Target: ₹1,610

CMP: ₹1,317.55

We recently engaged with the Unimech Aerospace & Manufacturing management for insights into the present business environment and outlook. The company expects over 35 per cent in its aero-tooling segment over the next few years, driven by SKU approvals and client additions. In engine tooling, the company is working to qualify LEAP engine stands for its anchor customer, which could unlock a long growth runway. It is pursuing SKU approvals for new P&W and RR engine tools. In airframe tooling, the Boeing relationship continues to scale up.

In PCA, strong nuclear orders are anticipated (EMCCR and new reactors), with the order book expected to grow ₹400–500 crore by end-FY26. The company has received RFQs for its anchor customer in semiconductor equipment and expects order conversions from Q4 FY26.

Excluding inorganic, it is targeting ₹1,000 crore revenue by FY29.

At the CMP, the stock trades at 62.2x/43.0x FY26e/27e EPS of ₹20.2/29.2. Over FY25-27, we model 43.7/45.8/33.4 per cent revenue/EBITDA/PAT CAGRs, driving RoIC to 44.5 per cent vs 32 per cent now.

We retain a Buy rating with a higher TP of ₹1,610, 55x FY27e EPS (vs 45x FY27e EPS earlier).

Key risks: Great dependence on the top-10 customers; exports, regional performance.

Published on June 27, 2025