Unimech Aerospace and Manufacturing Ltd (NSE: UNIMECH) Q3 2026 Earnings Call dated Feb. 13, 2026
Corporate Participants:
Anil Kumar P — Chairman and Managing Director
Ramakrishna Kamojhala — Whole-time Director and Chief Financial Officer
Rajanikanth Balaraman — Whole-time Director
Analysts:
Prasheel Gandhi — Analyst
Keyurkumar Vadaliya — Analyst
Unidentified Participant
Aniket Madhwani — Analyst
Balasubramanian A — Analyst
Nisarg Desai — Analyst
Darshit Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 and FY ’26 Earnings Conference Call of Unimech Aerospace and Manufacturing Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Prasheel Gandhi from Anand Rathi Share and Stock Brokers Limited. Thank you. And over to you, sir.
Prasheel Gandhi — Analyst
Thanks, Steve. Good morning, everyone. We welcome you all to Q3 FY ’26 earnings conference call for Unimech Aerospace. We have with us Mr. Anil Kumar Puttan, Chairman and Managing Director; Mr. Rajanikanth Balaraman, Whole-time Director; Mr. Ramakrishna Kamojhala, Whole-time Director and CFO; Mr. Mani Puthan, Whole-time Director; Mr. Preetham S V, Whole-time Director, and Mr. Aakash Jaiswal, AGM Investor Relations.
I would now like to hand over the call to Mr. Anil for his opening comments. Over to you, sir.
Anil Kumar P — Chairman and Managing Director
Good morning, everyone, and welcome to Unimech Aerospace and Manufacturing Limited’s Q3 FY ’26 earnings call. Thank you for joining us today. Let me begin by brief addressing the quarter gone by. For Q3 FY ’26, revenue stood at INR34 crore, lower than our historical run rate, and profitability was slightly above breakeven. This was largely on account of temporary slowdown in the order pickup in our aero tooling segment, driven by exceptionally high U.S. tariff, during the quarter and seasonal effects in December.
However, I am pleased to share that the external movement — external environment sentiment has meaningfully improved since the positive macro development with tariff reduction, which happened earlier this month, with the tariffs reducing to 18% from 50% effectively immediately. Importantly, India is now among the most favorably tariffed manufacturing nations for the U.S. within South and Southeast Asia. This development significantly improves customer economics, encourages rebuilding of inventory at customer warehouses, restores confidence in order flows. We believe this marks a clear turning point, and we expect order normalization and better traction from here on.
As we have consistently highlighted, the softness witnessed in the business was never structural. The elevated tariff, which had temporarily pushed customers to move from inventory-led procurement to essential drop shipment only ordering and differing non-urgent tools. These constraints are easing, and discussions with customers indicate a more constructive ordering environment ahead.
Most importantly, I would want to highlight, we will continue to remain deeply embedded within the customer ecosystem, supported by strong technical credentials, high switching costs, long qualification cycles. These fundamentals continue to provide long-term revenue visibility and stability for us in the business. Our efforts to place strategic mitigants over the last several months is also strongly progressing. We have accelerated multiple initiatives to structurally build the business and position Unimech strongly for the next growth phase.
The free trade warehousing zone, as indicated during the previous earnings call, we continue to advance the FTWZ establishment. The facility setup is largely complete, and we are currently awaiting certain regulatory approvals. We are pursuing these actively and expect to conclude the approval process, subject to regulatory timelines, during this quarter.
Once operational — once FTWZ is operational, this will allow us — our customers to build and maintain duty-free inventories of aero engine and airframe tools, ensure regular and predictable order flows, reduce lead times and logistics friction. For Unimech’s perspective, this will support our aero tolling revenues from any future tariff volatility, even as we benefit from recently reduced tariff regime and makes us even more critical strategic partner.
Strengthening order book. While de-risking the business, we have also made solid progress in order intake. Aero tooling business, ground support equipment — in the aero tooling business, we have ground support equipment orders worth of INR35 crore. Nuclear business, we have won a couple of orders amounting to about INR68 crore. As of February 12, ’26, the order book stands at INR210 crore, which is a record quarter intake, double from our past order bookings. This gives us a good visibility as execution accelerates.
International expansion, Saudi Arabia. As part of our global footprint strategy, we have entered a strategic alliance in form of joint venture with the Yusuf Bin Ahmed Kanoo Group, one of the oldest and most respected diversified family-owned businesses — business conglomerates in the Middle East, with a strong legacy spanning over 135 years, they operate across multiple sectors including shipping and logistics, travel and leisure, industrial and energy solutions, machinery, chemicals, oil and gas services, power and water and real estate. This will be subsidiary for Unimech as we have established controlling rights in the JV.
I believe you would have taken a note of our exchange announcement last month. Happy to indicate we are progressing steadily on the JV to be positioned in Dammam, Saudi Arabia, with an initial focus on oil and gas components, followed by gradual expansion into utilities, energy, and aerospace. This initiative aligns strongly with Saudi Vision 2030, localization mandates, rising regional demand for precision manufacturing. We believe this platform can unlock meaningful growth over the next three to five years while expanding Unimech’s addressable market beyond India.
Speaking about business performance, in aero tooling, Q3 was impacted as we could not ship many orders due to elevated tariffs and year end holiday slowdown. Our inventory buildup remains strong at the end of the quarter three, which positions us well for the monetization and improved revenues in this quarter. With tariffs now favorable and FTWZ progressing, we expect a gradual and sustained improvement in order flows, as evidenced in the February so far. We have received orders worth INR1.2 million just in the first week of February from our customers.
Precision components and assemblies. Our focus continue to build our offerings serving a variety of industries in this precision segment, not only limited to aerospace, we continue to progress steadily in the segment. And as typical for this segment, given the long qualification cycles, we will need some patient effort to develop this vertical. However, encouraging indications include increased FA requests. Post completion of FAs in the previous quarters, we have received additional FA requests for 24 new parts. Higher FA conversions. For semiconductors OEMs, we have already received production orders, though small currently will be meaningful in the next two years. For the production order received, we have a 52 weeks visibility also.
Additionally, in FY ’27, we will see a lot many qualifications — activities happening, rising RFQ complexity, advancing long-term agreements, discussions with Tier 1s and OEMs. In the nuclear segment, we have already secured INR68 crore worth of orders, with some order — some more order awards expected towards this fiscal year end. Our bidding activity continues across various nuclear and other programs offered by NPCIL, NTPC, and NFC. Optimistically, with the new SHANTI Bill being introduced, private sector participation will improve sustainability. Our presence in this segment, we will see healthy growth in the years to come.
Business approach for the next quarter. Despite the headwinds encountered during the — most of FY ’26 and considering the recent geopolitical developments announced earlier this month, we have — we continue to work toward exceeding last financial year’s revenue, addressing logistics and shipment complexities, and subject to FTWZ operationalization.
Our operational readiness remains strong. As of the end of February, INR30 crore worth of goods already manufactured and ready for shipment. This includes the FG and — FG inventory. Another INR60 crore to INR70 crore under production, including some engine stands orders, giving stable prospects for this quarter.
Before I hand over to Ram, I would reiterate, our long-term vision remains intact despite facing periods of near-term volatility with our strategic direction unchanged to build Unimech into a globally competitive high-precision manufacturing platform across — across aerospace and defense, energy, industrial, and emerging technologies. We are even more constructively optimistic, supported by tariff normalization, FTWZ operationalization, precision segment steadiness, healthy nuclear order inflows, new customer qualifications translating into meaningful revenues.
With that, I will now hand over to Ram to walk you through the financial performance. Thank you.
Ramakrishna Kamojhala — Whole-time Director and Chief Financial Officer
Thank you, Anil. Good morning, everyone. This is Ramakrishna, CFO, Whole-time Director. Let me take you through our financial performance for Q3 FY ’26 and share our perspective on the outlook. Before talking about the numbers, I want to briefly touch upon the recent external developments and how they position us going forward.
Tariff pressures, which have been a significant drag through most of this year, have now eased with the recent reduction in cross-country tariff rates. We expect this shift to meaningfully improve the operating environment and restore the momentum we had anticipated at the start of the year. We also foresee a gradual release of deferred demand and pickup in order execution as customers start building inventories. This aligns with the structural multi-year expansions of all global aerospace industry.
Additionally, ongoing U.S.-India, EU-India trade discussions are evolving favorably and we see these bilateral arrangements strengthening long-term market access for Indian aerospace suppliers. Overall, these changes reinforce our confidence in a stronger operating trajectory ahead.
Coming to financial performance revenue-wise, Q3 FY ’26 revenue stood at INR34 crores compared with INR61 crores in Q2, taking YTD revenue to INR159 crores. The sequential decline primarily reflects, as Anil mentioned, deferred customer offtake, inventory rationalization at key customers, seasonal execution delays. Our Aero tooling segment contributed 77% of revenue over the nine months period and remaining being precision component segment.
With regard to margins, despite a soft quarter, gross margins remained strong at 71% for Q3 and 68% YTD level, underscoring the resilience of our cost structure. Subcontracting costs were elevated this quarter at 7.3%, but this is largely a function of lower revenue of the asset. Importantly, YTD subcontracting cost improved to 6.8%, reflecting sustained internal efficiency gain.
EBITDA margins came in at 4.6% for Q3 and 25% for nine months period. We expect the margins to improve meaningfully by year end as revenue normalizes. Breaking down cost dynamics further. Employee cost were maintained at INR12 crores versus INR13 crores last quarter, supported by tighter workforce planning and controlled hiring. Other expenses remained stable at INR10 crores, reflecting continued cost discipline. Depreciation rose to INR6.9 crores versus INR6.3 crores in Q2 due to capitalization of four new machines and additional rate of use charges from the expanded facilities. Finance cost increased marginally to INR1.6 crores on account of higher working capital usage during this quarter.
Net profit stood at INR2.4 crores for the quarter and INR37 crores at YTD level, impacted by lower revenue absorption on a largely fixed cost base. I want to emphasize that we consciously maintained operation readiness and full capacity rather than cutting cost in anticipation of normalization, something that is now beginning to reflect in the macro environment.
With regard to working capital, as indicated earlier, working capital consumption continues to rise in line with our manufacturing model and customer schedules. The usage of working capital bank limit increased to INR70 crores compared with INR50 crores in Q2 as we continue to production despite slower order pickups. Looking ahead, we expect working capital requirement to stabilize in the 150 to 160 days range, which is appropriate for the scale and the nature of our business.
Coming to assets and capacity utilization. Capacity utilization for the quarter was around 50,% with annualized machines availability exceeding 7 lakh hours. Our ongoing capacity additions are strategic and future-oriented, enabling us to transition towards higher value assemblies and more complex component manufacturing. FA’s progress remain encouraging, and utilization is expected to improve steadily as demand picks up and precision component business started progressing meaningfully. Fixed assets turnover for Q3 stood at 1.4 times, reflecting lower utilization in this quarter.
Coming to new joint venture in Saudi Arabia, as Anil mentioned, during the quarter, we formally established Kanoo-Unimech JV, a capital display and platform designed to scale in a high-demand energy ecosystem. A couple of key highlights of this JV is Unimech is going to have 51% stake in the JV. An investment of $30 billion will be deployed by two JV partners in phases across three years to match demand and utilization.
The investment in predominantly asset-backed, with advanced CNC capacity and certified processes enabling strong asset productivity and operating leverage. We are targeting $30 million revenue by year five, supported by 35% EBITDA margin and 20% PAT margin, consistent with the high precision nature of the business. The venture is expected to achieve operational breakdown by year three. From a capital efficiency standpoint, this JV enhances medium-term ROCE potential and diversifies our geographical and sectoral exposure.
Coming to outlook. With tariffs now addressed and demand gradually improving, Q4 FY ’26 is expected to show recovery with the deeper order pickup expected towards the end of the quarter. The order intake has already picked up, and our order position as of now is INR210 crores, highest ever in Unimech history. This helps in building higher revenue for this Q4 ’26. The operationalization of FTW facility will materially enhance deliveries and improve revenue realization.
Regarding revenue, we are expecting a decent business in the coming quarter, as Anil mentioned, and targeting to surpass the revenue of last year, INR240 crores. Overall year end margins level are expected to touch [Technical Issues] and PAT 25% level. While near-term recovery remains gradual, our medium-term outlook is significantly strengthened. We expect FY ’27 to make a return to structurally higher growth and improved financial performance. To conclude, temporary volatility does not alter long-term fundamentals or the scalability of Unimech’s business model.
So with that, I’ll hand over to Rajani for the strategic, greenfield, and inorganic growth updates. Thank you.
Rajanikanth Balaraman — Whole-time Director
Thank you, Ram. Good morning, everyone. Let me briefly update you on our strategic initiatives and inorganic growth progress. Our inorganic strategy continues to be disciplined and capability-led. We are evaluating a strong pipeline of precision manufacturing and advanced engineering opportunities across India, the Middle East, Europe, and the United States. Our filters remain consistent, technology strength, operating synergies, margin quality, cultural fit, and clear long-term value creation.
The focus remains on strategic fit and scalability rather than only size. A key development this quarter is the formation of our strategic joint venture in Saudi Arabia with Yusuf Bin Ahmed Kanoo to build an advanced precision machining and remanufacturing platform in Dammam. This gives us a locally anchored manufacturing base in a priority market aligned with localization and industrial development programs. The platform is being built in a phased manner and is designed to scale with customer qualifications and demand. Beyond near-term revenues, this JV is strategically important as a regional energy sector manufacturing hub and a foundation for future expansion.
Coming to Dheya Technologies, where we increased our stake last quarter to 30% from 16%. Progress continues to be encouraging, progressing towards early commercialization and scalability. Some key technical milestones that I want to call out, includes high-speed micro gas turbine demonstrations, achieving bench test for 65,000 rotations per minute for DET500, and continued advancement in hydrogen and propulsion programs, garnering interest from NMRL, gaining high functionality and durability for hydrogen anode blower. This positions us well towards certification and production.
The hydrogen anode blower and micro turbine platforms are seeing growing customer and defense sector interest. With qualification and testing underway and initial orders in place, these solutions are positioned as indigenous alternatives to imported systems. Our exclusive manufacturing arrangement with Dheya’s micro gas turbines and subsystem position us well to participate as these programs move into certified production. Overall, our inorganic agenda is advancing across strategic JVs, technology investment, and selective acquisition opportunities. We remain focused on disciplined execution and will keep the market updated as these initiatives translate into tangible milestones.
Operator, we can now open the floor for questions. Thank you.
Questions and Answers:
Operator
Thank you. [Operator Instructions] The first question comes fromthe line of Keyurkumar with Niveshaay. Please go ahead.
Keyurkumar Vadaliya
Hello, good morning.
Anil Kumar P
Yes.
Keyurkumar Vadaliya
Hello.
Anil Kumar P
Good morning.
Keyurkumar Vadaliya
Am I audible?
Anil Kumar P
Yes, yes.
Ramakrishna Kamojhala
So thanks for — thank you for the opportunity. My question is in regard to the order book. Right now, you have mentioned that INR210 crore of total order book. So excluding the nuclear one, can you tell us the split of INR142 crore order?
Anil Kumar P
Yes, Keval, rightly understood. So INR210 crore order book includes the nuclear order.
Keyurkumar Vadaliya
Yes.
Anil Kumar P
Which is INR68 crore.
Keyurkumar Vadaliya
Yes, yes, sure. Can you tell the split of INR142 crores remaining order book?
Anil Kumar P
So primarily, it includes aero — the tooling business. A small portion will be precision.
Keyurkumar Vadaliya
And on the — means like around the Q1, we have mentioned that we are already in discussion with the semiconductor space. So like at what stage right now we are and means — and how many quarter we expect those kind of results in our financials also.
Rajanikanth Balaraman
So Keval, this is Rajanikanth speaking. So as part of the new — as the semiconductor business, we are in the process of getting qualified on FAI and we do see 52 weeks of order visibility with a firm order of about three months. And what we’re doing is that we are adding more and more FAIs. As we speak, we are also qualifying additional FAIs, and we have conversations with our customer to do more. So from a quantum perspective, for the qualified ones, that is already qualified ones, we’re looking at about $0.5 million in the next year. But we are looking at adding more. But I mean, the way you should see this is that this basically gets us an entry into a high-volume manufacturing for a semiconductor market, and that basically opens door to this market.
Keyurkumar Vadaliya
Okay. And sir, like right now, I have seen our investor presentations. We have both different like precision and the aeor cooling. So like in future, are we focusing on the precision part majorly or the aeroi tooling like MRO side only?
Rajanikanth Balaraman
Good question. We are focusing on both. We continue to basically look at both aero tooling as well as the precision segment. As you see, there has been a lot of investment done on precision segment that we are also focusing on, including nuclear. So we will be focusing on all this and trying to capture more revenue.
Keyurkumar Vadaliya
Okay, and last question from my side, in Q1 or Q2, we have mentioned that after securing the nuclear order in FY ’26, we won’t be bidding for the further order. So is that same position apply right now or we will be bidding for the next upcoming also?
Anil Kumar P
Keval, so the bid will continue to happen. What we had tried to indicate is, after a substantial order intake, we’ll consider to take a pause for a moment to continue — because those orders, we’ll also have to fulfill by — through delivery. Once we have continued the scale-up and the production order goes through, we will continue to keep building. There is a good opportunity pipeline in the nuclear space that we are addressing and eyeing for, and we’ll continue to have that order bidding process throughout.
Rajanikanth Balaraman
So in summary, Keval, we will continue to look at bidding because I don’t believe that we’ve come to a point where we can’t digest. We are hungry for more.
Keyurkumar Vadaliya
Okay, sir. Thank you and all the best for the future.
Rajanikanth Balaraman
Thank you.
Operator
The next question comes from the line of Gautam with Leo Capital. Please go ahead.
Unidentified Participant
Good morning. Thank you for taking my question. My first question is on which — which are the other Indian manufacturers that would be — that we would be competing with and how large would they be in terms of revenue and product range in relative to us?
Rajanikanth Balaraman
Which segment are you talking about?
Unidentified Participant
For both the aero tooling and precision segment.
Rajanikanth Balaraman
Okay. From an aero tooling standpoint, we don’t believe there are much competitors in India. This is something that we’ve told from the beginning. We continue to work and compete with the Western companies. On precision, there are several manufacturers in the fray. We will continue to work with them. We’ve even worked on talking to them and looking at potential collaboration opportunities. On the nuclear side, there are a handful of people that some publicly listed, some not, and those we will continue to basically work with.
Unidentified Participant
So is there any name that you could give for these two or three segments that you have mentioned for the tooling?
Rajanikanth Balaraman
For the tooling, like I said, nobody in India.
Anil Kumar P
See, I’ll just add on to this. For tooling, there might be smaller players, but not that we can count of. In the nuclear space, though, as Mr. Rajani mentioned, we do see some players, if I should say MTAR can be one of those being the listed player. And then there are certain players in the unlisted space also. And precision segment, you see, it’s a wide industry, so there are various components that we’ll be addressing and manufacturing. So it can be a wide space to compete with.
Unidentified Participant
All right. And — okay, thank you. And the second question is on, are we the suppliers for Indian defense programs to aerospace industry, and how large is this business for us? And in that, who do we compete with?
Anil Kumar P
Keval, though that’s our aspiration to be into — sorry, Gautam, that’s our aspiration to be into. But as of now, we are not present, but we are continuing to explore all these opportunities.
Rajanikanth Balaraman
So Gautam, while the Indian defense is an entry point that we are basically looking at, and there are a few that we are actually working on. There is some Israeli defense firms that we work with as well. Currently, our defense offering is a small one, but we see there are multiple opportunities. We are looking at tenders and stuff, and we are slowly increasing position.
Unidentified Participant
Understood. Thank you so much.
Operator
Thank you. Ladies and gentlemen, you are requested to limit the questions to two per participant. The next question comes from the line of Aniket Madhwani with Steptrade Capital. Please go ahead.
Aniket Madhwani
Yes. Hi, sir. I’m audible?
Ramakrishna Kamojhala
Yes.
Aniket Madhwani
Yes. So I just want clarification on the outstanding order book. So am I right? Have you mentioned INR210 crores order book is the outstanding?
Rajanikanth Balaraman
Yes.
Aniket Madhwani
Okay. So as per your last guidance, you will be crossing around INR300 odd crores in FY ’26. So are you in line with the guidance, or is there any deviation in previous guidance?
Anil Kumar P
I’ll just give you that was an aspirational number that we have targeted. It’s always good to have aspirations, and we’ll continue to work towards it. This quarter, what you have seen is one of the best quarters in terms of order intake also, and where we are standing right now is a INR210 crore order book. We were talking about nuclear orders also to be incoming, and this is what we have started to receive. So it’s a good, meaningful traction that has been built over the period what we were talking about. And we have come to a good scale. Having said that, the target is to grow our order book to a substantially higher level. But we’ll see and keep the market informed as and when our order book grows and whatever order intakes comes in.
Rajanikanth Balaraman
So Aniket, I think your question was more of how — are we going to hit the forecast of INR300 crores. Is that your question?
Aniket Madhwani
Yes.
Rajanikanth Balaraman
Okay. So what we’ll need to remember is that the context that we basically called out, this forecast was a very different context compared to the context that we were living in this whole year, especially with the U.S. tariff. Now, while that has been lifted and we see more — we feel a lot more positive, we have another 45 days to go, and we don’t think that kind of a number is something that we will be able to do it. However, as Anil basically told you, we are looking at about INR90 crore to INR100 crore this quarter.
Aniket Madhwani
Okay. And what was the major reason? I mean, I can see here previously you have mentioned that you are expecting around INR100 crores to INR1,000 crores in Q3 and Q4. So till date, you have only received around INR200 odd crores of orders. So what challenges the company is facing to get the orders?
Anil Kumar P
Aniket. So there was an indication on how the bidding process has happened and to what contract that we had bid for. So while we indicated previously that we had bid for close to around INR800 crores worth of orders in the nuclear space, that was an indication that we have given, and we were optimistic on the fact that we will be able to qualify at least 20% to 30% of that order bid.
But as you are aware, the bidding process is in our hand, but the order qualification or the intake is not that we can call out always. And hence in that line, we have received some orders continuing to the fact that what we were trying to get into this space with. That is number one. Subsequently, as what Mr. Rajanikanth also mentioned, given this year has been challenging in terms of tariffs. So anything on the tooling side was challenging for quite part of the year, which has now been resolved.
And as we have been talking about the first 12 days of February itself has reflected in a good order inflow. With that thing in place, we are still seeing a INR200 crore order book, which is a decently placed order book as on now. And we’ll continue to build. We have some more time for this odd — for this year to end. We’ll continue to add up orders as and when we receive.
And to be precise and summarize this, there has been no further challenges that we think we’ll be witnessing. Tooling business will continue to see a strong traction. In the NPCL or the nuclear business, we’ll have to keep a patient view, and we’ll see and keep you informed as and when the orders comes through.
Aniket Madhwani
All right. All right. Sir, lastly, can I just bifurcate the business? I mean, I just want the bifurcation of your tooling business and other segments. So in terms of top line, I mean how much have you received from your tooling business? And going forward, how much it will be increasing?
Anil Kumar P
Okay. Just to give a bifurcation on both the businesses, for this nine month period, 77% was being contributed by the tooling. And this other part was coming from the precision component, which includes nuclear as well. In terms of order book bifurcation, as you see, INR210 crore stands off as of today. Out of which, INR68 crore is coming from nuclear. I should say INR130 crores, INR135 odd crores from the tooling business and balance, whatever is left, is coming from the precision business.
Aniket Madhwani
Okay, got it. And you will be maintaining your margin going forward, right, after the clarification on the…
Anil Kumar P
On gross margin levels, yes, we are confident to maintain. This year, you might see a dip on the EBITDA margins and the PAT. But going forward, next financial year onwards, you will see a healthy growth.
Aniket Madhwani
And the reason…
Rajanikanth Balaraman
It’s a function of the capacity utilization. As you know, there’s a lot more capacity that we basically deployed. And from a utilization standpoint, we are at around 50%. And as we increase capacity utilization, you will see the margin actually becoming better.
Aniket Madhwani
And when should we expect that to stable? I mean in the coming year, FY ’27?
Anil Kumar P
Yes, in the next year.
Aniket Madhwani
All right, in the next year. Got it. Yes, that’s it. Thank you.
Operator
Thank you. The next question comes from the line of Balasubramanian with Arihant Capital. Please go ahead.
Balasubramanian A
Good morning, sir. Thank you so much for the opportunities. Sir, earlier, we mentioned free trade warehouse zone operations are expected from Q4 FY ’26. I think, U.S. also have been reduced the tariff from 50% to 18%. So I’m trying to understand like what is the tax are, inverted duty chain benefit here compared to earlier around the logistics model. Earlier, we used to send Europe or Asia and then transfer the goods to U.S. destinations. If you could elaborate more on free trade zone side? Yes, that’s my first question.
Ramakrishna Kamojhala
Okay, Mr. Balasubramanian, yes. So free trade warehouse, as we mentioned, definitely, even post tariff also, this is a good strategy that will support companies like us who are dealing with the U.S. While — the strategy is like this, this free trade warehouse is going to be the logistics house for my customers who want to move kind of significant portion of their U.S. inventory, which is going to be consumed out of U.S., going to be kept in India. And from India, this is going to be shipped to various countries.
However, the consumption that is going to be — going to happen in U.S. has to be shipped from India to U.S. only which will definitely attract the kind of tariff. Of course, not 50%, now it is 18%. So from customer point of view, this logistic alignment will save them one, the kind of — even though it is a lower tariff at 18%, which they can save. Second thing duration wise, timeline wise, they can reduce the timelines. Third one, there could be potential logistics, freight cost saving also would be there.
So my top customers got convinced, and then they are kind of inclined to have this strategy in place. So free trade warehouse is — the buildup is started, it is well progressed now, almost on the verge of completion. We are waiting for no approval from the ministry as well as local government. So that is a kind of challenge as of now. But remaining all things under control.
Rajanikanth Balaraman
Just want to add on to what Ram said. This — in addition to the tooling business, we are seeing customers from the precision business also appreciating this free trade warehouse that we have, and that could potentially house all the FGs as we go. So we think that this is a very sound investment.
Balasubramanian A
Okay, sir. Sir, my last question. We did a capex of nearly INR56 crore in nine months. And the JV part, especially in Saudi JV, we had a commitment of $14.7 million. So this funding is expected through internal accruals or we are planning to take any debt or any other arrangements. And secondly, in U.S., we are targeting some JV especially in aerospace and defense. And if you could share what is the update on U.S. JV side. Thank you.
Ramakrishna Kamojhala
Coming to the Saudi investment JV. So while overall investment is going to be $30 million, 51% contribution comes from us. So we have a cash reserve of — a good amount is there, which is earmarked for investment in Greenfield as well as M&A. We are going to utilize from this fund. I don’t think at this stage, we need any kind of borrowings to fund this project. So we have — internal money is sufficient.
Coming to other joint ventures, what you mentioned. So we are — Okay, as a strategy, definitely, we wanted to have a setup beyond India. At Saudi, we started, and maybe probably in the U.S. or some other country, definitely it will happen, and discussions, and you know the plans are already there, and at the appropriate time, we definitely will announce to the market.
Balasubramanian A
Okay, sir, thank you.
Operator
Thank you. The next question comes from the line of Tahir [Indecipherable] with Golbest Fund. Please go ahead.
Unidentified Participant
Hello, sir.
Anil Kumar P
Hi.
Unidentified Participant
Good afternoon, sir. Thank you for the opportunity, sir. I have two, three questions. First, sir, I wanted to understand what is the role of the subsidiary, Innomech. because we are operating in the same segment and business model is also same. So what they are doing that their scale is much larger than us and they are growing much faster than us. If you can throw some light on that.
Ramakrishna Kamojhala
Right. So when — long ago, when we applied for Special Economic Zone approval land allotment, so we have clearly bifurcated export business from the mix of global — domestic and export. We called out the export business and formed a new entity to shoot for the SEZ requirement. And that’s the reason a new entity formed. And even as of now, our strategy is to remain focused on export business into this zone and domestic into the other entity. And this will continue forever.
Unidentified Participant
Okay.
Rajanikanth Balaraman
The reason you’re seeing the difference in the numbers is because we are a 95% export business, and you will see that much of this revenue actually flows into Innomech, which is a subsidiary.
Unidentified Participant
Okay. Second question sir, on the — if you can explain on the nuclear segment. Like, what do we do in the nuclear segment? And we have said that we have bidded — in quarter two, we have bidded around INR800 cr for the nuclear projects — nuclear segment. So if you can give us a winning rate or anything on that front.
Ramakrishna Kamojhala
Right. So in nuclear, we have been into nuclear business last three to 3.5 years. So we manufacture electromechanical subsystems for nuclear reactors. Largely, we are qualified for around 10 kind of various subsystems to be contracted. So we have been participating in various tenders since last eight months. Most of the things like — we have some — some, we won INR68 crores as we mentioned, and some more are yet to open.
And wherever we are not successful, mainly, of course, government, the L1 and L2 concepts are there, which is not in our control. So however, Unimech has always the philosophy and margins, certain threshold margin below we cannot quote. So wherever, whichever the projects are kind of high-margin yield or decent margin yield, such projects only we will quote. Or wherever we quote, we want it to make decent profits. So even if it is B, we are not able to win, that’s okay. But the TCC is like good margin is always our DNA.
Unidentified Participant
We have a total land bank of around 2,40,000 square feet area across four units. So if you can throw some light. Where do we see capacity expansion going forward? Or this plant will be sufficient for how much revenue generation? And when we see the capacity level to reach around 70%, 80%?
Anil Kumar P
Sorry, could you repeat the question, please? We could not clear — hear it clearly.
Unidentified Participant
Sorry, I can — I have a question on the manufacturing side, manufacturing plant capacity side. Like what is the revenue capacity to this current land which we have of around 2,40,000 square feet area. And when do you see capacity utilization, which is 70%, 80% kind of?
Anil Kumar P
See the right way to look at is not the facility size, but how much of the asset turnover that we can generate. So while we understand that there has been lower utilization of the existing machinery setup. As on date, if you see the fixed asset investment, it is close to over INR210 crores. We — and the current asset turns is 1.4 times. And this is because of a primary reason that this year has not been — this year’s performance has not been to what we had expected because of tariffs.
Going ahead, we had taken a target to increase this asset turns to over 3 times. Now, when we move that up with a — and further investment is also anticipated, you can understand close to around INR40 crores, INR50 crores investment will also be added up to the existing gross block. And with that, the target will be to have a 3 times asset turns.
Unidentified Participant
Okay, sir, one last question.
Operator
Mr. Tahir, I’m sorry to interrupt. I would request you to please come back in the queue for further questions. Thank you. The next question comes from the line of Nisarg Desai with RRR Investments. Please go ahead.
Nisarg Desai
Yes. Hi, sir. Good morning. So I have two questions. My first question is that we produce more than around 4,500 plus SKUs. So what impact could that have — could this many SKUs have in terms of our scalability?
Rajanikanth Balaraman
So we basically built systems in place, which is in a digital nature that, from a scalability, we’re not really concerned. We’ve actually increased capacity, we’ve built digital systems, we want to scale. We don’t think the number of SKUs will affect our scalability in any kind of negative way. In fact, it’s going to be positive. That way, my utilization gets better, and we are looking at increasing this SKU number.
Nisarg Desai
Okay, got it, sir. Sir,, secondly, we are actively diversifying into energy sector, even semiconductor as well. So what exactly is that thought process behind it? Because the aerospace opportunity in front of us is extremely massive. So this diversification, like how is it a better idea rather than trying to migrate upwards of the value in terms of the aerospace sector itself?
Rajanikanth Balaraman
So sorry, what’s your name?
Nisarg Desai
Nisarg.
Rajanikanth Balaraman
Nisarg, we’ve been through COVID, we’ve been through tariff regime, and one thing that has taught us is that while we will basically push the throttle in the current industry, it has also taught us that diversification is the right strategy, whether it is industry, geography. So it is basically that thought process. And if you really look at it from a capability lens, all these industries are all fungible, and we are only going after the ones where we have the capability, and we think that there is actually growth.
I mean, you’re seeing that, there is a huge AI push where semiconductor is basically the shovel for the gold rush. And similarly, you’re seeing that in energy as well, right? So we don’t want to miss out. Having said that, it doesn’t mean that we are diluting our focus on aerospace. The aerospace focus continues, and we are actually working with both Tier 1s and OEMs and should hear something good down the quarters.
Nisarg Desai
Got it, sir. Thank you so much. All the very best.
Rajanikanth Balaraman
Thank you.
Operator
Thank you. The next question comes from the line of Darshit Shah with Nirvana Capital. Please go ahead.
Darshit Shah
Yes. Sir, so my question pertains to the tooling space. I mean currently, almost around 70% plus of revenues come from tooling, predominantly from export size — export side. And we hear a lot of tailwind happening in the Indian domestic aerospace sector. I mean, there are a lot of new programs coming up, new aircrafts going to be manufactured here also. The — after FDAs lot of sourcing is going to be increased from domestic market. And since you said there are hardly any domestic players present in India. So how do you view this opportunity for your domestic segment, aero tooling if you…?
Ramakrishna Kamojhala
Okay. So your question is relating to Unimech focusing on domestic side each — sector wise. First sector, aero tooling, the old business pertaining to PDMA. So aero tooling, larger opportunities out of India only. While off-late India opportunity started in terms of the MRO sector, it started. So such opportunities definitely are tapping our door, and we are participating there. And going forward, when Indian MRO sector grows, definitely this is going to be a positive news for Unimech. That’s the first thing.
Second thing, with regard to precision components segment in — for domestic business, while most of the OEM is coming from overseas, the component side, system side, the defense opportunity still is something untapped. We have not seen the opportunity. This is something we started focusing on that, and if we find a proper entry into defense domestic, this is definitely is going to add a lot — give us bigger opportunity.
And other nuclear side, the energy side. Energy side, our focus is mainly into nuclear, especially nuclear energy, especially only into domestic side, and overseas presence is yet to start. And other energy opportunities, which is oil and gas side, is as of now Saudi focus is there. Indian side, we haven’t find any opportunity. So there is a mix of kind of domestic and — exports and domestic. Domestic tractions, we started seeing it at this stage, and the time passes like we might find a better opportunity in this domestic as well as apart from the overseas side. So yes, definitely if it comes, it’s going to be good news for us.
Darshit Shah
Sure. And — acutally if you can — you said there is more opportunity in the export side, especially of the legacy business that’s aerospace tooling. So sir, can you tell us what’s the kind of market opportunity, both domestically and in exports for this segment? I mean the market size for us to tap into? And secondly, given that we are more — I mean over the period, we’ll more focus towards defense domestic business as well as MRO business being picked up in India, and also, would the revenue mix kind of change from what we are currently at, around 75% export to domestic. If you can highlight both these questions.
Ramakrishna Kamojhala
Good question. So the aero tooling market opportunities, kind of $2 billion, $2.5 billion kind of market share, and which is growing significantly over the year as aero industry is picking up at a global level, adding more field and engine programs. While that side of the segment has a kind of decent growth, and which is a niche sector and especially, tooling and Unimech focus — a dedicated focus will continue.
But in addition to that now, as we have entered into precision component segment which is a higher market size which is more than $800 billion kind of market size. So it is kind of segment which we have recently entered and having bigger opportunity. So — which is a kind of that — that’s how I think slowly kind of new vertical is added and entering into the higher market segment side. In — with regard to energy side, I think energy is also equally bigger opportunity. So kind of more than $500 billion, $600 billion kind of opportunity. So equally it gives good prospects for us to, when we enter there.
Darshit Shah
Yes. And on the revenue mix over the next three to four years, it will start changing?
Ramakrishna Kamojhala
So with regard to — yes, sorry. So with regard to revenue mix, eventually the good part is, we are not sticking to one segment, and we are slightly adding more segment, more vertical. And also, slightly diversification is also happening. The revenue mix has to change, and for a good cause. And over the three years, the 77% aero tooling will become 65%, and 35% will become precision component in the next three years or maybe 60%-40% also can happen.
Darshit Shah
Okay, and the export domestic, would that also change, sir?
Ramakrishna Kamojhala
Yes. As of now, 95% export. Slowly, domestic also will get added. And we are kind of guessing 80%-20% ratio in three years’ time.
Darshit Shah
Sure, sir. Thank you so much.
Ramakrishna Kamojhala
Yes.
Operator
Thank you. Ladies and gentlemen, this will be our last question. It’s from the line of Ayush Bhatnagar, an individual investor. Please go ahead.
Unidentified Participant
Hello. Thank you so much for giving me this opportunity. So my question is in regards to the ratio in which we are doing exports. So like what do we expect in future in terms of the percentage of exports going to U.S. and to EU nations?
Anil Kumar P
We started our business being an export-oriented unit and that will continue to be a predominant part. As mentioned by Mr. Ram in his previous statement, going forward next year, you might see 80% to still be as export business for us, and the balance 20% will be from the domestic.
Unidentified Participant
Okay. And in regards to that, how much percentage are we expecting from U.S. exports and from other countries?
Anil Kumar P
See, the target is to reduce the geographical exposure. We are predominant with us currently. But going forward, you will see a substantial reduction. It cannot be very firmly confirmed what will be the number. So as and when the business grows, you will see a reduction in the U.S. market exposure.
Unidentified Participant
Okay. Got it.
Rajanikanth Balaraman
The guideline is to ensure that there is actually a balance and harmony. While having said that, if there’s actually a business coming from — more business coming from U.S., we are not going to say no to.
Unidentified Participant
Okay, got it. Thank you. And all the best for the future.
Anil Kumar P
Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for their closing comments.
Anil Kumar P
Thank you, Operator. Thank you, everyone, for your questions and your continued time and engagement with us. To summarize, while this quarter reflected the impact of temporary external events, the situation has already begun to improve meaningfully, with the recent tariff reduction and better customer sentiment. Our order book remains strong, our strategic mitigants such as the FTWZ are nearing operational readiness, and our diversification across precision components, nuclear, and international markets is progressing steadily.
What remains unchanged is our core strength with deep customer integration, high technical capability, and long qualification-driven relationships, which continue to give us confidence in the durability of the business model. We remain focused on discipline execution in the coming quarter, converting our ready inventory and order pipeline into revenues and building a stronger and more resilient Unimech for the long-term.
Thank you, once again, for your continued trust and support. We look forward to updating you in the next — again in the next quarter. Thank you.
Operator
[Operator Closing Remarks]