India’s leading brokerage and equities research firm, Anand Rathi Share and Stock Brokers (ARSSBL) has initiated coverage on Unimech Aerospace with a “BUY” rating. ARSSBL is projecting a target price of INR 1,315 per share, an upside of 30% from the current price. The brokerage is bullish on Unimech’s precision engineering capabilities, growth trajectory and expansion plans.
Unimech Aerospace – Overview
Unimech Aerospace was founded in 2016. The company is a high-mix, low-volume manufacturer of aerospace tooling, electromechanical sub-assemblies, ground support equipment (GSE) and precision components. Unimech has cleared the approval process of global airframe and aero-engine OEMs — a feat achieved by very few Indian companies — and supplies critical components across seven countries.
Unimech’s current 1,80,000 sq. ft. manufacturing capacity across 2 facilities in Bengaluru (Peenya and Devanahalli SEZ) will almost double to 3,30,000 sq. ft. by March 2026. This expansion will lead to a peak revenue of INR 1,000 crore.
Financials At A Glance
The company’s financials are spectacular. Revenues have grown at 139.7% CAGR between FY22 and FY24 to INR 210 crore in FY24. Anand Rathi expects revenue, EBITDA and PAT to grow at 34%, 35% and 37% respectively between FY24 and FY27. EBITDA margins are expected to expand to 39% by FY27 as the company benefits from operating leverage and optimized utilization of its newly added capacity.
Net profit is expected to rise from INR 58.1 crore in FY24 to INR 149 crore by FY27. EPS is expected to grow from INR 13.2 in FY24 to INR 29.2 by FY27. What a growth story driven by increasing orders and sector diversification.
Unimech Aerospace Post-IPO Performance
Unimech Aerospace launched its IPO on 23 December 2024, the INR 500 crore issue got an overwhelming response from the investors, leading the subscription to 174.7X. The listing performance is as stellar as subscription figures, Unimech Aerospace IPO was listed with 75.32% gains.
Notably, the issue reached its all-time high of INR 1,457.15 per share on 2 January 2025, reflecting a multibagger return of 85.62% from its allotment price of INR 785 per share. However, there is a correction of ~33% from its highest peak. Currently, it is trading at around INR 971 per share.
Sector Diversification
While aerospace is Unimech’s core, the company is sector-diversifying into nuclear and micro-gas turbine (MGT) space. Unimech has partnered with Dheya Engineering Technologies and acquired a 30% stake for INR 10.5 crore. This partnership will enable Unimech to manufacture micro-gas turbines for defence and energy applications over the next 10 years.
Unimech has also entered the nuclear space and got approval from the Nuclear Power Corporation of India Limited (NPCIL) for the development of critical reactor components. With India’s nuclear capacity to triple by 2032, Unimech is all set to ride this growth wave.
Tapping Into Global Trends
Aerospace maintenance, repair and overhaul (MRO) is shifting towards Asia. Global OEMs like CFM International, Pratt & Whitney, Rolls-Royce and General Electric are launching new engine programs and Unimech will benefit big time from new engine tooling and subsequent MRO tooling requirements.
Unimech’s cost advantage — products 15-20% cheaper than American and European suppliers — makes them the preferred partner for global OEM licensees. MRO facilities coming up in India by Airbus, HAL and Dassault Aviation will further boost long-term growth for Unimech.
The company has a five-member management team with deep aerospace and precision engineering expertise. They have shown the ability to scale, maintain quality and drive growth initiatives through organic and inorganic expansion.
Risks to Consider
Despite the positives, ARSSBL has highlighted some key risks:
- High dependence on top customers, top four customers contribute 87% of revenue.
- High export dependence (95.3% of 9M FY25).
- Segmental concentration in aerospace, though they are diversifying into nuclear and microgas turbines.
- Regional performance in the US and Europe will be critical.
Conclusion
With global aerospace trends, India’s nuclear expansion and growth in complex precision manufacturing Unimech Aerospace is well-placed for sustained high growth. ARSSBL’s target of INR 1,315 per share shows confidence in the company’s execution and growth plan.
For investors looking to play India’s growing aerospace and defence manufacturing story Unimech Aerospace & Manufacturing is a good opportunity with a lot of upside.
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