlights the positive momentum within the sector. The government’s commitment to strengthening India’s position as a global leader in defence manufacturing will further enhance our industry and support our strategic objectives. Looking ahead, we remain optimistic about our growth prospects. The rising demand for electronic solutions in the defence sector, coupled with our specialized technology offerings, positions us well to seize new opportunities. We are dedicated to fostering innovation, establishing strategic partnerships, and enhancing operational efficiency. We sincerely thank our employees, customers, and shareholders for their unwavering support. Apollo Microsystems Limited remains committed to delivering value. Your contributions are vital to our success. Together, we look forward to a prosperous future Disclaimer: Certain statements in this document may be forward looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, local political or economic developments, technological risks, and many other factors that could cause our actual results to differ materially from those contemplated by the relevant forward looking statements. Apollo Micro Systems Limited will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward- looking statements to reflect subsequent events or circumstance Contact Details: Apollo Micro Systems Limted Contact: +914027167000 - 99 Email: [email protected] Krunal Shah / Vinayak Shirodkar Captive IR Strategic Advisors Pvt. Ltd. Contact: +919372467194 Email: [email protected]/[email protected]