Unimech Aerospace reported Q3 FY2026 revenues of Rs. 34 crores, impacted by high U.S. tariffs, though profitability remained slightly above break-even. The company celebrated a record Rs. 210 crores order book as of February 12, 2026, driven by strong nuclear wins and easing tariff headwinds, which dropped from 50% to 18%. Strategic growth through the Saudi JV and FTWZ operationalization are key focus areas for near-term revenue recovery.
Q3 FY2026 Performance and Environment Shift
Unimech Aerospace and Manufacturing Limited held its Q3 FY 2026 Earnings Conference Call on February 13, 2026. Chairman and Managing Director, Mr. Anil Kumar Puttan, addressed the soft quarter, noting revenues stood at Rs. 34 crores, lower than the historical run rate, with profitability slightly above break-even. This softness was attributed to temporary order slowdowns in aero tooling due to exceptionally high U.S. tariffs and seasonal December effects.
Crucially, the external environment sentiment has improved significantly following the recent tariff reduction to 18% from 50%, positioning India favorably. This development is expected to restore customer confidence and normalize order flows.
Strengthening Order Book and Strategic Progress
The company reported solid progress in order intake. The aero tooling business secured ground support equipment orders worth Rs. 35 crores, while the Nuclear business won orders totaling about Rs. 68 crores. As of February 12, 2026, the total order book reached a record high of Rs. 210 crores, double the past booking levels, providing strong execution visibility.
Free Trade Warehousing Zone (FTWZ)
The FTWZ setup is nearing completion, with regulatory approvals expected this quarter. Once operational, the FTWZ will allow customers to maintain duty-free inventories, reducing lead times and insulating aero tooling revenues from future tariff volatility.
International Expansion: Saudi Arabia JV
The strategic joint venture with the Yusuf Bin Ahmed Kanoo Group in Saudi Arabia has been formally established, with Unimech holding a 51% stake. An investment of $30 billion will be deployed over three years, initially focusing on oil and gas components. The venture aims for $30 million in revenue by year five, supported by a 35% EBITDA margin.
Precision Components and Nuclear Segment
In the precision segment, the focus remains on expanding offerings across various industries. Encouragingly, the company received additional FAA requests for 24 new parts. The nuclear segment has already secured Rs. 68 crores in orders, with continued bidding activity across NPCIL, NTPCL, and NFC programs.
Financial Deep Dive (CFO Remarks)
Ramakrishna Kamojhala, CFO, noted that Q3 revenue of Rs. 34 crores compared to Rs. 61 crores in Q2, with YTD revenue at Rs. 159 crores. Gross margins remained strong at 71% for Q3. EBITDA margins were 4.6% for Q3, while Year-to-Date EBITDA stood at 25%. The company consciously maintained operational readiness (60% utilization for the quarter) to prepare for the anticipated normalization.
Working capital usage increased to Rs. 70 crores, stabilizing in the expected 150-160 days range moving forward.
Outlook and Future Guidance
The management expects Q4 FY 2026 to show recovery, targeting revenue to surpass last year’s total of Rs. 240 crores. Year-end margins are targeted to reach 25% EBITDA and 25% PAT. Long-term, the company foresees the revenue mix shifting, with aero tooling potentially moving from 77% to 65% and precision components growing to 35% over the next three years (or potentially 60:40).
Q&A Session Takeaways
- Order Book Split: Of the Rs. 210 crores order book, Rs. 68 crores is nuclear, with the remainder primarily split between aero tooling (around Rs. 135 crores) and precision business.
- Semiconductors: The company is qualifying for the semiconductor market, with visibility for about $0.5 million in qualified orders next year, viewing this as an entry point to high-volume manufacturing.
- Diversification: Management confirmed active diversification into the energy sector (nuclear and oil/gas via JV) alongside continued focus on aerospace, viewing capabilities across these industries as fungible.
- Export Mix: While currently 95% export, the mix is expected to stabilize towards an 80:20 export-to-domestic ratio over the next three years.
Closing Remarks
The management expressed confidence that temporary volatility is passing, supported by strong order book resilience and strategic mitigants nearing fruition. The focus remains on discipline, converting inventory and pipeline into revenue, and building a more resilient business for the long term.
Source: BSE
