Azad Engineering vs Unimech Aerospace: Which company has stronger aerospace presence?

The precision engineering landscape across aerospace, defence, energy and high-end industrial applications continues to gain investor interest, with both Azad Engineering and Unimech Aerospace & Manufacturing emerging as prominent players in different segments of the global supply chain. While each company has built scale and capabilities in its own niche, both remain in expansion mode, and investors are closely tracking how these businesses plan to capture long-term demand without revealing too much ahead of time.

Azad Engineering

Azad Engineering, founded by Rakesh Chopdar in 1983, manufactures precision-forged and machined components used in clean energy, aerospace, defence, oil and gas and standalone power supply systems, operating from its large-scale facility in Hyderabad. The company produces every type of radial and axial flow blade and is equipped with a forge shop, heat treatment unit, advanced CNC systems, specialised inspection labs, a heavy machining division and proprietary manufacturing software. It was recently certified to supply nuclear turbine components to EDF France. Azad Engineering has a market cap of Rs.10,733.49 crores and a current market price of Rs.1,662.

The company is a mission-critical supplier to global OEMs and works with six major aerospace and defence manufacturers, delivering components for major aircraft platforms including the A320, A350, B737, B747, B777 and Gulfstream G550. In turbines, it supports 5 dominant global players collectively controlling roughly 75 percent of the market. CARE Ratings notes that its aerospace customer base spans Honeywell, GE Aviation, Eaton, Boeing, Rolls Royce, Pratt & Whitney, Rafael, HAL and others, with exports extending to the US, UK, Europe, Japan and the Middle East. Over the past decade, it has completed more than 1,700 product qualifications and 45 process approvals, placing it among a small group of global competitors able to match such depth.

The company’s manufacturing footprint includes four operating units in Hyderabad covering 20,000 sq. metres and an ongoing expansion across two new phases, Phase 1 covering 94,899 sq. metres and Phase 2 covering 67,267 sq. metres, each built for specific customer programmes. A new lean facility dedicated to Siemens has already been launched to support gas, industrial and thermal turbine engine components. During the quarter, Azad also received Phase 2 of its Mitsubishi contract for high-value rotating and stationary airfoils, taking the combined value of this engagement to Rs.1,387 crores. 

It also signed its first long-term understanding with Safran Aircraft Engines for defence applications. Energy and oil and gas contributed Rs.117 crores, accounting for 81 percent of quarterly revenue, whereas aerospace and defence formed 16.9 percent at Rs.24 crores, expanding more than thirty percent year-on-year. Its subsidiary, Azad VTC, recently secured NADCAP accreditation for coatings, significantly strengthening its position on global qualified supplier lists. Raw material costs eased due to domestic sourcing improvements and other income grew from interest earned on unspent QIP funds.

Management indicates that the order book has strengthened meaningfully with the signing of Mitsubishi Phase 2, taking the combined contract value to Rs.1,387 crores. This pipeline, together with the ongoing facility expansion, gives strong visibility for the remainder of FY26. They expect notably better performance in the second half of the year and remain confident of delivering their projected 25-30 percent revenue growth. With government initiatives promoting indigenisation and co-development of engines and defence systems, Azad believes it is well-positioned to scale its participation across multiple platforms.

The company notes that its rapid expansion is still in early stages since the December 2023 IPO. The new facilities being built are described as nearly 10x the scale of existing infrastructure and require 2-3 years to complete due to their size of five to six lakh square feet. Management adds that its wallet share across customers in energy, aerospace, defence and oil and gas is only about 1-1.5 percent, leaving substantial scope for long-term growth, which is already visible in recent contract wins.

Unimech Aerospace & Manufacturing

The company produces aero tooling, high-precision components and mechanical assemblies for aerospace, defence, power generation, nuclear and semiconductor industries. Its operations run through multiple manufacturing units in Peenya, Bengaluru. The company serves global OEMs and tier-one suppliers across its specialised capabilities. Unimech has a market cap of Rs. 4,995.67 crores and trades at a current market price of Rs. 982.30.

Unimech operates 243,000 sq. ft of production space across four units and employs 886 people. It caters to customers in 7 countries, serves 35 clients and generates nearly 90 percent of its revenue from exports. Its customer mix includes engine licensing companies, aircraft OEMs, engine OEMs, MRO centres, nuclear PSUs, defence organisations and semiconductor equipment manufacturers. Its capabilities span design, engineering, manufacturing, fabrication, special processes, electronics integration, assembly and end-to-end inspection, including machining, electro-discharge systems, grinding, heat treatment (through certified vendors), anodizing, polymer coatings and multiple non-destructive test methods.

The tooling segment contributed 78 percent of Q2 revenue and continued to perform steadily despite geo-political tariff challenges. A notable achievement this quarter was a significant win in ground support equipment under the LEAP engine programme, valued at USD 4 million, substantially higher than the company’s typical USD 0.5 to 1 million order size. Its precision engineering division, which marks its diversification beyond tooling, is gaining momentum with the onboarding of a new aerospace customer and active development of nearly 100 FAI articles. In semiconductors, several parts are in final approval stages, with potential long-term orders expected from 2026. 

The company has completed over 50 FAIs across semiconductor, medical and defence tier-one OEMs in recent months. The SKU base expanded by 10 percent in Q2 to over 5,200. The order book stands at Rs.105 crores as of early November, with 95 percent linked to the tooling business.

Management highlights that FY26 is a strategic investment year focused on capacity expansion, scaling high-value engine tooling and strengthening the customer base across its precision manufacturing operations. Discussions are underway with several global OEMs, including the onboarding of a European aerospace customer and evaluation of a large RFQ. A long-term agreement with a tier-one supplier for single-aisle aircraft parts is progressing, and the company is simultaneously pursuing opportunities in oil and gas drilling components, with multiple RFQs already submitted.

In the domestic nuclear space, Unimech remains optimistic, having submitted bids worth around Rs.800 crores, with additional RFQs expected soon. Management acknowledges tariff-related challenges in the US market, which have slowed orders as customers shift from build-to-inventory to build-to-order, lengthening lead times. To offset this, the company is progressing with a free-trade warehousing zone, expected to be operational in Q4, and using drop-shipment routes to support non-US customers, who contribute roughly sixty-five to seventy percent of consumption. Management reiterates that asset turnover is expected to improve meaningfully to 3x-3.5x over the next 2 to 2.5 years as utilisation levels rise.

Written by Manan Gangwar

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