This defence stock rallies 35% in just six sessions! What’s driving surge?

Defence stocks to buy: Shares of Apollo Micro Systems Ltd have been on a roll lately as the stock has soared as much as 36 per cent in the last six sessions, since the announcement of its quarterly earnings for the March 2026 quarter. The stock has been a Dalal Street favourite on the back of strong earnings, solid order book, Indian focus on defence manufacturing and expansion plans.

Shares of Apollo Micro Systems gained more than 12.6 per cent on Monday to hit its record high at Rs 400. The total market capitalization of the company neared Rs 14,300 crore mark. The stock has soared 36 per cent from its close at Rs 294.4 on Friday, May 15, while it is up 45 per cent on a year-to-date basis.

The stock has soared more than 3,500 per cent in the last five year from its level around Rs 11, while it has zoomed nearly 100 times from its Covid-19 lows around Rs 4.4 in March 2026. It has zoomed 1,100 per cent in the last three-years, while the stock has nearly tripled from its 52-week low at Rs 135.20 in May 2025.

For the quarter ended on March 31, 2026, Apollo Micro Systems reported a net profit at Rs 37.62 crore, up 168.7 per cent on year-on-year (YoY) basis, while its revenue increased 81.3 per cent YoY to Rs 293.26 crore for the March 31, 2026 quarter. Ebitda for the quarter rose 88 per cent YoY to Rs 67.64 crore, while margins improved to 23.1 per cent.

Apollo Micro’s net profit more than doubled to Rs 112.92 crore, while revenue soared 60.9 per cent to Rs 904.32 crore for the entire financial year 2025-26. The stellar financial execution is backed by sustained demand for indigenous defence electronics, satellite systems, and missile programs.

In his recent letter to shareholders,  Baddam Karunakar Reddy, Chairman and Managing Director at Apollo Micro Systems  said FY 2025-26 marked a significant year for the company as its long-held vision of supporting India’s defence self-reliance began taking shape at scale. Calling the letter Swavalamban, he described shareholders as ‘co-travellers’ who had backed a larger belief in building national strength through self-reliance.

Reddy said that after more than four decades of building Apollo, he had not seen another year with as much transformation. He recalled that the company had begun with the modest ambition of becoming a dependable Tier-1 supplier of mission-critical electronics for India’s strategic programmes.

He said the changing strategic landscape and the Defence Ministry’s indigenisation push had forced a key choice in FY 2025-26: remain a supplier or become an original equipment manufacturer. Apollo, he said, choose the harder path, with ownership of platforms, intellectual property and customer relationships.

The stock has hit the majority of the target prices given by the brokerage firms. Choice Institutional Equities had a target price of Rs 365 on the stock with an ‘add’ rating which was met post Q4 results. Similarly, HDFC Securities gave it a ‘buy’ with a target price of Rs 400, which is already met today.