Aerospace and Defence Stock to Buy Now for 87% Upside, Recommended by Motilal Oswal

SYNOPSIS: Unimech Aerospace gains focus after Motilal Oswal’s ₹1,530 target, with a bull-case upside of 87% by FY28. Growth is driven by aerospace manufacturing, sector expansion, earnings recovery, margin improvement, and long-term defense and semiconductor opportunities.

The shares of a Small-Cap company specialising in high-precision engineering and the manufacturing of complex components are in the spotlight in the day’s trade following Motilal Oswal’s target with an upside potential of 87 percent in the bull case.

With a market capitalization of Rs. 6,519.85 crores in the day’s trade, the shares of Unimech Aerospace and Manufacturing Ltd rose upto 1.5 percent, reaching a high of Rs. 1,320.00 per share compared to its previous closing price of Rs. 1,300.00 per share.

What Happened

Unimech Aerospace and Manufacturing is in focus after Indian brokerage firm Motilal Oswal set a target price of Rs. 1,530 for the stock. This indicates an upside potential of 18% from its previous closing price. In its bull-case scenario, Motilal Oswal has assigned a price target of Rs. 2,248 by FY28, suggesting a potential upside of 87% from the stock’s last closing level. Reason for the Target:

Strong aerospace precision manufacturing positioning

Unimech operates in a high-entry-barrier segment supplying precision-engineered components, tooling, and assemblies for aerospace applications. Its capabilities in aero engines and airframes provide long-term growth visibility as global aerospace production ramps up and outsourcing trends benefit specialized Indian manufacturers.

Multi-sector expansion creates additional growth avenues

The company is expanding beyond aerospace into nuclear, semiconductor, and defense sectors through acquisitions and strategic partnerships. Initiatives such as the Hobel Bellows acquisition and the Kanoo JV in Saudi Arabia can diversify revenue streams and unlock new customer opportunities across high-value manufacturing industries.

Significant earnings recovery and growth outlook

FY26 is expected to represent a temporary trough due to tariff-related disruptions. The company is positioned for a strong recovery during FY27-28E, with projected revenue, EBITDA, and PAT growth accelerating significantly as export demand improves and operational efficiencies support margin recovery.

Margin recovery supports premium valuation

Despite a high valuation, the investment case is supported by expectations of EBITDA margins returning toward ~35%. Improved product mix, higher-value aerospace programs, and operating leverage from increased scale could drive profitability expansion and justify a premium multiple compared with traditional manufacturing companies.

Long-term defense and technology demand tailwinds

Global aerospace supply-chain localization, rising defense spending, and increasing semiconductor manufacturing investments provide structural growth opportunities. Unimech’s capabilities in precision manufacturing position it to benefit from these trends, making the stock a recovery-plus-growth opportunity rather than a conventional value investment.

Can Unimech Aerospace Stage a Massive Comeback?

Unimech Aerospace could be positioned for a strong comeback, driven by its expertise in high-precision engineering and manufacturing of complex aerospace components. The company’s capabilities, along with potential growth opportunities in the aerospace and defence sectors, could support long-term expansion.

Motilal Oswal’s bull-case target of Rs. 2,248 by FY28 reflects confidence in the company’s growth prospects and future earnings potential. With a low debt-to-equity ratio and an improving business outlook, Unimech Aerospace may have the potential to deliver significant value for investors.

Financials & Others

The company’s revenue rose by 19.64 percent from Rs. 68 crores in Q4FY25 to Rs. 82 crores in Q4FY26. Meanwhile, Net profit declined from Rs. 29 crores to Rs. 26 crores in the same period.

The company has a ROCE of 11.8% and ROE of 9.0%, indicating moderate efficiency in generating returns from capital employed and shareholder equity. Its debt-to-equity ratio is 0.17, showing low financial leverage and a conservative capital structure, which suggests limited reliance on debt for funding its operations and growth.

As of May 2026, the company’s total order book stood at Rs.  3,137 million, comprising Rs.  2,067 million from Unimech and Rs.  1,070 million from Hobel Bellows. It also secured Rs.  866 million in nuclear business orders. During Apr’25–Mar’26, it received orders worth Rs.  3,831 million, marking its highest-ever annual inflows.

Unimech Aerospace and Manufacturing Limited is a global precision manufacturing platform serving key industries such as aerospace, defence, energy, nuclear, and semiconductors. The company specialises in precision engineering and produces critical components, including aero tooling, ground support equipment, electro-mechanical sub-assemblies, and other high-precision parts for global customers.

Its offerings include aero engine and airframe tooling for major programs like LEAP, Pratt & Whitney, Rolls-Royce, Airbus, and Boeing, along with precision parts for emerging industries. With capabilities in high-mix, medium- and low-volume production and both build-to-print and build-to-spec models, it operates as a Tier-1 supplier to leading OEMs and MROs.

Unimech has a strong global footprint, catering to 7 countries and 35 customers, with 89% export revenue. It operates across 2.75 lakh sq. ft. of manufacturing space, supported by 853 employees and a wide product range, including 4,718 SKUs in tooling and sub-assemblies and 1,205 SKUs in precision machined parts.

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