Anand Rathi Maintains Buy Call on Unimech Aerospace with Price Target of Rs 1435

Unimech Aerospace Sees Robust Growth Ahead

Unimech Aerospace, a leading player in the aerospace industry, has reported a significant beat in its Q4FY26 earnings, driven by a record quarterly revenue and a substantial 606bps expansion in gross margin. According to a recent research report by Anand Rathi, the company's EBITDA exceeded expectations by 44.9%.

The report highlights several key factors that are expected to drive Unimech's growth in the medium term. The conclusion of a trade deal and the approaching operationalisation of a Free Trade and Warehousing Zone (FTWZ) are expected to improve the outlook for the company's tooling business. Additionally, the acceleration of SKU addition is expected to drive parabolic growth in the Precision Components and Assemblies (PCA) segment.

Unimech has also marked its entry into the Oil and Gas (O&G) segment through its Kanoo Joint Venture (JV). Furthermore, the acquisition of Hobel is expected to accelerate the company's transition from precision-machined components to integrated assemblies and sub-systems across diversified end-markets.

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The research report forecasts a robust 75% revenue Compound Annual Growth Rate (CAGR) over FY26-28, led by the scale-up of aero-tooling, consolidation of Hobel, and increasing contribution from nuclear, semiconductor, and defence PCAs. The report also estimates a 52% PAT CAGR and a 959bps Return on Capital Employed (RoCE) expansion to 15.3% by FY28, supported by improving utilization and a richer product mix.

Outlook

Unimech's strong margins, superior asset turns, and leaner working capital are expected to sustain premium valuations compared to its aerospace peers. Based on these factors, the research report maintains a BUY recommendation with a target price of Rs1,435, based on 50x FY28E EPS.