Buy Unimech Aerospace and Manufacturing; target of Rs 1610: Anand Rathi

Anand Rathi's research report on Unimech Aerospace and Manufacturing

We recently engaged with the Unimech management for insights into the present business environment and outlook. The company expects 35%+ growth in its aero-tooling segment over the next few years, driven by SKU approvals and client additions. In PCA, strong nuclear orders are anticipated (EMCCR and new reactors), with the order book expected to grow Rs4bn–5bn by end-FY26. The company has received RFQs for its anchor customer in semiconductor equipment and expects order conversions from Q4 FY26. Excl. inorganic, it is targeting Rs10bn revenue by FY29.

Outlook

Valuation. At the CMP, the stock trades at 62.2x/43.0x FY26e/27e EPS of Rs20.2/29.2. Over FY25-27, we model 43.7/45.8/33.4% revenue/EBITDA/PAT CAGRs, driving RoIC to 44.5% vs 32% now. We retain a Buy rating with a higher TP of Rs1,610, 55x FY27e EPS (vs 45x FY27e EPS earlier).

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