Unimech Aerospace and Manufacturing Ltd

Financial Performance

• Q1 FY27 revenue approximately INR108 crores; 32% sequential growth over Q4 FY26; 71% YoY.
• Hobel Bellows revenue contributed in two months; total ~INR22 crores.
• Aero tooling ~76% of revenue; Hobel Bellows ~21%.
• Gross margin 65%; EBITDA margin approximately 36.5%.
• PAT around INR28 crores; PAT margin 24%; 46% YoY growth; 7% QoQ.
• Other income ~INR7 crores; lower than prior quarter due to treasury funds deployed to Hobel Bellows.

Order Book and Pipeline

• Consolidated order book including Hobel ~INR280 crores as of 30 June 2026.
• Nuclear orders INR87 crores; execution planned during the second half of the financial year.
• FACC Austria long-term supply agreement is USD7.5 million over five years.
• Hobel Bellows integration progressing; cross-selling to other industries; two new locomotive and power-gen customers onboarding by year-end subject to qualification.

Capex and Projects

• No significant core capex planned in FY27; capacity expansion tied to qualification programs.
• Saudi Arabia JV with Kanoo Group: capex to proceed; gross block by FY27 ~ double; US$10 million infusion into JV this month.
• AS9100 certification for Vizag facility targeted by Q4 FY27.
• Free trade warehousing zone fully operational.

Operational Metrics

• Utilization ~58%; ~10% of capacity committed to qualification and new product introductions.
• Working capital days ~130; could rise toward ~160 days by year-end.
• Finance cost ~INR2 crores; depreciation ~INR8 crores; headcount ~1,232.

Guidance and Outlook

• FY27 outlook: expect meaningful consolidated growth; next quarter stronger with higher revenue and robust EBITDA margins.
• Consolidated gross margin around 65% sustainable; blended EBITDA margin target of 30-32% plus; near-term 34-35% possible.
• Nuclear and tooling demand pipeline remains strong; more opportunities visible in nuclear tenders.

Fundraising and Strategic Initiatives

• Board-approved fundraising up to INR750 crores via QIP to meet minimum public shareholding and capture demand tailwinds.
• Inorganic growth potential; M&A considered to build capacity as needed.
• Dheya Engineering Technologies: Unimech to participate in USD10 million equity raise; exclusive manufacturing arrangement unchanged; possible modest dilution.
• Saudi Kanoo JV expands international manufacturing footprint; localization opportunities in Saudi Arabia.

Q&A Highlights

• Nuclear order execution timeline: INR87 crores to be executed in H2 FY27; remaining opportunities later.
• Hobel contribution: ~INR22 crores revenue in two months; consolidated EBITDA margin 36.5%.
• Gross margin guidance: around 65% sustainable; FY27 margins around 34-35%.
• Asset turns and ROCE: current asset turn ~2x; potential 2.5x–3x; ROCE ~20–21% with higher utilization.
• Leap engine talks confidential; MRO expansion contemplated when opportunities arise.
• Tooling vs PCA mix: tooling dominates aero engine components; PCA growing with direct OEM engagements.

Dematerialisation status

• Details of securities dematerialised/rematerialised during the quarter have been furnished to all stock exchanges.

Agreement details

• Unimech signed a long-term supply agreement with FACC Operations GmbH, Austria, a leading aerospace Tier-1 supplier.
• The agreement covers manufacture and supply of precision-engineered aerospace components and flying parts.
• It followed a competitive global sourcing process involving international suppliers.
• Onboarding includes qualification and industrialisation, including first article approvals and process validations.
• Production readiness activities precede serial production.
• Supports expansion of Unimech’s precision components business into long-term aerospace programs.
• Strengthens Unimech’s position in the global aerospace supply chain.
• Date and place: Bengaluru, India, 30 June 2026.
• Counterparty: FACC Operations GmbH, Austria.

Q4 FY26 and FY26 results

• Q4 FY26 revenue was Rs. 82 crore net of tariff concessions.
• FY26 revenue crossed Rs. 240 crore net, or Rs. 257 crore gross.
• Q4 FY26 EBITDA margin improved to about 43%.
• FY26 EBITDA margin was about 31%, broadly in line with guidance.
• Q4 FY26 PAT was about Rs. 26 crore; FY26 PAT was about Rs. 63 crore.
• FY26 gross margin was about 70%; Q4 gross margin was about 73%.
• Other income rose about 90% year-on-year to around Rs. 47 crore.
• Finance cost was Rs. 15.3 crore, including Rs. 9.6 crore forex losses.

Drivers and outlook

• Q4 recovery was driven by normalized aerospace tooling demand and deferred order releases.
• Aerospace tooling and engine/airframe complex tooling contributed about 90% of quarterly revenue.
• Order book stood at about Rs. 314 crore consolidated in May 2026, including Hobel.
• Management expects FY27 to deliver stronger growth and better operating leverage.
• Q1 FY27 revenue is targeted to exceed Q4 FY26 revenue.
• Management expects about 5% tariff sharing on parts and tooling sold into the U.S. market.
• FY27 other income should be much lower after M&A-related fund deployment.
• Current plant utilization is about 50%; working capital days were about 120-125.

Strategy and capex

• Hobel Bellows was acquired in April 2026 and is described as EPS accretive.
• Hobel adds metallic bellows, flexible tubing, and precision assemblies capabilities.
• Saudi JV Kanoo Unimech received investment approval from Saudi authorities.
• The Saudi JV expects breakeven over a three-year horizon.
• Total Saudi JV investment is planned at about $30 million; Unimech will hold 51%.
• No major core business capex is planned for FY27.
• Saudi JV capex and infrastructure buildout will be spread over the first three years.
• FTWZ approvals are complete; final SEZ and ICEGATE clearances are pending.

Q&A Highlights

• Analysts asked about Hobel aerospace qualification timelines; management said AS9100 may take six to nine months.
• Analysts asked about Hobel aerospace cross-sell; management said aerospace qualification cycles may take two to three years or more.
• Analysts asked about goodwill and ROCE impact from the acquisition; management said goodwill will arise but not be amortized.
• Analysts asked about nuclear order mix and timing; management said current orders are mainly EMCCR projects for Tarapur and Madras.
• Analysts asked about order book flatness excluding Hobel; management said nuclear and precision components are broadening the book.
• Analysts asked about aero tooling weakness; management said there is no structural loss and PO inflows should continue.
• Analysts asked about FY27 margins; management said margins should improve, but Kanoo may dilute the profile.
• Analysts asked about domestic revenue contribution; management said aerospace will remain largely export-led, with defense offering domestic upside.

Business

• Precision engineering company serving aerospace, defence, energy, semiconductor, and nuclear sectors.
• Operates aero tooling, precision parts, and assemblies businesses across India and overseas.

Operations

• Expanded internationally through Saudi JV with Kanoo Group and acquired Hobel Bellows.
• Order book reached Rs 3,137 million in May 2026, including Rs 866 million nuclear orders.
• Received Rs 3,831 million orders in FY26, the highest ever inflows.
• Serves 35 customers across seven countries, with 89% export revenue.

Financials

• FY26 revenue was Rs 2,404.9 million, down 1% year on year.
• FY26 EBITDA fell 18% to Rs 751.2 million; margin declined to 31.2%.
• FY26 PAT declined 24% to Rs 632.8 million; PAT margin was 22.0%.
• Q4 FY26 revenue rose 20% year on year to Rs 818.0 million.
• Q4 FY26 EBITDA increased 28% to Rs 352.4 million; PAT rose 37% to Rs 261.0 million.

Balance Sheet

• Total assets rose to Rs 9,235.5 million in March 2026 from Rs 8,097.7 million.
• Cash and cash equivalents were Rs 371.5 million; bank balances were Rs 862.4 million.
• Current borrowings increased to Rs 846.1 million from Rs 374.4 million.
• Equity increased to Rs 7,373.9 million, supported by higher retained earnings.

Strategy

• Management is focusing on capacity expansion, product development, market development, and capability development.
• Targets higher wallet share, more approvals, and broader customer diversification.
• Saudi JV targets upstream and downstream oil and gas, utilities, and mining.
• JV project investment is USD 30 million, with break-even expected in year three.

Risks

• Management cited volatile global conditions, muted ordering, and geopolitical and trade uncertainty.
• Mitigation includes diversification across sectors, capacity investment, and strategic partnerships.

Governance

• Ramakrishna Kamojhala signed the filing as Whole Time Director and CFO.
• The company disclosed a board with multiple independent directors and experienced industry professionals.

Q4 and FY26 results

• Q4 revenue from operations rose 20% year-on-year to Rs. 81.8 crore.
• Q4 EBITDA increased 28% year-on-year to Rs. 35.2 crore.
• Q4 PAT declined 10% year-on-year to Rs. 26.1 crore.
• FY26 revenue from operations was Rs. 240.5 crore, down 1% year-on-year.
• FY26 EBITDA fell 18% to Rs. 75.1 crore.
• FY26 PAT declined 24% to Rs. 63.3 crore.

Business developments

• Sequential Q4 recovery reflected normalized customer ordering and order book execution.
• Company expanded internationally through a joint venture with Yusuf Bin Ahmed Kanoo Group.
• It acquired Hobel Bellows to strengthen product and engineering capabilities.
• It secured meaningful nuclear-related orders during the year.

Order book and outlook

• Order book was approximately Rs. 314 crore as of May 26, 2026.
• Management expects long-term growth across aerospace, energy, semiconductor, defense, and advanced industrial sectors.
• Management said strategic investments are maturing and support sustainable long-term growth.

Operations

• Company continued investing in manufacturing capabilities, infrastructure, and talent.
• It operates from a 270,000 sq. ft. Bengaluru manufacturing base across three units.