Unimech soars 7%, up 144% from Mar low; what's driving this defence stock?

Unimech Aerospace: The stock price of the aerospace & defence company quoted higher for the third straight trading day, surging 12 per cent during the period.

Unimech Aerospace and Manufacturing share price movement

 

Unimech Aerospace and Manufacturing (Unimech) share price hit a new high of ₹1,698, rallying 7 per cent on the BSE in Monday’s intra-day trade on expectations of a healthy operational performance.

 

The stock price of the aerospace & defence company quoted higher for the third straight trading day, surging 12 per cent during the period. It zoomed 144 per cent from its 52-week low of ₹695.05 touched on March 30, 2026.

 

Unimech – Care Edge Ratings view

 

Unimech manufactures high-complexity tooling, precision components, assemblies and engineered systems for applications across aerospace, defence, nuclear, semiconductor, energy and industrial sectors. It manufactures aero tooling, ground-support equipment, precision components (PCA), engineered metallic bellows and complex assemblies for aerospace, defence, energy, semiconductor and industrial sectors.

 

 

Unimech is gradually transforming from an aerospace-tooling-focused company into an integrated precision-engineering platform. Precision components and assemblies segment addresses aerospace components, semiconductor equipment, nuclear systems, oil and gas parts, industrial applications and complex assemblies. The share of aero tooling declined from 90 per cent in FY26 to 76 per cent in Q1FY27, with the balance contributed by Hobel and precision-component businesses.

 

According to Care Ratings, despite tariff-related concessions, customer inventory rationalisation, softer shipment schedules and fixed-cost under absorption, its earnings before interest, taxes, depreciation, and amortization (EBITDA) margin remained healthy at 31 per cent in FY26 and recovered to 36.5 per cent in Q1FY27. "Profitability is supported by the high-mix, low-volume nature of operations, significant engineering content, product complexity, stringent quality requirements and relatively low subcontracting. Subcontracting costs were 3 per cent of revenue in Q1FY27, reflecting the company’s focus on developing and utilising in-house capabilities," the ratings agency said. 

To mitigate the impact of evolving US trade policies and enhance supply-chain flexibility, the company has operationalised a Free Trade Warehousing Zone (FTWZ) in India. The facility enables improved inventory management for customers, shorter lead times, greater delivery flexibility and reduced exposure to tariff and logistics-related disruptions. Going forward, CareEdge Ratings expects the company to sustain its profit before depreciation, interest, and taxes (PBDIT) margins in the range of 33-35 per cent, supported by the acquisition of Hobel, given its strong profitability profile. Margin stability is also expected to be aided by steady growth in the higher-margin aerospace tooling business, which is likely to offset the relatively lower-margin PCA business, and absorption of the initially elevated fixed-cost burden associated with the greenfield facility in Saudi Arabia. CHECK Stock Market LIVE Updates 

Choice Institutional Equities recommends ‘BUY’ rating with TP ₹1,950

 

Analysts at Choice Institutional Equities believe Unimech is well positioned to capture a multi-year aero tooling cycle, driven by rising aircraft production, new-generation engine programmes and recurring maintenance, repair, and overhaul (MRO) demand. The ~17,000-aircraft backlog, expanding global fleet and potentially $193 billion MRO total addressable market (TAM) by 2036 provide strong structural demand visibility. 

 

Unimech’s 86 per cent tooling revenue, 6,300 qualified stock keeping units (SKUs) versus 932 in FY22, and exposure to global original equipment manufacturers (OEMs)/Tier-1s further strengthen its positioning. Importantly, aerospace qualification creates customer stickiness and extends the revenue opportunity from initial tooling to repeat production and, eventually, MRO.

 

The brokerage firm expects precision components to become Unimech’s second growth engine, taking it beyond tooling into higher-value applications. The business already contributes 10 per cent of FY26 revenue, with ₹87 crore of nuclear orders and a ₹400 crore plus En-Masse Coolant Channel Replacement (EMCCR) pipeline providing early scale-up visibility. Hobel adds capabilities in bellows, tubing, welding and engineered assemblies, enabling higher content per customer, while the Saudi JV opens a localisation-led growth opportunity. The shift from individual components to assemblies, coupled with new markets, can materially expand Unimech’s share of wallet and growth runway, the brokerage firm said. Analysts initiated coverage on Unimech and assigned a ‘BUY’ rating with a target price of ₹1,950. Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers' discretion is advised.