Unimech Aero. Q2 FY27 Earnings Call — Analysis (NSE: UNIMECH)

Unimech delivered 98% YoY revenue growth in Q2FY27 at a 40% EBITDA margin, underpinned by an order book surge of over 700% YoY to ₹855 Cr following marquee aerospace and semiconductor LTAs.

31 Oct 2026 · Analysis by Alpha Inflection

Result quality: stable — Steady quarter. Management sentiment: optimistic.

The take

Q2FY27 Revenue from Operations ₹123 Cr ( +98% YoY ) . Guidance raised — H2FY27 h2fy27 total revenue vs h1fy27 > ₹231 Cr, EBITDA ~38% . New story: Hobel Bellows integration and cross-selling .

Results

Revenue reached ₹123 Cr (+98% YoY, +14% QoQ) with EBITDA margin at 40% and PAT at ₹32 Cr (+103% YoY).

Financial highlights

Guidance

Management expects H2FY27 revenue to be higher than H1 (₹231 Cr) with sustainable ~38-40% EBITDA margins and working capital extending to 150-160 days.

What management committed to

• H2FY27 revenue will be higher than H1FY27 [INR231 Cr] with similar EBITDA margins [~38%]. — > INR231 Cr, EBITDA ~38%, H2FY27
• Over 590 parts will be qualified across the customer ecosystem by FY27 close. — 590+, Q4FY27
• Automated special process cell commissioning completed by Dec '26, Nadcap certification by Mar '27. — Q4FY27
• Critical design review for [Dheya 40kg thrust engine] completed before Dec '26, final design approval certification by Feb '27. — Q4FY27
• Secured a flagship program award valued at approximately USD43 million spread over 10 years for components for doors across Boeing, Airbus, Embraer platforms. — ~USD43 million, 10 years
• Locked in a 10-year long-term supply agreement, extendable by 2 years, for recurring supply of engine components and control systems to Honeywell Aerospace. — 10-12 years

Key themes

Transition from short-cycle tooling to multi-year LTAs

How the narrative shifted

• Hobel Bellows integration and cross-selling: Prior cautious optimism replaced by explicit customer pull and evaluation of new capacity investments.
• Precision components scaling to recurring revenue: Massive acceleration from general LTA discussion to specific named customers and program values.
• Saudi Arabia geographic diversification: Shift from constructive 'on track' framing to specific milestone dates and phased capital deployment.
• Tariff risk and global trade fluidity: The threat is no longer emphasized as a material overhang; the theme is retired from the active story.
• Margin expansion and capital-efficiency improvements: The narrative shifted from pure 'expansion' to 'sustainable strong margins with known mix-driven headwind at scale'.
• Nuclear energy emerging as growth vertical: Nuclear execution in H2 anchored by existing order book; team actively bidding for 4 new reactor programs and qualifying 13-15 sub-assemblies to compete for larger package values.
• Strategic flexibility via QIP and M&A readiness: Shifted from an 'enabling resolution on the shelf' to a 'near-term active fundraise for step-change scaling'.
• Semiconductor capital-equipment vertical acceleration: Newly elevated from a subset of PCA to a distinct growth vertical with dedicated operational update.
• Indigenous propulsion platform via Dheya Engineering: Newly prominent strategic angle moving from background strategic stake to detailed operational and certification milestones.

Operational commentary

• Secured and moving into execution on marquee LTAs including a $7.5M 5-year agreement with FACC, a $43M 10-year award with a French Tier-1 door manufacturer, and a 10-year LTA with Honeywell Aerospace for engine components and control systems.
• In Precision Components & Assemblies (PCA), qualified over 250 parts with 340+ in throughput pipeline, aiming to exceed 590 total qualified parts by close of FY27 across aerospace, defense, and semiconductor segments.
• Semiconductor capex tooling and machining scale-up: 60 FAIs qualified with 20 additional parts/assemblies targeted by end of CY2026; preliminary tooling discussions ongoing with a Dutch semiconductor OEM.
• Automated special process cells installation underway at existing facility; commissioning targeted by December 2026 and Nadcap certification by March 2027.
• Middle East expansion via Saudi Arabia JV with Kanoo Group progressing following $4M equity investment; targeting commercial manufacturing readiness by March/April 2027.
• Dheya Engineering (27% stake) raised funding at ~₹200 Cr valuation; targeting full portfolio of 4 micro gas turbine variants (20kg to 100kg thrust) by March 2027 and CEMILAC final design approval by February 2027.

Analyst Q&A

• Q. What is the breakdown of the ₹589 Cr in LTAs and award letters within the order book and when does execution begin?

  Comprises $7.5M 5-year LTA with FACC, $43M 10-year award with French Tier-1, and 10-year agreement with Honeywell Aerospace. Execution and serial production ramp will begin layering into revenues from FY28 onwards post FAI qualifications.

• Q. Will margins compress as the business shifts from aerospace tooling to precision components towards the ₹1,000 Cr revenue goal?

  Aero tooling currently dominates mix and yields higher margins. As PCA reaches ~50% mix, slight compression of 1-2% could occur alongside ongoing R&D/qualification costs, but no large structural compression is anticipated.

• Q. Why is management evaluating an equity fundraise in early CY2027 if current capacity is sufficient for the ₹1,000 Cr vision?

  Internal accruals are sufficient for the ₹1,000 Cr milestone, but long lead times (18-24 months) for machine commissioning and customer qualification necessitate investing well in advance for growth beyond ₹1,000 Cr, as OEMs require visible spare capacity before issuing large RFQs.

• Q. How does the UK/EU Free Trade Agreement affect customer sourcing to India?

  Management deferred detailed analysis to offline follow-up, noting that customers currently absorb duties directly and tariffs have not been a significant operational hurdle.

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