New Delhi, Aug. 25 -- While large-cap defence stocks have struggled to gain traction in August, a few select small-cap names have delivered strong returns of up to 40%, partially offsetting the sector's overall weakness amid concerns over stretched valuations.

Among the top performers was Apollo Micro Systems, which surged from Rs.173 to Rs.243, posting a massive gain of 40%, its second biggest monthly gain in 2025, following a 60% jump in May. Demand for the stock picked up after the company reported stellar figures for the June quarter, with consolidated net profit soaring to Rs.18.51 crore, up 115% from Rs.8.43 crore in the same quarter last year, driven by improved operational efficiency.

The company has consistently reported steady...