Unimech Aerospace and Manufacturing Ltd Q1 FY27 Earnings Analysis

- FY27 is expected to deliver meaningful growth over FY26 with continued normalization and recovery in aerospace tooling demand. - Q1 FY27 revenue is targeted to surpass Q4 FY26 revenue. - Growth driven by ramp-up in precision component opportunities across semiconductor and aerospace, plus execution of nuclear-related orders, especially in H2. - Hobel Bellows acquisition expected to contribute significantly to revenue starting Q1 FY27 onwards. - Order book doubled to approx. Rs. 314 crores (including Hobel), indicating strong demand pipeline. - Qualification activities for new SKUs (target to double first articles from ~200 last year) will progressively translate into production orders. - Kanoo JV in Saudi expected to add revenue toward end of FY27 or early FY28. - Business focuses on expanding precision parts, complex tooling, and turnkey systems offerings across aerospace, nuclear, semiconductor, and energy sectors. - The long-term outlook remains positive with India’s strategic position as a global aerospace supply base strengthening.

- FY27 expected to show meaningful growth in revenue and operations, surpassing Q4 FY26 quarterly revenue. - Strategic investments and acquisitions (e.g., Hobel Bellows) to start contributing visibly to operational and financial outcomes. - EBITDA margins expected to remain healthy and improve over FY26 levels (~31% in FY26). - Margins may be moderated due to consolidation of new ventures (e.g., Kanoo JV) but overall margin profile to remain stable. - PAT for FY26 was Rs. 63 crore; profitability recovered strongly in Q4, signaling resilience of operating model. - Long-term focus on building a precision engineering platform, expanding high-margin aerospace, nuclear, semiconductor sectors. - Increasing qualified SKU base and production orders pipeline to drive recurring revenues and margins. - FY27 to be a year of execution and scale-up, with positive outlook despite geopolitical and tariff-related challenges.

- **Kanoo JV in Saudi Arabia**: Planned overall CAPEX of $30 million, with Unimech holding 51% share; mainly for CAPEX and infrastructure buildup within the first three years. (Page 16) - **Saudi Joint Venture CAPEX**: Significant CAPEX addition expected during FY27 as the Saudi JV (Kanoo JV) gets operationalized. (Pages 7, 6) - **Hobel Bellows Acquisition**: Completed in April 2026; a strategic, capability-rich, and EPS accretive acquisition aligning with long-term platform building strategy. (Page 8) - **No major core business CAPEX**: No significant mission or facility additions planned for core business during FY27, outside of JV investments. (Page 6) - **Free Trade Warehousing Zone (FTWZ)**: Setup completed with expected operational benefits in inventory risk mitigation and customer stickiness. (Page 17) Overall, FY27 focuses on strategic investments primarily in the Saudi JV and integration of Hobel Bellows to expand capabilities and market reach.

- No major core business CAPEX is planned for FY27, indicating limited need for new funding on that front. - Significant CAPEX is planned for the Saudi JV with Kanoo Group, with a $30 million joint investment, 51% funded by Unimech. - Finance cost increased due to one-time foreign exchange losses; excluding this, financial costs were moderate. - Available funds were largely deployed for M&A activities during the year, suggesting equity/fund utilization. - No explicit mention of new fundraising through debt or equity in the current period or near future. - Management highlights normalizing operating expenses and improving working capital, implying stable internal cash flow management. - Overall, no explicit plans disclosed for raising fresh equity or debt as of now; focus is on organic growth and selective strategic investments like the Kanoo JV.

- Unimech's consolidated order book as of May 2026 stands at approximately Rs. 314 crores, more than double historical levels, including Hobel Bellows. - Aero tooling order book (excluding Hobel) is roughly Rs. 200+ crores, largely recurring with a 4-6 month execution timeline. - Nuclear orders have scaled up to around Rs. 87 crores with expected execution over 12-18 months. - Hobel Bellows order book stands at Rs. 107 crores with about a 12-month execution visibility. - Overall order timeline spans from 4 months (tooling) to 18 months (nuclear), with strong pipeline growth driven by increasing SKU qualifications. - Order inflows expected to grow in FY27, targeting to double first article inspections and increase production orders.