Unimech Aerospace share price gains on Motilal Oswal upside call

Unimech Aerospace share price climbed over 6 percent on Thursday after Motilal Oswal initiated coverage on the NSE-listed tooling and precision engineering company with a Buy rating, a base-case target of ₹1,530 and a bull-case target of ₹2,248.

Share Price Movement

Stock Performance

Metric	Value
Previous close (Wednesday)	₹1,268
Base-case target price	₹1,530
Bull-case target price (FY28)	₹2,248
Day move on Thursday	Over +6% intraday
Implied upside vs Wednesday close (base case)	27%
Implied upside vs Wednesday close (bull case)	87%
Year-to-date gain in 2026	About 40%

• Unimech Aerospace shares ended Wednesday at ₹1,268 on the NSE.
• Motilal Oswal’s base-case target of ₹1,530 implies a 27 percent upside.
• The bull-case target of ₹2,248 by FY28 implies an 87 percent upside.
• The stock traded more than 6 percent higher on Thursday after the initiation.
• Unimech Aerospace has already gained about 40 percent so far in 2026.

Why Unimech Aerospace share price moved

Key Event

Item	Details
Event	Initiation of coverage
Brokerage	Motilal Oswal Financial Services
Rating	Buy
Base-case target price	₹1,530
Bull-case target price	₹2,248 by FY28
Stated upside vs last close	27% (base case), 87% (bull case)

• Motilal Oswal initiated coverage on Unimech Aerospace with a Buy rating.
• The brokerage set a base-case target price of ₹1,530 per share.
• Its bull-case scenario values the stock at ₹2,248 by FY28.
• The initiation cited long-term growth drivers across multiple end markets.
• The positive brokerage note acted as the primary trigger for Thursday’s share price move.

Business Profile and Growth Drivers

Segment Contribution FY26

Segment	Customers served	FY26 revenue share
Aero engine and airframe tooling	18 customers	Around 80%
Precision engineering and components	17, 18 customers	Around 20%

• Aero tooling, including engine and airframe tools, is Unimech’s core revenue driver.
• The company manufactures specialised tools for LEAP, Pratt & Whitney and Rolls-Royce engines.
• It supplies airframe tooling for Airbus and Boeing platforms.
• Unimech serves 18 customers in its aero tooling segment, according to the brokerage.
• Precision engineering is focused on high-mix, low-volume parts and assemblies.
• The precision segment caters to nuclear, aerospace and defence, semiconductor and electromechanical industries.
• Unimech currently serves about 17, 18 customers in precision engineering.
• Motilal Oswal expects precision engineering to grow faster than aero tooling.

Financial Highlights and Projections

Financial Performance Outlook FY26, FY28E

Metric	FY26 actual trend	FY26, FY28E CAGR	FY26 level	FY28E level
Revenue	Flat in FY26	74%	Not specified	Not specified
EBITDA	Margin contraction in FY26	83%	Margin ~35%	Margin ~35%
PAT	Declined in FY26	57%	Not specified	Not specified
EBITDA margin	Compressed in FY26	Stable	35%	Around 35%
RoE	Lower in FY26	Improving	9%	16%
Pre-tax RoCE	Lower in FY26	Improving	12%	18%

• Unimech reported flat revenue and profit decline in FY26 due to margin pressure.
• Motilal Oswal forecasts a 74 percent revenue CAGR between FY26 and FY28.
• EBITDA is projected to grow at 83 percent CAGR over the same period.
• PAT is expected to expand at a 57 percent CAGR through FY28.
• EBITDA margin is estimated to remain around 35 percent.
• RoE is projected to rise from 9 percent in FY26 to 16 percent by FY28.
• Pre-tax RoCE is expected to improve from 12 percent to 18 percent.
• Growth is seen coming from aero tooling recovery and precision components expansion.

Strategy, Acquisitions and International Expansion

Key Strategic Initiatives

Item	Details
Core strategy	High-mix, low-volume precision engineering
Recent acquisition	Hobel Bellows
Joint venture	Kanoo JV
Strategic investment	Dheya Engineering
Planned expansion	Manufacturing footprint in the US
IPO proceeds (Dec 2024)	₹500 crore total, ₹250 crore fresh issue
Capex allocation	₹80.3 crore
Debt repayment	₹40 crore
Working capital	₹70 crore

• Unimech focuses on high-mix, low-volume precision engineering to deepen customer relationships.
• The company acquired Hobel Bellows to strengthen its capabilities.
• It has formed a joint venture with Kanoo to expand regional presence.
• Unimech has invested in Dheya Engineering to broaden its engineering portfolio.
• The company is exploring a manufacturing base in the United States.
• US expansion may be pursued through acquisitions or organic growth.
• IPO proceeds from December 2024 are earmarked for capex, debt reduction and working capital.
• ₹80.3 crore is planned for capital expenditure to support capacity and technology.
• ₹40 crore is allocated towards debt repayment.
• ₹70 crore is set aside for working capital needs.

Industry Context and Risk Factors

Sector Exposure

Sector	Role for Unimech
Aerospace and defence	Core aero tooling and precision parts
Energy, including nuclear	Precision components and assemblies
Semiconductor equipment	Emerging precision engineering opportunity
Electromechanical and others	Additional precision engineering markets

• Motilal Oswal sees long-term demand in aerospace and defence supporting Unimech’s growth.
• New aircraft engine programmes are expected to drive tooling requirements.
• A shift in global MRO demand towards Asia benefits regional suppliers like Unimech.
• Precision engineering opportunities in nuclear and semiconductor equipment add diversification.
• The brokerage cites high revenue concentration in aerospace as a risk.
• Dependence on the top five customers increases counterparty exposure.
• Significant reliance on exports and limited international markets adds geographic risk.

What Investors Are Watching Next

• Execution of projected revenue and earnings growth through FY28.
• Progress on US manufacturing footprint plans and potential acquisitions.
• Ramp-up in precision engineering across nuclear, defence and semiconductor segments.
• Utilisation of IPO funds in capex and its impact on capacity and margins.
• Changes in customer concentration and diversification of the order book.
• Next set of quarterly and annual results to validate Motilal Oswal’s growth assumptions.

Frequently Asked Questions

Why did Unimech Aerospace share price rise today?

Unimech Aerospace shares moved higher after Motilal Oswal initiated coverage with a Buy rating and set a base-case target of ₹1,530 and a bull-case target of ₹2,248 by FY28. The brokerage pointed to growth prospects in aero tooling and precision engineering, supported by new aircraft engine programmes, MRO demand shifting towards Asia and expansion into sectors such as defence, energy and semiconductors, which together lifted investor sentiment.

What growth outlook has Motilal Oswal given for Unimech Aerospace?

Motilal Oswal expects Unimech Aerospace to deliver a revenue CAGR of 74 percent, EBITDA CAGR of 83 percent and PAT CAGR of 57 percent over FY26, FY28, while maintaining EBITDA margins around 35 percent. The brokerage projects RoE to improve from 9 percent in FY26 to 16 percent by FY28 and pre-tax RoCE from 12 percent to 18 percent, driven by recovery in aero tooling, expansion in precision components and contributions from acquisitions and joint ventures.

What are the key risks identified for Unimech Aerospace?

Motilal Oswal flags several risks for Unimech Aerospace, including high revenue concentration in the aerospace segment and dependence on its top five customers, which raises client concentration risk. The company’s significant reliance on exports and a limited number of international markets adds geographic exposure. Any slowdown in global aerospace demand, delays in new engine programmes or disruptions in key export markets could affect the growth and margin trajectory outlined in the brokerage’s projections.