Apollo Micro Powers Ahead with 42% August Jump: Is the Peak Near?
Apollo Micro (NSE: APOLLOMICRO) has delivered a stunning 42% rally in August 2025, driven by strong quarterly results, robust order inflows in the defence electronics segment, and renewed optimism around India’s focus on indigenization of critical technologies. This meteoric leap raises an essential question for investors: should you secure profits now or ride the momentum further?
What Fueled the Rally?
Quarterly Outperformance
In its Q1 FY26 earnings, Apollo Micro reported a 28% year-on-year boost in revenue, alongside a 15% expansion in EBITDA margins. These results comfortably beat street estimates, underscoring management’s efficiency in cost controls and higher-margin product mix.
Robust Order Book
The company’s defence electronics division announced multiple supply contracts with DRDO and private-sector OEMs, contributing to an order book that has swelled by nearly 35% since June 2025. This backlog offers strong revenue visibility for the next 12–18 months.
Policy Tailwinds
India’s “Make in India” and strategic initiative to onshore critical defence manufacturing have shone a spotlight on Apollo Micro’s niche capabilities. Recent government incentives for electronics R&D and production have further sweetened the outlook.
Technical Snapshot
Support and Resistance: After breaching ₹1,150 resistance, Apollo Micro consolidated around ₹1,250 before breaking out to new highs. Near-term support sits at the breakout zone of ₹1,200–1,220.
Momentum Indicators: The 14-day RSI is currently in overbought territory around 78, signaling the possibility of a short-term pullback or consolidation.
Risk Factors to Consider
Valuation Premium: At its current price-to-earnings (P/E) multiple of 42× forward earnings, the stock is trading materially above its five-year average of 28×. An abrupt market rotation or profit-booking could trigger a correction.
Execution Risks: Delivery timelines on large defence contracts can slip, impacting cash flow. Close monitoring of order execution and balance-sheet health is crucial.
Macro Sensitivities: A sudden change in government budget allocations for defence or an adverse forex movement could weigh on margins.
Profit-Booking Strategies
Tiered Exit
Book 25–30% of your position near the current high to secure gains, while letting the remainder run with a trailing stop at 8–10% below the peak price.
Option Hedges
Buy at-the-money or slightly out-of-the-money put options to protect unrealized gains, capping downside risk while retaining upside potential.
Rebalance Portfolio
Use profits to rebalance into undervalued sectors or stocks with stronger risk-reward profiles, thereby locking in gains without fully exiting the market.
Conclusion
Apollo Micro’s explosive August performance reflects both its operational strength and the favourable policy environment for defence electronics. However, stretched valuations and technical overbought signals warrant caution. A measured profit-booking approach—such as a partial exit with hedges—can help investors safeguard returns while maintaining exposure to further upside.
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