Metrics raised 6
- FY27 EBITDA margin guidance raised to 34-35% (from 30-32% historical guided range)
- ROCE target raised to ~20-21% as utilization improves (from current ~14-16%)
- Asset turnover target raised to ~2.5x over 2-3 years (from ~2.1x current)
- Working capital days target raised to 160+ days by FY27 end (from ~130 days current)
- Gross block target raised to ~2x current by FY27 end (from current level)
- Saudi JV customer target set at two new customers by FY27 end (newly set)
Metrics cut 1
- Other income guidance reduced to ~half of Q1 level from Q2 onwards (from Q1 actual of ₹7 crores)
Unimech Aerospace and Manufacturing Ltd - Q1 FY27 Earnings Call Summary Tuesday, August 4, 2026 11:00 AM IST
Event Participants
Executives
6
Anil Kumar Puttan (Chairman and MD), Aakash Jaiswal (AGM Investor Relations), Mani Puttan (Full Time Director), Preetham S V (Full Time Director), Rajnikant Balaraman (Full Time Director), Ramakrishna Kamojhala (Full Time Director & CFO)
Analysts
6
Akshay Kaila (AK Investment), Bhavesh Bhatia (Individual Investor), Charchit Maloo (Genuity Capital), Chirag Kalantri (Nuvama Wealth Management), Dave Thakker, Harshit Chedda (Central Insight LLP), Kishore Kumar (Unifi Capital), Sajal Kapoor (Antifragile Thinking)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹198 crores | +71% YoY, +32% QoQ; driven by strong procurement activity and two months of Hobel Bellows contribution (acquired April 27, 2026) |
| Revenue Mix - Aero Tooling | 76% of revenue | Remaining 24% from precision components, assemblies (nuclear, semiconductor, aerospace) and Hobel |
| Hobel Bellows Revenue | ~₹22 crores | Two months contribution only; full three months expected in Q2 FY27 |
| Gross Margin | 65% | Supported by favorable tooling order mix; sustainable blended level guided for FY27 |
| EBITDA Margin | ~36.5% | Demonstrates business model resilience; FY27 guided at 34-35% |
| PAT | ~₹28 crores | +46% YoY, +7% QoQ; operating quality stronger as other income declined YoY |
| PAT Margin | 24% | Reflects operating leverage benefits |
| Other Income | ₹7 crores | Down ~50% QoQ as treasury surplus deployed toward Hobel acquisition; Q2 expected at ~half of Q1 |
| Depreciation | ~₹8 crores | Broadly in line with FY26 run rate |
| Finance Cost | ~₹2 crores | Working capital borrowings only |
| Employee Cost | 15% of revenue | 1,232 employees; operating leverage benefits visible |
| Subcontracting Cost | ~3% of revenue | Reflects focus on maximizing in-house capability utilization |
| Order Book (Consolidated) | ~₹280 crores | Marginally lower sequentially due to strong execution and customer pull-ins; excludes forecast-based pipeline |
| Nuclear Order Book | ~₹887 crores cumulative | Execution planned largely in H2 FY27 with remaining spillover to next year |
| Working Capital Days | ~130 days | Expected to increase to 160+ days by FY27 end due to nuclear and long-cycle aerospace programs |
| Capacity Utilization | ~58% | Additional ~10% capacity committed to qualification/NPI programs |
| ROCE (Annualized) | 14.3% | vs FY26 level of 10% |
| ROE (Annualized) | 14.6% | vs FY26 level of 16%; expected to improve as utilization rises |
| Asset Turnover | ~2.1x | Expected to reach 2.5x over 2-3 years as precision business scales |
| CapEx | Gross block ~2x current by FY27 end | Driven primarily by Saudi JV investment (~US$10 million infusion expected this month) |
Geographic & Segment Commentary
Aero Tooling: Delivered healthy performance with constructive demand visibility for Q2. Demand normalization is evident with strong customer procurement behavior. Engine tooling dominates mix with airframe tooling emerging as incremental opportunity. Growth driven by SKU expansion (6,300+ qualified SKUs) and underlying end-market demand.
Precision Component & Assembly (PCA): 18-month-old business showing encouraging traction; ~80% of qualified parts converting to serial production. Includes nuclear, semiconductor, aerospace segments and Hobel Bellows. Heavier PCA-led revenue contribution expected in H2 FY27. Most qualified SKUs moving into serial production.
Hobel Bellows: Contributed 21% of total revenue (₹22 crores, two months). Supporting power generation, locomotive and advanced industrial markets. AS9100 certification targeted by Q4 FY27 for Vizag facility to open aerospace opportunities. Growth expected at 15-20% for FY27.
Nuclear: Cumulative wins of ~₹887 crores with execution planned primarily in H2 FY27. Four new nuclear reactors coming up in India present additional opportunities; existing qualifications enable participation.
Saudi Arabia JV (Dheya - Kanoo): Unimech's first manufacturing footprint outside India; facility, equipment deployment and leadership hiring progressing as planned. Customer engagement encouraging; US$10 million capital infusion expected in current month.
Dheya Engineering Technologies: Selected among Top 100 Deep Tech companies at Bharat Innovates in France; part of PM's delegation to France. DET500 and DET200 engine programs progressing toward validation. Raising ~US$10 million through equity/debt with potential Technology Development Board funding; Unimech's exclusive manufacturing arrangement remains unchanged.
Company-Specific & Strategic Commentary
Long-Term Supply Agreement with FACC Austria: Initial value US$7.5 million over five years with scope expansion opportunities; marks entry into recurring aerospace component supplies under long-term program. Strategically significant beyond contract value as it validates Unimech's multi-year commercial capability.
Qualification Pipeline: 165 first article inspections (FAIs) completed during quarter; six additional prospective customers engaged. Targeting meaningful increase in qualification rates over prior year, expanding potential customer and program pipeline.
Free Trade Warehousing Zone (FTWZ): Fully operational; strengthening ability to mitigate tariff-related disruptions and providing customers flexibility in managing delivery schedules.
Tariff Mitigation Strategy: Engagements increasingly with European customers (FACC), Saudi manufacturing footprint, and FTWZ as structural hedges against US tariff volatility.
Capacity Investment Acceleration: Additional capacity investment being advanced earlier than originally planned to capture qualification program conversions; customers value available/dedicated capacity.
Fundraising Resolution: Board approved enabling resolution for up to ₹750 crores; primarily for minimum public shareholding compliance (due in 18 months), strategic flexibility for capacity/capability expansion, and potential inorganic opportunities. Not an immediate fundraising.
MRO Sector: Long-term intent to participate; historically supported Safran-HAL MRO in Goa with 100+ toolings. Any new MRO activity in India or globally presents tooling supply opportunities.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Q2 FY27 Revenue | Higher than Q1 FY27 | Full quarter (3 months) of Hobel contribution, continued tooling demand momentum, growing PCA pipeline |
| FY27 Revenue Growth | "Meaningful growth" vs FY26 | Driven by tooling demand normalization, Hobel consolidation, PCA qualifications maturing, nuclear execution in H2 |
| EBITDA Margin (FY27) | ~34-35% | Better than historical 30-32% guided range; close to current 36.5% quarterly performance |
| Gross Margin (FY27) | ~65% blended | Sustainable given tooling mix and qualification investments |
| Other Income (Q2 onwards) | ~half of Q1 level | Reduced treasury surplus post-Hobel acquisition; funds deployed productively |
| Working Capital Days | 160+ days by FY27 end | Nuclear and long-cycle aerospace programs require higher inventory and longer acceptance cycles |
| Growth Block | ~2x current by FY27 end | Primarily Saudi JV investment; core business CapEx not significant for FY27 |
| Asset Turnover | 2.5x over 2-3 years | Precision business expected at ~2x turns vs tooling's higher turns |
| ROCE | ~20-21% as utilization improves | Current ~14-16%; capacity utilization improvement is key driver |
| Hobel Growth | 15-20% | Historical growth rate; early integration stage, may be conservative |
| Saudi JV Customers | Two new customers by FY27 end | Locomotive and power generation; technical evaluations and commercial submissions underway |
Risks & Constraints
| Risk | Context |
|---|---|
| US Tariff Policy | Potential 100% tariffs on India remain fluid and evolving. FTWZ enables delivery schedule flexibility; European customer engagements (FACC) and Saudi footprint provide structural hedges. Management notes difficulty in quantifying impact as situation changes daily. |
| Qualification Conversion Risk | Not all qualifications will necessarily convert into production orders. 165 FAIs completed with six new prospective customers engaged at different stages; conversion rates determine future revenue visibility. |
| Working Capital Dilution | Days expected to increase from ~130 to 160+ by FY27 end due to nuclear program inventory commitments and longer production/acceptance cycles. Could pressure liquidity if order book growth accelerates. |
| Customer Concentration in Tooling | Tooling at 76% of revenue remains dominant; PCA business scaling gradually. Semiconductor and aerospace customer engagements strengthening but still maturing. |
| Dheya Ownership Dilution | US$10 million fundraising may result in modest dilution of Unimech's stake in Dheya. Exclusive manufacturing arrangement remains unchanged, protecting manufacturing upside. |
| Capacity Under-utilization | Current 58% utilization with 10% additional capacity committed to qualifications; sustained qualification investment delays revenue recognition from committed capacity. |
Q&A Highlights
Order Book and Execution Timeline (Akshay Kaila - AK Investment)
- Question: Asked about order execution timeline, pipeline conversion expectations, and nuclear order book execution.
- Answer: Confirmed order book of ₹280+ crores excludes forecast-based pipeline (FACC and other opportunities). Most tooling orders consumed within the quarter. Nuclear (~₹887 crores cumulative) executes partially in H2 FY27 with remainder next year. Precision component orders execute over next six months. New nuclear bids emerging organically. (Anil Kumar Puttan)
FY27 Growth and Margin Guidance (Akshay Kaila - AK Investment)
- Question: Requested revenue growth expectation, gross/EBITDA margin ranges, and capacity addition plans.
- Answer: Q2 will be stronger with full three months of Hobel consolidation. H2 will be much heavier PCA-led revenue contribution. Gross margin of 65% is sustainable blended level. Capacity investments will be advanced earlier than originally planned to capture demand. (Ramakrishna Kamojhala)
Tooling Business - Engine vs Airframe Mix and Growth Drivers (Kishore Kumar - Unifi Capital)
- Question: Asked about engine vs airframe tooling revenue split and whether growth depends on deepening existing programs or SKU/customer expansion.
- Answer: SKU expansion is a fundamental growth driver - journey from low-value/low-complex to high-value/high-complex products over 10 years. Aero-engine tools dominate current mix but airframe tooling is an emerging opportunity. Growth will be combination of SKU expansion and underlying demand. (Anil Kumar Puttan, Rajnikant Balaraman)
Value Chain Position and PCA Tier Structure (Kishore Kumar - Unifi Capital)
- Question: Asked about Unimech's position in the semiconductor and aerospace value chain.
- Answer: Largely Tier 1 in semiconductor directly dealing with OEMs. In aerospace, mix of Tier 1 (direct OEM engagement) and Tier 2 (working with multi-billion dollar Tier 1s) depending on program structure. Nuclear involves working with OEMs/government or EPC Tier 1s. (Rajnikant Balaraman)
Hobel Bellows Integration and Cross-Selling Status (Kishore Kumar - Unifi Capital)
- Question: Asked about progress on cross-selling to existing customers and qualification status.
- Answer: Near-term focus on expanding within existing energy gen set and locomotive customers (wallet share) plus new customers in same market (market share). Medium-term: nuclear and other partner qualifications. Long-term: aerospace and semiconductor programs requiring AS9100 and Nadcap approvals. Engagements started with nuclear and aerospace customers. (Rajnikant Balaraman)
Nuclear Outlook and Segment Margins (Chirag Kalantri - Nuvama Wealth)
- Question: Asked about nuclear order book outlook, percentage of nuclear orders in 2 years, and segment EBITDA margins.
- Answer: ~50% of current order book executes in FY27, largely H2. Four new nuclear reactors upcoming with existing qualifications providing strong positioning. Management does not disclose segment margins, but consolidated margins guided at 34-35% for FY27, better than historical 30-32%. (Ramakrishna Kamojhala)
Hobel Revenue and Margins (Charchit Maloo - Genuity Capital)
- Question: Asked for Hobel revenue in Q1 and margin profile.
- Answer: Hobel contributed ~₹22 crores for two months. Management policy does not disclose segment margins. Consolidated EBITDA margin was 36.5%. Hobel growth expected at 15-20%. Other income will decline significantly from Q2 onwards - expect ~half of Q1 level. (Ramakrishna Kamojhala, Rajnikant Balaraman)
SKU Conversion to Serial Production (Sajal Kapoor - Antifragile Thinking)
- Question: Asked about conversion rate of qualified SKUs into recurring serial production orders.
- Answer: 6,300+ SKU count is combined across businesses. Tooling is demand-driven (not serial). PCA business (18 months old) shows ~80% of qualified parts moving into serial production. (Rajnikant Balaraman)
ROCE and Asset Turn Dynamics (Sajal Kapoor - Antifragile Thinking)
- Question: Asked about impact of utilization improvement and working capital increase on incremental ROCE.
- Answer: Current asset turns slightly over 2x. CapEx investments can deliver up to 3x in tooling, ~2x in precision components. Expected asset turns of ~2.5x over 2-3 years. ROCE currently ~15-16% for calendar year, can reach 20-21% as utilization improves. (Ramakrishna Kamojhala)
FACC Agreement Scope (Dave Thakker)
- Question: Asked about potential revenue scope of FACC agreement 2-3 years down the line.
- Answer: Agreements typically cover specific RFQ waves; newer RFQs and programs continuously added. FACC qualification opens doors to work across other Tier 1s and OEMs, expanding opportunity beyond the initial US$7.5 million contract. (Rajnikant Balaraman)
LEAP Engine OEM Engagement (Harshit Chedda - Central Insight LLP)
- Question: Asked about Unimech's engagement with LEAP engine OEMs and expected benefit.
- Answer: Cannot discuss specific OEMs due to confidentiality. Unimech works with licensees (Tier 1s) on tooling side. Signed agreements and forecasted orders for Indian stands are ongoing. MRO expansion is long-term intent; supported Safran-HAL MRO in Goa with 100+ toolings. (Rajnikant Balaraman, Ramakrishna Kamojhala)
US Tariff Impact and Mitigation (Bhavesh Bhatia - Individual Investor)
- Question: Asked for analysis of 100% US tariff impact on revenue, order flows, and EBITDA margins.
- Answer: Quantification difficult given fluid situation. FTWZ enabled as mitigant allowing customers to continue delivery schedules. Newer engagements with European customers (FACC) and Saudi manufacturing footprint are structural hedges. (Ramakrishna Kamojhala, Rajnikant Balaraman)
QIP Fundraising Plans (Bhavesh Bhatia - Individual Investor)
- Question: Asked about utilization of funds from approved ₹750 crores fundraising.
- Answer: Primary objective is flexibility for minimum public shareholding (due in 18 months). Also enables preparation for capacity expansion and capability development ahead of demand cycle. This is an enabling resolution, not immediate funding. Both organic and inorganic growth options remain open. (Ramakrishna Kamojhala)
Key Takeaway
Unimech delivered a strong Q1 FY27 with revenue of ₹198 crores (+71% YoY, +32% QoQ), EBITDA margins of 36.5%, and PAT of ₹28 crores (+46% YoY), marking the first consolidated quarter following the Hobel Bellows acquisition (two months contribution of ₹22 crores). Aero tooling remained dominant at 76% of revenue while PCA, nuclear and Hobel contributed the balance. Strategic milestones include the FACC Austria long-term supply agreement (US$7.5 million initial value over five years) marking entry into recurring aerospace component supplies, cumulative nuclear order wins of ~₹887 crores with H2 execution, and Saudi JV progressing with US$10 million infusion expected this month. Management guided for stronger Q2 with full Hobel consolidation, EBITDA margins of 34-35% for FY27, gross margins of 65%, and working capital days expected to rise toward 160+. The company targets meaningful qualification rate increases with 165 FAIs completed and six new customer engagements initiated. Key watch points include US tariff developments (mitigated by FTWZ, European customer mix, and Saudi footprint), precision component qualification conversion rates (80% currently converting to serial production), and the planned increase in gross block (~2x by FY27 end, primarily Saudi JV driven) with ROCE expected to improve toward 20%+ as capacity utilization rises from current 58%. Management views this cycle as requiring early capacity investment to capture structural demand tailwinds across aerospace, defense, semiconductor, and nuclear sectors.