4240% returns in 5 years! Small-cap stock hits 5% upper circuit after receipt of defence order from UAE company

Small-cap stock priced below ₹25 — Aerpace Industries — was locked in the 5% upper circuit on Wednesday, August 20, following an order win from the United Arab Emirates (UAE).

The multibagger stock earlier today announced the receipt of a Letter of Intent (LoI) from a prominent defence company in the UAE, driving investor interest in the counter.

"On 19th August 2025, Aerpace General Trading LLC, UAE – a subsidiary of Aerpace Industries Limited – received a Letter of Intent from a prominent defence company in the United Arab Emirates," Aerpace Industries said in a filing with the exchanges today.

The small-cap company said in its communication to the bourses that the UAE defence company has evaluated its advanced defence drone portfolio and expressed strong interest. "Their authorities will be visiting India shortly to witness live demonstrations of the drones developed under our aerShield programme," it added.

Subject to satisfactory demonstrations and validation of technical capabilities, the UAE entity has indicated its intent to proceed with the procurement of Aerpace defence drones for its defence requirements, the company further said.

However, due to the confidentiality and non-disclosure agreements (NDAs) in place, it has not yet disclosed the name of the UAE-based defence firm.

The company also attempted to quell shareholder concerns that much of the company’s progress is not visible and may appear limited to plans “on paper.”

"We would like to reassure our shareholders that technology development is actively underway across all verticals — solar energy (AerVolt), defence drones (aerShield), urban air mobility (aerWing, aerTaxi, aerCar), and advanced infrastructure. These are deep-technology, multi-stage projects, and by nature, they require significant time in R&D, prototyping, and compliance before large-scale commercial rollouts," Aerpace Industries said.

Your patience and trust are invaluable as we transition from development to demonstrations, and ultimately to revenue-generating operations, it added.

Despite promising order updates, the company's financial performance remains lacklustre. The loss during Q1 FY26 widened to ₹1.76 crore from ₹0.94 crore in the same period last year. However, the figure was lower than ₹3.3 crore loss posted in the March quarter.

The total income from operations improved to ₹13.91 lakhs during the April-June period, compared with ₹10.93 lakhs a year-ago. However, it must be noted that the total income is comprised entirely of other income and no revenue from operations.

The small-cap stock opened at ₹20.71, slightly higher than its last close of ₹20.67. However, it soon climbed to the day's high of ₹21.70, also its 5% upper price band.

Aerpace Industries share price performance has remained weak in the short term, with the scrip losing 46% in a year and 55% year-to-date (YTD).

However, over the last two years, Aerpace Industries has emerged as a multibagger stock, delivering 604% gains. On a longer time frame of five years, the stock performance is even more impressive with a massive 4238% return.

Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.

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