Anand Rathi initiates coverage on Unimech Aerospace with a Buy, keeps target price at Rs 1,315
Driven by its focus on high-mix, low-volume production, Unimech specializes in complex, high-precision aero tooling, GSE, electromechanical sub-assemblies and precision components. Led by advanced manufacturing and strong OEM/licensee relationships, it plans to penetrate deeper into aerospace and nuclear energy, while diversifying into other high-mix, low-volume sectors organically and inorganically. The company has a dynamic management team at its helm, enabling them to achieve ~35% growth on sustainable basis and achieve ~37.5%+ RoICbyFY27.
Investment Rationale
The company is strategically positioned to capture structural tailwinds in aerospace, defence and energy sectors. Additionally, the pre-IPO capital raise offers multiple growth opportunities, while ongoing capacity expansions provide the flexibility to scale up. Excluding the M&A impact, Anan Rathi expects 34%/35.2%/36.7% revenue/EBITDA/PAT growth over FY24-27. The brokerage has initiated coverage on the stock, with a Buy rating and a target price of Rs 1,315,45xFY27e EPS of Rs 29.2. Key risks are high dependency on top five customers; significant segmental contribution from aerospace; heavy dependence on exports and regional performances.
Promoter/FII Holdings
Promoters held 79.82 per cent stake in the company as of 31-Dec-2024, while FIIs owned 1.62 per cent, DIIs 6.19 per cent.
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