Defence Stock Surges 5% After Term Loan Deal With SBI: Do You Own?

On Monday, Shares of defence company Apollo Micro Systems (AMSL) surged 5 per cent to hit the upper circuit. The share opened flat at Rs 96.95 and went on to hit the upper circuit at Rs 100.05.

The company has informed through an exchange filing that it has entered into a Term Loan Agreement with the State Bank of India (SBI), the country's largest public sector bank.

The company said in the exchange filing, "To avail term loan of Rs 110 crore for implementation of the upcoming project, Integrated Plant for Ingenious Defence Systems (IPiDS) at Hardware Park, Hyderabad and renewal cum enhancement of Working Capital (WC) credit facilities from State Bank of India".

Earlier in February, the lender had sanctioned a loan of Rs 110 crore for the company's new project in Hyderabad. The is coming up with a facility with an investment of Rs 210 crore. It will manufacture of defence products at the upcoming facility.

In Q3FY24, AMSL reported around a 35 per cent rise in its net profit at Rs 10 crore in the December quarter of the current fiscal. The total income rose to Rs 91.84 crore from Rs 82.69 crore year on year. Its expenses were at Rs 77.46 crore during the quarter as against Rs 71.73 crore in the third quarter of last fiscal.

Incorporated in 1985, Apollo Micro Systems expanded into the design and development of systems and subsystems for electronic hardware and software for DRDO, DPSUs, and others. The Hyderabad-based company offers complete platform-level solutions, from the development stage to manufacturing, such as underwater mines, railways, automotive, and homeland security markets.