Why is Anand Rathi bullish on this defence firm? Ups target, sees 28% gain

Unimech Aerospace in focus: Unimech Aerospace and Manufacturing (Unimech Aerospace) shares were in demand on Friday, June 27, 2025, in an overall subdued market, with the scrip rising as much as 1.52 per cent to hit an intraday high of ₹1,274 per share.

 

Around 10:30 AM, Unimech Aerospace share price continued to trade higher, up 1.13 per cent at ₹1,269 per share. In comparison, BSE Sensex was trading flat with a positive bias at 83,790.67 levels.  FOLLOW STOCK MARKET UPDATES TODAY LIVE

 

Why was this defence stock buzzing today?

 

The northward move in the Unimech Aerospace share price came after domestic brokerage Anand Rathi raised its target price to ₹1,610 per share, from ₹1,315 earlier. The new target price reflects an upside of 28.3 per cent from its previous close of ₹1,254.85. 

 

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Growth drivers behind the upgrade

 

Anand Rathi raised its target based on Unimech Aerospace’s strong growth outlook, including its ambitious goal of achieving ₹1,000 crore in revenue by FY29. 

 

In the aero-tooling segment, the company is targeting over 35 per cent compound annual growth rate (CAGR) over the next few years, supported by stock keeping units (SKU) approvals and customer additions. It is working to qualify LEAP engine stands for its anchor client and is also pursuing approvals for new Pratt & Whitney (P&W) and Rolls-Royce engine tools. In airframe tooling, the relationship with Boeing is expanding, and new engagements have begun with Airbus and Dassault, aided by leads from AeroShow 2025.  ALSO READ | Power Mech shares rise after ₹159 crore solar power project orders

 

Opportunities in PCA, semiconductor segments

 

The company’s Precision Component Assembly (PCA) segment is also expected to scale up in the medium-term, the brokerage noted. Growth is being driven by demand from aerospace OEMs, the nuclear energy sector, and the semiconductor equipment space. 

 

In the nuclear segment, the company plans to expand its product range and tap into opportunities from EMCCR projects and new reactors, targeting orders worth ₹400–500 crore by FY26-end. In semiconductors, Unimech Aerospace is currently supplying RFQs to a key customer, with order conversions expected in Q4FY26.

 

Valuation, financial outlook

 

At the current market price, Unimech Aerospace trades at 62.2x/43.0x FY26/27E EPS of ₹20.2/₹29.2. Anand Rathi models revenue, earnings before interest, taxes, depreciation and amortisation (Ebitda), and profit after tax (PAT) compound annual growth rates (CAGRs) of 43.7 per cent, 45.8 per cent, and 33.4 per cent respectively over FY25–27. 

 

The robust growth, analysts said, is expected to lift return on invested capital (RoIC) to 44.5 per cent from 32 per cent currently. Thus, the brokerage has maintained its ‘Buy’ rating and raised the valuation multiple to 55x FY27E earnings per share (EPS), up from 45x earlier.  ALSO READ | Mahindra Lifespaces to redevelop Mulund West project worth ₹1,250 crore

 

Key risks

 

Despite the strong outlook, the brokerage flagged risks such as heavy reliance on the top-10 customers, and vulnerability to export and regional performance disruptions.