Unimech Aerospace Acquires Hobel Bellows in INR450 Crore Strategic Deal
Unimech Aerospace and Manufacturing Limited has announced the acquisition of Hobel Bellows, a specialized manufacturer of metallic bellows and precision engineered assemblies, for an enterprise value of INR450 crores. The all-cash transaction includes a 10% holdback for one year. For the year ended March 31, 2026, Hobel Bellows reported approximately INR129 crores in revenue with EBITDA margins exceeding 50%. The acquisition is margin accretive and debt-free, with the target business generating a return on capital employed of over 50% prior to acquisition. The deal was funded through internal funds, with no additional borrowings planned. The management expects conservative growth of 15% to 17% over the next 3 to 4 years, driven by organic momentum and synergy-led opportunities. The acquisition provides Unimech with new capabilities in metal forming, hydroforming, precision pipe fabrication, and advanced welding processes, enabling expansion into engineered assemblies and subsystems.
*this image is generated using AI for illustrative purposes only.
Unimech Aerospace and Manufacturing Limited has announced the acquisition of Hobel Bellows, a specialized manufacturer of metallic bellows and precision engineered assemblies, for an enterprise value of INR450 crores. The all-cash transaction includes a 10% holdback for one year. The announcement was made during an analyst and institutional investor conference call held on April 28, 2026.
For the year ended March 31, 2026, Hobel Bellows reported approximately INR129 crores in revenue with EBITDA margins exceeding 50%. The acquisition is margin accretive and debt-free, with the target business generating a return on capital employed of over 50% prior to acquisition. The deal was funded through internal funds, with no additional borrowings planned.
Strategic Capabilities and Infrastructure
Hobel Bellows brings complementary capabilities across metal forming, hydroforming, precision pipe fabrication, advanced welding processes, and automated testing validation systems. The business operates from a 200,000 square foot manufacturing facility and a 20,000 square foot warehouse in the Visakhapatnam SEZ. The company utilizes robotics and automation to ensure repeatable precision, with quality control processes including CMM and shadowgraph testing.
The target company serves marquee global OEMs, with nearly 90% of revenues derived from exports to markets including the UK, United States, Singapore, and China. Its product portfolio includes metallic bellows ranging from 2 inches to 16 inches (500 grams to 330 kg weight), designed for engines spanning 900 to 9,000 BHP across diverse industries.
Financial Metrics and Growth Outlook
| Parameter | Value |
|---|---|
| Revenue (FY26) | INR129 crores |
| EBITDA Margins | Exceeding 50% |
| Gross Margins | Slightly less than 70% |
| ROCE (Pre-acquisition) | Over 50% |
| Working Capital Retained | Approximately INR60 crores |
| Current Order Book | INR65 crores (6 months) |
| Capacity Utilization | 50% to 60% |
The management expects conservative growth of 15% to 17% over the next 3 to 4 years, driven by organic momentum and synergy-led opportunities. The global metallic bellows market is estimated at $2.6 billion with expected annual growth of 6%. Current capacity utilization provides sufficient headroom to support growth without requiring additional capex in the near term.
Synergies and Strategic Fit
The acquisition enables Unimech to increase wallet share with existing customers through a broader and more integrated offering. The company plans to expand presence in industrial locomotive and power sectors, strengthen positioning in aerospace, defense, nuclear, and other high-entry barrier segments, and accelerate time-to-market by gaining access to capabilities that would otherwise take years to build organically.
Management noted that the most meaningful synergies are on the revenue side through cross-selling bellows into nuclear and industrial segments, leveraging Hobel's presence in marine and naval ecosystems. The company will work towards AS9100 certification to enter aerospace segments, with NPCIL certification expected to take approximately one year for nuclear applications.
Customer Concentration and Valuation
The target company has customer concentration with two key OEM groups contributing approximately 93% of revenue. However, this exposure is distributed across multiple entities operating in different geographies and end-use segments including power generation, automotive engines, industrial systems, and locomotive engines. The valuation of approximately 3.5x revenue represents about 6x to 7x EBITDA multiple, which management characterized as attractive given the high-margin nature of the business.
The acquisition rationale includes the absence of a succession plan at the target company, with the owner having reached retirement age and family members settled abroad. Unimech was identified as a suitable partner to continue and grow the business.
Historical Stock Returns for Unimech Aerospace and Manufacturing
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +2.89% | +1.15% | +46.03% | -0.10% | +13.15% | -25.06% |
How quickly can Unimech leverage Hobel's existing OEM relationships to cross-sell its precision machined components, and what revenue uplift could this generate within the first two years?
Given that ~93% of Hobel's revenues are concentrated in two OEM groups, what steps will Unimech take to diversify the customer base and reduce concentration risk?
How might the pending NPCIL nuclear certification and AS9100 aerospace qualification reshape Hobel's revenue mix and margin profile once achieved?
20
Create Custom Screeners 
Access 200+ Pre-built Filters 
Use 50+ Readymade Screener 
