Unimech Aero. Q1 FY27 Results (NSE: UNIMECH)
Signal: Margin pressure
The read
Revenue surged 71% YoY to ₹107.6 Cr, driven by the Hobel Bellows acquisition, marking a step-change in scale. However, EBITDA margin compressed to 43.3% from 49.6% a year ago, as gross margin fell on higher raw material costs and acquisition mix shift. PAT grew 46% but quality is flagged: other income contributed 20% of PBT. The company approved a ₹750 Cr QIP to fund growth, which could dilute equity. The standalone entity is now negligible; the group's earnings are concentrated in the acquired subsidiaries.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹107.62 Cr | 70.9% | 31.6% |
| EBIT | ₹38.63 Cr | 52.4% | |
| Net profit | ₹27.86 Cr | 45.7% | |
| EPS | ₹5.48 | 45.7% | |
| EBIT margin | 43.3% |
P&L walk
Revenue step-change driven by Hobel Bellows acquisition, but gross margin compression of 510bps YoY (raw material % up) dragged EBITDA margin; employee cost leverage and normalised finance cost partly offset; PAT growth in line with operating profit.
Key positives
- Revenue jumped 70.9% YoY to ₹107.6 Cr, the highest quarterly print, driven by Hobel Bellows acquisition and organic growth.
- Employee cost leverage: employee cost grew only 28.2% vs revenue +70.9%, improving efficiency ratio.
- Finance cost normalised to ₹1.94 Cr from ₹11.25 Cr in Q4FY26, easing debt burden.
- EPS grew 45.7% to ₹5.48, inline with PAT growth with no equity dilution.
Key concerns
- Gross margin compressed 510bps YoY to 67.9% as raw material cost rose to 32.3% of revenue from 27.0%; acquisition mix shift likely a factor.
- EBITDA margin fell 630bps YoY to 43.3%, the lowest in recent quarters (excluding Q3FY26 trough).
- Other income declined 35.9% YoY to ₹7.33 Cr, reducing contribution to PBT.
- Quality of earnings flagged: other income formed 20% of PBT; standalone other income was 326% of PBT.
Earnings quality: includes non-operating other income
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