Defense stock zooms 30% in 5 days. What's driving the rally?
US Treasury yields which hit a 16-year high. This has ignited a wave of risk aversion among investors. However, certain stocks have defied the odds and garnered bullish interest during Wednesday's trading session.
Apollo Micro Systems shares are one of them. After three consecutive days of declines, Apollo Micro Systems' shares staged a remarkable 8% rally on Tuesday. The stock continued the upward momentum, surging to hit the upper circuit on Wednesday.
This article will delve into the factors contributing to this impressive performance. On 3 October 2023, the company announced an ambitious capital expenditure plan of ₹1.5 billion (bn) to establish a defence equipment manufacturing facility at Hardware Park in Hyderabad. The company intends to conduct a Bhumi Pooja ceremony for the plant during the upcoming Dusshera festival and aims to complete the project within nine months.
The proposed new units will expand the existing infrastructure by an impressive 300,000 square feet and will serve as a home for a defence electronics and electro-mechanical manufacturing facility, capable of handling bulk production. These new units will include a dedicated clean room for the production of Inertial Systems, RF Systems, and equipment for Space Applications. It will also be equipped with comprehensive Environmental Test Facilities, including an EMI-EMC facility accredited with NABL Laboratories.
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