Unimech lifts operating margin 3.37 percentage points sequentially
Revenue grew faster than expenses, but a higher tax rate limited net-profit growth to 14.03% QoQ.
Filed 27 Oct 2026, 21:55 IST · after market close · Unimech Aerospace and Manufacturing Ltd (UNIMECH)
Key takeaways
- Consolidated revenue grew 14.29% QoQ while expenses rose 8.22%, lifting operating margin by 3.37 percentage points.
- Net profit increased 14.03% QoQ, but the tax rate rose 4.27 percentage points to 28.04% and other income supplied 14.09% of pre-tax profit.
- Operating margin of 39.84% was 28.81 percentage points above the 11.03% median for 39 reporting Industrials peers.
Price around the results
Revenue growth outpaced costs in Q2FY27
Unimech’s consolidated revenue grew 14.29% QoQ to Rs 123 cr, while expenses rose 8.22% to Rs 73.99 cr. The resulting operating-profit growth of 24.87% was faster than revenue growth, lifting operating margin by 3.37 percentage points to 39.84%.
Higher tax rate diluted profit conversion
Profit before tax grew 20.79% QoQ, but net profit rose only 14.03% as the tax rate increased by 4.27 percentage points to 28.04%. Other income accounted for 14.09% of pre-tax profit, while interest and depreciation increased 4.64% and 13.57%, respectively.
Margin remains well above the Industrials peer median
The 39.84% operating margin was 28.81 percentage points above the 11.03% median among 39 Industrials peers that had reported the quarter. Sequentially, this was a second-quarter comparison from Q1FY27, when operating margin was 36.47%; the available trend therefore shows a 3.37-percentage-point improvement rather than a multi-quarter direction.
Management points to semiconductor and aerospace scaling
Management said its semiconductor development pipeline with a global OEM major had already generated commercial revenue in H1 FY27 and that it expects a sharp step-up in H2 FY27. The company said 596 parts are expected to be qualified by the end of FY27, while it also reported 250 first article inspections across PCA customers and a 10-year Honeywell Aerospace agreement for aero-engine components and control systems. Management also said the Saudi manufacturing facility under the Kanoo–Unimech JV involves joint investment of about USD 30 million.
Results were filed after market close
The consolidated results were filed at 21:55 IST on 27 October 2026, after market close. The immediate stock response is therefore not part of this update.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹123 cr | ₹108 cr | +14.29% |
| Other income | ₹6 cr | ₹7 cr | -13.49% |
| Expenses | ₹74 cr | ₹68 cr | +8.22% |
| Operating profit | ₹49 cr | ₹39 cr | +24.87% |
| Operating margin (%) | 39.84% | 36.47% | — |
| Interest | ₹2 cr | ₹2 cr | +4.64% |
| Depreciation | ₹9 cr | ₹8 cr | +13.57% |
| Profit before tax | ₹44 cr | ₹37 cr | +20.79% |
| Tax | ₹12 cr | ₹9 cr | +42.46% |
| Net profit | ₹32 cr | ₹28 cr | +14.03% |
| EPS (₹) | ₹6.24 | ₹5.48 | +13.87% |
Operating margin of 39.84% compares with a Industrials sector median of 11.03% across 39 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Unimech completed 250 first article inspections across PCA customers during H1 FY27.
- Commercial revenues were generated in H1 FY27 from the semiconductor development pipeline.
Guidance & outlook
- Semiconductor commercial revenues are expected to show a sharp step-up in H2 FY27.
- Serial production scaling over coming quarters is expected to create a multi-year revenue runway.
- The company expects 596 parts to be qualified by the end of FY27.
Expansion
- The company plans a Saudi manufacturing facility through the Kanoo–Unimech JV, with a joint investment of about USD 30 million.
- Unimech completed its first equity tranche in the Saudi JV, comprising SAR 15.3 million from Unimech and SAR 14.7 million from YBAK.
New orders
- Unimech signed a 10-year long-term agreement with Honeywell Aerospace for aero-engine components and control systems.
What to watch
- Whether operating margin holds above 39.84% in the next quarter.
- Whether the tax rate moves from 28.04% toward the prior-quarter 23.77%.
- Whether semiconductor commercial revenues show the sharp H2 FY27 step-up described by management.