Apollo Micro Systems Limited (APOLLO) February 9, 2026 Conference Transcript

Ladies and gentlemen, good day and welcome to the Apollo Microsystems Q3F526 Earnings Conference Call hosted by ICICI Securities Ltd. Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star 10-0 on your touch-tone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Vikash Singh. Thank you, and over to you, sir.

Thank you. Good evening, everyone. Welcome to Apollo Microsystem Q3-FI26 and 9-month-FI26 research conference call. From the management side, we have with us Mr. Badham Karunakar Reddy, Managing Director, Mr. Adepele Krishna Saikuma, Whole-Time Director of Operations, and Mr. Sudarshan Chilubetu, CFO. Without taking any much time, I will hand it over to Mr. Reddy for his opening remarks. Over to you, sir.

Good morning, this is Karnakaridi, Managing Director, joined with me Mr. Saikumar and our CFO, Mr. Silver Surashin. Mr. Saikumar will be presenting, then after questioning this thing, answering this thing, I will be responding to you. Go to Saikumar, please.

Thank you, sir. Good evening, everyone. Thank you for being with us today. It's always a privilege to engage with our valued investors and provide updates on our performance strategy and future outlook. I am pleased to share that we have delivered our highest ever quarterly and highest ever nine-month revenue marked by consistent execution, operational discipline and a strong commitment to indigenization and the Make in India initiatives. I trust you have had the opportunity to review our financial results. Letter to shareholders, press release, tier sheet, and investor presentation. This marks our third interaction for the fiscal year 2026. We are pleased to begin with two significant milestones that mark our continued growth and global progress. First, we are also pleased to announce that an additional acquisition by ADIPL, which is expected to be completed before the end of this financial year, This acquisition will significantly enhance our organic growth and overall strength. Looking ahead, we expect revenue to grow at least at a category of 45 to 50% over the next three years, which has always been our guidance since a few quarters, solely by the core business, excluding any contribution from the recent acquisition or the future acquisitions that we do in this financial year. Our EBITDA, excluding other income, rose sharply by 33%. reaching 50 crores in Q3 FI 26. FAT registered at 25% YOY increase to 23 crores compared to 18 crores in the previous year same quarter. The order book as on 31st December stood at 39.05 crores on a consolidated basis. Considering 9 months FI 26, We have delivered highest-ever performance in our history. Our revenue from operations has spiked 53% to 611 crores, up from 400 crores in 9 months FI 25. This trend has been continued in the EBITDA, excluding other income, which has increased by 61% to 151 crores, compared from 93 crores in 9 months FI 25. EBITDA margin has been expanded by 134 basis points in 9-month FI26. Our BAT has climbed by 67% to 71 crores, up from 42 crores in 9-month FI25. These results underscore our continued operational excellence and reaffirm the strength of our growth trajectory in FI26 and beyond. We have evolved from being a subsystem and system manufacturer to establishing ourselves as a full-fledged weapon system manufacturer, a significant milestone in our journey of growth and technological excellence. Building on 41 years of technological excellence, we are poised to evolve into a multidisciplinary defense system powerhouse to drive next-generation innovation. Our vision is bold, built on strong fundamentals, and an unwavering commitment to create value for all our stakeholders. Thank you. With your continued trust and support, we now look forward to addressing your questions.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Sukrit D. Patil from iSight Fentrate Private Limited. Please proceed.

Good evening to the team. I have two questions. My first question to Mr. Baddam is, looking ahead, how do you see Apollo microsystems balancing between expanding defense and aerospace contracts, investing in new technology and protecting profitability? As a demand for advanced electronic growth, what will guide your decision on which of these areas should get the strongest focus in the coming quarter? That's my first question. I'll ask my second question after this.

Yeah, see, like, you know, the last quarter result also, I was talking to your people. If you see the government of India has already, DAC has already, Defense Acquisition Council has cleared already, you must be knowing. One program is going to bulk production, and another program is Akashenji also is going for a few hundred members. And if you see these two programs, our major contribution is there, Akashenji also, our contribution is there. And the other side, naval systems also, limited series production we have completed, heavyweight torpedo, and we are now expecting bulk production order, we are expecting, and also, we are also doing the complete, one of the programs like mine programs, underwater mine programs, three, four programs we are doing. One program complete test trials also completed, and any time this month, I am expecting a different situation called DIC clearance also we are expecting. That is going to be a major order what we are looking for immediately. And other programs also, underwater mine site, if you see, couple of other variants also, we are doing limpet mine, two variants of limpet mines, we are also doing, you know, like, deeper depth, there is a program called mood mine, that mood mine also, anytime we are expecting, we are going to sign DCPP partners, the DCPP partners, we are going to sign with the DRDO, that is also, we are already, fortunately, you know, the mood mine, that clearance already happened. The fund is in place. Only thing, user trials we are able to perform, once we complete user trials, so we are expecting a very big order, like a medium movement, also going to be a big game-chain order for Apollo Microsystems. And many other programs, like short-range programs, short-range missile programs, our participation is there, long-range, like Agni-5, Agni-1 also going for a bulk production. Our major contribution is there in these programs also. And as I explained to you in the previous meeting, missile technology side, if you see, we have good contribution, subsystem-wise, if you see, 63% of our contribution is there. You name any program, from short range, 4-kilometer range to 5,000-kilometer, any missile kind of thing, if you consider, 63% of subsystems, in fact, Apollo micro-system is supplying to RDO. More than 80-90 programs. And already we have become DCPP partners for a couple of programs. We are also expecting two more programs to be participated any time DRDO is going to decide. We are expecting one novel-based missile program, anti-ship program. We are expecting that also, I think, this month DRDO is going to decide. And as you know, like we had one program, we are doing RGP60 program. We have done, I think, lab tests and all we have done. We are going for a, I think, trial test anytime we are planning for a technical trial. And other programs like Complete Weapon Fight Talk. And one of the programs like Anti-Drone. We are making that also, I think, we are going for trial next month. We are going for trials. All carcally checks and all lab tests and all we have completed, all simulations and all we have completed. The product is ready, the first quarter we are going for trials. And many, many other programs are doing, at least a couple of hundred programs, a few hundred programs we are doing. Every program, our contribution is there, as I explain to you. Naval side also, we have contribution, and if we see land-based systems Like Launcher Systems in Dallas, so we have contributions. I am a technology, if you see also, our contribution is there. LCA Mark II is there, AMCA is there, AMCA also we are participating. Already we started doing a couple of subsystems. LCA Mark II also, we are doing almost something like five subsystems, very critical systems, design development activities we are doing. You know, like, explosive company also, like, we acquired ideal explosive. We are now going for a good expansion. We want to produce defense-grade explosive. And I think we are going to start another six months time. We are going to start producing defense-grade explosive also. That is another plan is going on. And also, we are planning to acquire a couple of companies where we don't have presence. I think, in fact, I think before this financial year-end, at least some three companies we are going to, we are going for a while.

Due diligence. Due diligence is going on. At least one we will be able to close for sure.

Yeah, so everything goes well. Three companies are in pipeline, and at least one or two companies. Equation we want to complete before this financial year-end. That's all. Thank you.

Thank you. My second question to Mr. Chiluveru is, again along the similar lines, As Apollo Microsystems plans for the next few quarters, what financial signals or metrics will be most important in guiding you to take the decisions on cost control, working capital, and capital allocation for R&D and capacity exploration? How do you see this lever shaping the company's ability to protect the margins and deliver sustainable growth in the coming few quarters? How do you understand your plan of action on this?

As you already know, if you visualize, We have been spending around 9 to 10% of our outlay, our top line, as a R&D expenditure. Since our company is a veteran battery's R&D, unless we do R&D, we cannot sustain and we cannot grow in the business. That's why, sizeable amount is allocated for R&D, and we have even availed a term loan sanctioned by one of the banks, 75 crores. Lots of programs we have taken up for R&D. And around 50 to 60 crores we are going to spend in the near future on R&D itself. That is one part. The other part is we have massive expansion plan. As you know, page 3 at Hardware Park we have already commissioned partly in the October end with a 150 crores outlay. With a term loan of 110% from State Bank of India, with our margin, 150 golds worth of projects we have already implemented, and another 2.5 acres we have acquired and we have started civil works for further expansion, and also we have recently got allotment of another 5 acres of land, adjacent to the existing expansion plant from government of Telangana, where we will be spending. At least 100 to 150 crores for further expansion. So it will be a state-of-the-art project once we complete the entire project in the 10.5 acres of land. That is our expansion plan. And as far as growth is concerned, we have been growing at a stage year of 30 to 35 percent for the last 2-3 years. The same tempo, if everything goes well, whatever we are having plans of getting the orders and all that, if it fructifies, and we will be growing at 35 to 40 percent in the years to come. As far as the order book is concerned, we are comfortable, and with the addition of ideal exposures, we will be growing into a full-pringed... Weapon manufacturer thing. Earlier we were having only a subsystem manufacturer. Now we can manufacture the entire missile. So, order book is good. And as far as finance is concerned, we have mobilized the funds as you know through preferential issue. And bank finance is also made available to us as long as we need it.

Yeah, one more thing I want to share with you. See, like cross-cutting wise, we are now going for, we have implemented SAP, and we started migrating into SAP. And also, we are doing one automation, complete all factories now. We are going for automation. We are almost implementing industry 4.0 standard we are implementing. You know, the management can see the complete missionary, how missionaries utilize, how mine power is working, what is the missionary running hours, and if any of my customers want to see also, remotely they can see. The status and all, and in the text form also, the available customer can monitor. Main elements are also micro-level monitoring, what we want to do, where manpower utilization and machinery utilization properly we want to do, because now unit two, we have two units are there, explosive, if you see explosive side, four, five units are there, and third unit, third unit itself, some four units, within 10 acres, we will be having four units, in fact. Four different buildings and it is a huge almost going to have five lakh square feet area kind of thing. Each one main building is 2.6 lakh square feet area and other three buildings also more than lakh square feet area we are building. So, same time we are going for automation. So, proper utilization of manpower and complete machinery utilization also we want to monitor in a atomizer thing.

Yeah, so the... What CFO has talked about the R&D investment in the, we have already allocated 100 crore, you know, for the R&D. Fund is already in place, some of which investments have already taken place. The 9 to 10 percent what he talked about is in the subsequent years, you know, up to 9 to 10 percent is the investment that we are going to do in R&D. Which is currently, you know, earlier it has been 7% to 8%, then it got dipped to 6%, primarily because our revenues have started kicking, you know, on a continuous basis. But going forward, you know, the investments in R&D, you know, will further increase. So that's one thing that I want to add to what the CFO has, you know, told as a clarification as well. Yeah, we can go to the next question.

Thank you, and best wishes.

Thank you. We take the next question from the line of Dikshant from DB Wealth. Please proceed.

Hello, sir. Congratulations from the members.

Sorry to interrupt, Dikshant. I will request you to come closer to your device and then speak.

Sure. Congratulations on management. Congratulations on the top 10 growth. We are seeing a significant rise of cost in our employee expenses and our other expenses. While I understand that we are in a growth phase right now, and we are doing acquisitions, employee expense might go up, but what's the major contributor to our other expense?

So, if you see, compared to the previous quarter, sir, you know, the other expenses in terms of the finance cost and other things, you know, got significantly reduced, actually. Obviously, the depreciation, you know, going forward also will increase because, you know, there's a lot of investment in terms of capex. And continuous investment in terms of the capital work in progress, which is there in R&D, you know, every quarter on quarter basis, you know, we keep capitalizing actually, okay, and other things like, okay. So, but if you see the employee expenses, you know, we have gone in for a very, very, very large expansion, okay. Look, from the current, you know, size of the facility, we have, you know, contemplated for an expansion of, you know, five and a half to six and a half times. Now, with the addition of the, you know, new facility, which we have recently announced that, you know, we have been allotted 5.6 acres, up to 12 to 13x times, you know, the facility will increase. Proportionately, the manpower also will be increasing, actually. Salt. In the next few months, the manpower, which is required, you know, for the next financial year, that recruitments also have started on a continuous basis. Hence, the financial, because, you know, training and other things like, you know, at all levels, you know, the manpower have got increased. From a managerial level, the head of the department level, the team leader level, and at a junior level also. So, obviously, the Manpower, you know, has also got increased because the number of, you Not, um, um... Per employee, number of projects handled by per employee is increasing on a continual basis. So we are continuously increasing the manpower. So the cost of the manpower is increasing on a quarterly basis, actually.

Sir, what is the code sort of other expense that is happening? Because depreciation, I understand the sort of interest cost we are getting, that also makes sense. But what is it the other expenses that are really hitting us?

I will tell you there is a... It's related to, you know, in the, generally, normally, what happens that certain expenses in the Q3 and Q4 will increase, actually, primarily owing to, I mean, this has been a trend, primarily owing to, we have an annual function, you know, happening in. So, that is one expense that gets added. We participate in the, you know, international shows and exhibitions. That is one expense that gets added, actually. So, these are certain expenses, you know, which gets increased. But in last, you know, few quarters, you know, our travel expenses also have got significantly, you know, increased, primarily going to huge business development, you know, activity that is taking place. And in terms of the execution and integration also, you know, a lot of travel is happening across multiple laboratories across India, Pan-India places, actually. So these are the different heads under which, you know, the costs have got increased in the... We have been doing trials, a lot of trials. Yeah, trials, the cost of the trials.

So, next, I have two quick questions. One is that you have mentioned 45% to 50% CAGR growth for the next three years in your opening remarks, and that's something that has been consistent. So, what kind of margins on net that we can expect now? Because since we are now going through a new leap of growth in our business, which as investors we are proud of, what kind of net margins can we see now?

See, on a PAT level, if I talk about, we are going, we are targeting for a 15% PAT level. Yeah, consolidated, there could be a small, you know, dip in the consolidated basis. Okay, I just want to talk on a standalone basis, you know, I just want to talk about standalone basis. That, you know, standalone basis, the net profit percentage, PAT percentage will, we are targeting for 15%. So, consolidate basis, you know, primarily what happens, there is only one major consolidation which is happening, which is Ideal Explosive, actually, okay. There, you know, we are having a little dip because of the, you know, previous RC contracts of the Coal India, which Ideal was handling, actually. That may have a little small impact towards, you know, this thing, but I think overall on consolidated basis also, if you see on a year-on-year basis, there will be a significant improvement in the, you know, part-level margins which will be there. Even after, you know, the consolidation.

So, you are expecting that this year end, the next quarter we will see around 15% on consolidated basis, plus minus 1% or so.

No, no, no. On standalone basis, 15%. There will be a dip in the consolidation, you know, because of the IDL. That's what I was trying to say.

So, what would be the numbers?

But it will be better than year-on-year basis consolidation. That's what I was trying to say.

If possible, can you give us a number, sir?

Quantifying at this point of time is very difficult. We are just taking full control of the management because there are spread across seven plants. Continuous basis, we are reducing wherever there is a redundancy of the expenses or the manpower and other things, cost and other things are being done. You have to accept a fact that the acquisition and this thing is a very organic process. We cannot take actions overnight because there are traditionally employees which are older than this company. There are 41, 42 years since employees are there who are working in the company, actually. Stage by stage we are doing, but currently guidance point of view to give also, I do not have a clarity of the numbers currently. But from Q1, next financial year onwards, you know, we will be able to give a guidance on the consultant basis. But the only thing guidance that I can give at this point of time, not in an absolute number, is that even after consolidation, even after there is a small dip also, year-on-year point of view, the pad level margins are going to be on higher side. Target for the, what do you call, standalone basis, we are targeting for a 15% margin. That's what is our internal target.

Sir, lastly is on underwater mines. This is something that we have been expecting from the government and from our partners with THUs for some time now. So, what's an update on this and what's like being a deteriorating for us right now?

All necessary approvals at all levels are over, actually. It is just awaiting for a DAC approval. It has come to that level, actually. We are most positive and likely that, you know, it may, the file may come up for the DAC approval in the upcoming DAC meeting, or maybe if it gets flipped, you know, for an operational reasons, because certain files, certain number of X number of files only, they take up actually. If it slips, it may go for another DAC meeting. Some clarity is yet to come for even for us. As much as you are waiting, the same way we are also waiting. Operational wise, you know, everything is set, you know, we are ready up for production, the documentation, quality plans, everything are up and ready from our end. We are fully geared up. The moment the switch is on, you know, we can do production. That's the stage we have already geared up ourselves. We are still awaiting as much as you went. As something comes out, you know, we will give our disposal.

This would be a 2,000, 2,500 crore order that we are thinking of, right?

Yes, it is going to be 2,500 course. Plus, we are also expecting my other DCPP partner BDL also going to take equal order. From that also, we are expecting a few hundred course orders.

Do I have permission to ask one more question, sir?

Yeah, yeah.

Then I have one more question. So, sir, right now, we are also sort of seeing some increase in approval. So, the production stage that we are going to go into, at what point can we expect our cocks to, like, you know, start going down? You are going for automation and everything else. So, at what point, right now, it's around 70% of our materials consumed, right? So, at what point can we see a significant improvement here?

Yeah, see, this question we have been giving a reply to all the investors. Once again, I will give. There is significant improvement at a COGS level will happen once the large scale production orders kick up and which are going to be an anchoring orders over the overall top lines, actually. Till such a time, you know, the similar COGS levels would be maintained, actually, because predominantly most of the projects that we are addressing are, you know, typically R&D projects. And, you know, the, you know, there is no control at a cost level, actually, for that. But as, you know, large-scale protection orders which we are awaiting, okay, they are something, you know, which are going to give a significant benefit at a cost level for them.

And you must be knowing already that clearance, you know, I think around 2 lakhs crores orders, the MODAs are already given clearance. Many, many programs, naval programs, missile programs, couple of missile programs.

So, these are all production orders. What he means is that these are all production orders. Once they get into a system integrator level, we are going to get the production orders, which will definitely give a benefit.

Is there any timeline for these DAC meetings, sir, that we are aware of?

It is not in our control, sir. It depends on availability of the Raksha Mantri, various other officials who are part of the thing. It's not in our control. Not do we have any information also most of the time.

No, I get it, sir. That's confidential and on their level, but I get it. Jahan, sir, thank you so much for continuing to work on this.

Yeah, I request everyone to restrict themselves with two questions. I am available tomorrow, day after tomorrow, for the two different conferences, you know, you will have, you know, if you are attending the conference, you know, if you are in Mumbai, you can meet me in person also. But I think, you know, because we will have to give opportunity for many of them, some of them are, you know, messaging me personally also. The two questions I request, most relevant two questions.

Thank you, sir.

Thank you. We take the next question from the line of Abhi Shah from Siddhi Technology. Please proceed.

One question regarding the subsidiary IDL explosives. So, there is a standard on losses on the books of IDL explosives. So, what is the figure and when can we expect this figure to turn around positive on an EBITDA margin and also on the net income basis? So, when the subsidy could turn positive?

See, primarily, you know, if you see, there is four pros loss that got added actually in the quarter, okay, out of the 45 days that this thing is there. This quarter, I think, you know, we are expecting an EBITDA level to be, you know, breakeven, breakeven, okay. From next financial year, Q1 onwards, you know, at the EBITDA level, and at the PAT level, it was going to be a positive EBITDA company, actually.

Okay, so can we expect a margin dilution this year in FY26?

There will definitely be a margin dilution. There will definitely be a margin dilution, which we have told last quarter also, actually. Okay, we have given that indication very brightly last quarter itself. But you have to also observe that, you know, the margin levels of the standalone financials. It has significantly got increased, you know, owing to, you know, multiple types of systems, you know, also entered, which have got entered into production order in this financial year, which has given a benefit at, you know, I mean, say, EBITDA level as well as at the overall at the patch level. Okay. So, owing to that, you know, although there is, you know, certain, you know, In the consolidation basis, there is certain impact that is going to be there. But overall, as a consolidated basis, although there is an impact because of consolidation, on a comparative basis of year-on-year, there is still going to be an improvement in all difference, both at the EBITDA level as well as at the PAT level. That's how we would like everyone to look at. The rationale behind the purchase of ideal at the time of, you know, entering the SPA agreement also we have given in very much in detail, detailed, comprehensive, you know, presentation we have given that it is a strategy with which, you know, the ideal explosive is acquired. And, you know, it takes few quarters for us to, you know, implement that strategy and bring on, bring it on to, you know, a defense grade explosive, you know, pulpitize this thing. A huge capex is also being planned in ideal, which will contemplate for the future energetic requirement, both in terms of the propellant, as well as in terms of the warhead explosive, you know, for, you know, for our backward integration, and also for, you know, forward integration as a vertical integration, all three levels. So, this transition will take some time. At the same time, you know, in our investor presentation also, we have told that, you know, there will also be an improvement from the next financial year, owing that, you know, we are doing a huge business development for ideal explosive loans on a standalone basis also, where, you know, huge export-oriented, you know, market which was untapped earlier is also being explored, okay? And we have also given decent amounts of funnel is already there in place, which will further improve the, you know, margins. with the export Obviously, the business comes from the Coal India, but also other, you know, mining and infra projects also, one after other, you know, we have started getting projects. And we have played a, you know, key role by fighting in the court of law for the ban of Coal India to be lifted, actually. And that was successful, we got Coal India projects. So, the survival point of view, there is no problem. But Q1 onwards, from the next financial year, the EBITDA is going to be positive, PAT is going to be positive. This year, there could be a small, you know, impact, but there is not going to be a serious dent on the financials at EBITDA level or the pad sugar. Because the margin expansion has significantly been there in the last three quarters for Apollo on a standalone basis. So, that small, you know, impact of, you know, the consolidation may not have a significant impact on the console side.

Thanks for the detailed answer. So again, one question I want to ask regarding the order book. So can you just write me what is the order book for ideal explosives this quarter?

This quarter, the complete order book of ideal is standing at around 500 crores, actually.

500 crores, okay. And, okay, yeah, that's it.

Thank you. Before we proceed with the next question, participants, please limit your question to two per participant, as there are several participants waiting for their turn. We take the next question from the line of Akshay from E.K. Investment. Please proceed.

Hello.

Thanks for giving me the opportunity.

Sorry to interrupt, Mr. Akshay. Could you please come closer to your device and then speak?

Hello, am I audible now? Okay. Thank you, sir. And thanks for giving me the opportunity. Sir, my first question is about the EBITDA margin. So at consolidated level, not for this year because we have acquired IDL and margin stress somewhat for that reason, but for the next financial year and FY28, what would be the consolidated EBITDA margins going forward? What are our targets?

Guidance, you know, for the EBITDA or at a PAD levels, you know, at a Q3 level, you know, I am not in a position to give you, okay? Guidance, we will give you, you know, once the Q4 quarter ends, based on the outstanding order books that we have and the funnel that we have at the end of the 31st March, okay? That's point number one. But broadly, there is an internal target of maintaining on a standalone basis 15% margin at a pat level. This is what is the guidance that we give. And we continue to stand on our guidance on the top line revenues of increase of 45 to 50% growth. We'll continue to stand on that point.

Okay, sir. Answer my second question is about the promoter pledge. So, when, by when are we clearing the promoter pledge?

Okay. So, like, everything goes well, you know, like, next up.

We are working towards it in a few quarters, you know, we should be coming out. We have initially contemplated to come out in this quarter actually, but I think in next few quarters, you know, step by step, one after other, we should be coming out.

Okay, thank you.

Thank you. We take the next question from the line of Manoj Jain from Jain HUS. Please proceed.

Namaste, sir. I would like to first state that, you know, on the 5th of January, I had sent an email to you asking a certain question, but I don't know why it was unanswered. Now, the question I would like to, which I placed there, I am placing it once more clear, which is that recently in CNBC, TV18, and other, some websites, some allegations, some articles came on this, your company, in which it was alleged that something like that the shareholders had rejected a proposal for approving related party transactions in tune of 500 crores between Apple and Apple. Apollo Defense, Apollo Strategic Technologies, and Ideal Explosives, with almost 99% of the institutional shareholders voting against the resolution. So is this true? I don't know why the company did not refute it or say anything about it. So if you can kind of clarify on this matter.

I will clarify, sir. The point is like this. It is neither an allegation nor a call, sir. It is in a public domain. We have gone in for approval to shareholders stating that we would like to give a corporate guarantee to our subsidiary companies, actually. Okay, sir. The fact which every investor has to understand is that if we are taking a stake in a company, maybe a 100% acquisition or a minus stake or a majority stake, Those companies typically rely on a parent company for support in terms of the financials. Right, sir? For giving a support to the, you know, financial support to those companies, you know, some certain guarantees has to be given as a corporate, okay? We have to stand as a guarantee and give that comfort to their, either their lending partners, or we may have to give some guarantees when they want to bid for a higher, you know, tender projects or something like that, okay? Yes, yes. You know, in order to use such kind of a comfort letters or a corporate guarantee, you know, this resolution has, you know, been moved by us, you know, which shareholders, largely shareholders have accepted actually, but certain shareholders, you know, they have gone with the... What do you call, bi-act, what do you call, reports of certain reports, certain agencies who have made a report that, you know, certain RPT, related party transaction based, you know, corporate action is being initiated by Apollo. Okay. Here, the related party transaction point of view, none of the, you know, the fund is not coming, going to any of the, you know, what do you call, promoters. No such dissing is being given. Only corporate guarantee. We are standing as a guarantee. Corporate guarantee has to be given. Without which, you know, those companies' survival will become difficult, actually. Okay. Further, there is nothing to refute, nor is it an allegation. There are certain people... Thank you. Starting from 1st April, we will have to once again approach for, you know, shareholder approval. Okay, for the purpose of this one or two months, you know, there is no point in taking approval because once again we have to take this cost for the company. It is your company who is incurring loss by again, again, it is 20, 25 lakhs expenditure for me actually.

I did not want to...

We have requested our bankers to, you know, maintain certain refrain over it and wait for some time. We will further go in for shareholder approval. This time, we will make a comprehensive presentation to all the people. Whoever has written reports to them also, we will approach, you know, and we will tell them the rationale. There is no benefit that is being awarded to any of the, you know, subsidiary companies, nor any benefit awarded to any of the promoters by moving this resolution. It is purely for the purpose of supporting the subsidiary companies so that they become independently. Yes, yes, yes, yes. We understand the concerns of that reporting agencies. We are going to address it. I will come back with the resolution. I will convince them. Once again, we will get it passed. That is the thought process that we have internally. I hope this is clear and there is nothing hanky-panky happening there.

Okay. Actually, the report was made in such a way that as a shareholder, you know, I couldn't understand what was going on, you know. So, that's why I wanted clarification. And one more thing, sir. I don't know why my question was not answered.

I request, please, when you read the report, whether the report has been written... You know, appropriately by understanding what further resolution has been moved or not, also I request you to understand it, not just reading the report alone, because reports are being prepared by certain analysts, not understanding, because, you know, when you prepare a report, see, I ask like you are an investor, whenever we conclude a call also, now also I want to tell. If when you are talking to us over the call of half an hour, one hour, you will not understand anything about the company. Please visit us. Talk to the management at least once in a lifetime. Okay. Then only you will understand. After that, we can have any number of calls. So, whenever whoever is writing, analysts also, I request analysts to please visit us, understand us. We can give you one hour, one end of our time. Oh, you can ask the question, sir. What is not clarified? I will clarify again.

Yes, sir, regarding this only, I said that I had sent an email to you people, but, you know, regarding this only, and, but it was not answered, sir. That's, that's.

I regret it is unanswered, sir. Verbatimit will be answered in next 72 hours.

Okay, sir. Thank you. Thank you for this. And one more thing, one, one more question, small question I can ask that any further plans of equity dilution for your company means, can you give any kind of indication that any kind of equity dilution in the future with your planning?

As and when it is contemplated, we'll keep you informed, sir.

Okay, sir. Okay. Thank you very much, sir. Thank you.

Thank you. The next question is from the line of Ankur Shagarwal from Surge Capital. Please proceed.

Hi, sir. Just a clarification. Sir, you said out of 1,300 crores of quarter book, 500 crores is ideal. And less 800 crores are?

Yes, sir. Yes, sir.

Yes, yes. That's the number, right?

Yes, yes.

We take the next question from the line of Shriyans. Gartani from SJ Securities, please proceed.

Hi, good evening, sir. I have a question on the acquisition. So if you give some more details around, you know, which space the acquisition is in and what size of acquisition are we doing, what revenues, just some more details on what we are looking to acquire.

Acquisition is a strategic in nature, once again, okay? But we are bound by NDA. I cannot disclose, you know, on exactly what it is actually, because many of the people, you know, will make their own assumptions out of it. But good strategic acquisition, wherever we are doing acquisitions, we will be doing where we do not have a significant presence or we do not have a presence at all.

Got it. So, no, just like in which specific space, because I know that we are looking to acquire some RF company for a while now.

NDA is signed. Due diligence is in the process. After we do our internal due diligence, it will come to merchant bank stage actually, okay, where the merchant banker is involved right from the NDA stage itself actually, okay. This is what I can tell you.

Got it. Okay. Sir, second question is on the QRSAM order. It's already passed DAAC. So, when do we expect that order coming in? Because I assume that that will also be quite a significant order for us.

Yeah, QSM order, Bell already, negotiation is going on, everybody is negotiating with Bharat Electronics. I think any time, any time, this month only, I think Bell is going to sign the... I think this month we are expecting. Before March, all subsystem level orders also, they want to finalize. That is what the public sector is. BDL is going to produce the missile. Overall project, Bharat Electronics is going to handle. So BDL, we are interacting with BDL now because missile onboard systems we are doing. BDL already, they have started negotiations. I think, before March, they want to finalize it.

Got it. Okay, that's very helpful. Thank you. That's all for my...

Thank you. We take the next question from the line of Vivek, an individual investor. Please proceed.

Hi, thank you for the opportunity and congratulations on good set of numbers. My question, one is probably I did not hear clearly. This order of mood mines would be somewhere around 2500 crores.

Yeah, DAC approval is there in place, 25, I think, 2,000 point correct years.

Okay, okay. Another question, this direct...

Two variants we are doing, one approval already is there in place. One DAC approval is in place. How do you mind, already approval is there. MIGM, we are expecting any time this month.

Okay. Regarding this directed energy, depends, any progress on the order from the DAC?

It will take some more time.

Okay. Thank you so much.

Thank you. We take the next question from the line of Deesha from Sapphire Capital. Please proceed.

Hello. Am I audible, sir?

Yeah, very much.

Yeah, thank you so much for this opportunity. So, just a couple of questions. So, what has been the contribution for IDL so far in terms of the revenue?

You mean, say, in the consolidation?

Yeah, yeah.

See, there is a consolidation happened for 45 days, actually, okay, with the clock date of 16th November. So, in terms of the top line, the contribution is around 50.8 crores.

And what sort of contribution are we expecting overall for this year?

This quarter could be around 90 crores.

Okay. And so, just going ahead, I think you mentioned 45% to 50% is what we're planning on a standalone basis, that is organic growth. But with this, IDL will get the full year for consolidation next year, and a lot of other acquisitions also that are in pipeline. What sort of growth are we targeting for FI27 and for years going ahead?

The futuristic acquisitions may not add to the consolidation, even if it is done before 31st March, actually, because hardly any time will be left. That may not be very significant, actually. But typically, whatever consolidation has happened, I told, whatever guidance has happened, I told, actually. So, on a consolidation basis, you know, guidance, I told you, I will not be able to give any guidance on the consolidation. My guidance is only on a standalone basis. Guidance. And giving from the next financial year onwards, on a consolidated basis.

Okay, okay. Fair enough, sir. And for the ideal, I think you mentioned just to like...

So my guidance is CIS. Till now, whatever guidance we have given, that CIS as of 31st March, 2026, fresh guidances, you know, because, you know, now that consolidations are happening, fresh guidance on a consolidated basis will start giving from the next financial year onwards.

Okay, all right, sir. And just to clarify, you mentioned that IDL will be EBITDA break-even we are expecting by this quarter, and PAT and EBITDA positive from post QFI 27, right?

Yes, yes.

Okay, all right. That's it from my side. Thank you so much and all the best.

Thank you.

Thank you. We take the next question from the line of Santosh Singh. An individual investor, please proceed.

Good evening, sir. Hello, am I audible?

Good evening.

Sir, my question is around the date level. How are you going to fund these acquisitions which you have planned, and how the date would look like? That is my first question. Okay. That is the first question. Yeah.

As far as, you know, the ADIPL, you know, which is going to do the acquisition, okay, we are going to infuse funds into that, you know, which will meet the distinction, actually.

Okay, no, my question was basically, is it from internal accurals, or are you going to raise more funds that can give you more clarity on that?

Currently, internal accurals, sir.

Okay, okay. Second question was around this order line, I mean, order which you have, what is the execution timeline you are targeting? I mean, and what percentage of that will be, you know, executing each quarter or maybe a yearly? Can you give some idea around that? Rate of execution, basically.

Which order you are talking about, sir? Which order?

The order book, which you have, 3,500, right? So, how is that going to be, you know, executed per year, per quarter?

The current outstanding order book is around 1,300 cores, okay? On a consolidated basis, actually, okay? So, Partially of that will be, you know, concluded in this financial year, and some running orders, you know, fresh orders, you know, keep coming on a short term, this thing. But majorly, you know, the current for the next 45 days, 50 days, for the end of this financial year, you know, for that, you know, the orders, what has to be executed, everything are already in the pipeline. Rest of the orders, you know, what do you call, are the ones which will be executed in the next financial year. Where we have further funnel, you know, where we are expecting orders, you know, to contemplate for the guidance that is given on a standalone basis for the company, actually.

Okay, I got it. My last question would be basically, what percentage we are maintaining our R&D expenditure? Could you help me with that currently?

Sir, average of 6% to 8% has been traditionally our R&D spencer, actually. Okay? This year, it may cross that trend, actually. That's how I can tell you.

Okay. Got it, sir. Yeah. Thank you for answering all my questions, and wish this is for the next quarters. Yeah. Thank you so much.

Thank you so much.

Thank you. We take the next question from the line of D-Pain. From Philip Capital, please proceed.

Hi, thank you for the opportunity and congratulations on a great set of numbers. So, my first question is on the lines of your acquisition for IDL Explosives. So, sir, I wanted to understand as to where have we reached in terms of licensing and certification pertaining to the defense explosives, and what more certification and licensing are pending, how much time it could take us, and when can we start with the commercial production and maybe even foresee orders for defense explosives?

Thank you. It is too detailed in information which I am not in a position to disclose at this point of time. But broadly, I will answer your question that a detailed compendium of, you know, the different explosives related to fire, you know, defense explosives is already ready. And we are, for some of the things, you know, we have already started placing orders for the missionary. Some of the things, you know, negotiation is going on. Parallelly licensing activity is also parallelly going on. And there is a team of expert consultants who have been nominated to do this job, actually. Next financial year, we are likely to get, you know, large cap, you know, weapon system orders for which we are geared up.

Got it, sir. Sir, in one of the DPSU's commentary, they told us that there was some supply chain issue that they are facing. So, any slowdown from ordering from DPSU that you might be seeing in or any commentary on the industry side of it?

Obviously, when the context of IDL has come, you know, I told to the previous, you know, this thing also, that this is a backward integration for us. It's also a forward integration for us and a vertical integration also. We are building capacities which will not only meet our internal captive requirement going forward, but will also be serving as an outsourcing for the many. So, in the current scenario, you know, doing it in a very, very large quantity, the ecosystem is very small, and the requirements are growing exponentially in every quarter by quarter basis, every month, rather, I should position it as. And we are observing the trend as we do not have a full, although we have a clarity and idea, we have appointed, you know, very, very senior consultant panel, actually, not one member, okay. We have a panel of senior consultants with expertise in the explosives in the different types of equipment, someone who is expert in the war, someone who is expert in propellant, someone who is expert in different things, someone who is expert in ammunition. You know, consultants are, you know, working on it, you know, in terms of the current captive requirement of us and the futuristic requirement of to serve different industries, both for the public sector and there is a growing demand in the private sector. A lot of people are entering into this, even for them also, the ideal is going to be a support system, sir, going forward.

Got it, sir. That's all from my side. Wish you the best. Thank you for the opportunity. Thank you, sir. Good time.

Thank you. Ladies and gentlemen, that was the last question for the day, and I would now like to hand the conference over to the management for closing comments. Over to you, sir.

Thank you so much. We extend our sincere gratitude to the Ministry of Defence Government of India for their continued trust in the Indian defence manufacturing ecosystem. Their confidence reflected through substantial investments is a strong endorsement of our nation's industrial capabilities and innovation potential. We remain steadfast in our commitment to delivering advanced solutions that bolster operational readiness and strengthen national security. It is an honor to serve the nation by all of us from the company, and we stand fully prepared to support our armed forces under all circumstances. I extend my heartfelt thanks to all our esteemed investors and analysts for being with us today. Your continued trust and partnership mean the world to us. Your participation and feedback are invaluable to us. We remain committed to enhancing our performance and driving sustainable growth. We look forward to welcoming you to our facilities, where you will have opportunity to observe our operation and initiatives at a ground level. Should you have any further questions or wish to share your thoughts, please don't hesitate to contact our Investor Relations team. or write to us at investors.relation at apollo-micro.com. Thank you once again for your time and trust. We look forward to reconnecting with you during our Q4 update. Wishing you all a great day. Jai Hind.

Thank you.

Thank you, ICIS-18, for arranging this call.

On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.