Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Unimech Aerospace and Manufacturing Ltd (NSE: UNIMECH) Q4 2026 Earnings Call dated Apr. 28, 2026
Corporate Participants:
Anil Kumar P — Chairman and Managing Director
Rajanikanth Balaraman — Whole-time Director
Ramakrishna Kamojhala — Whole-time Director and Chief Financial Officer
Analysts:
Manish Velecha — Analyst
Unidentified Participant
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, Good day and welcome to Unimec Aerospace and Manufacturing Limited Acquisition Update Conference call hosted by Anandrati Sharon Stockbrokers limited As a reminder, all participant line will be in the listen only mode and there will be an opportunity for you to ask question after the presentation. Conclude. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchdown phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Manish Velecha from Anandrati. Thank you. And over to you sir.
Manish Velecha — Analyst
Thank you. Good morning everyone. Welcome you all to the Lumimex Aerospace and Manufacturing Limited Acquisition Update conference. We have with us from the management, Mr. Anil Kumar Putam, Chairman and Managing Director, Mr. Rajini Kam Balaraman, Full Time Director, Mr. Ram Krishna, Full Time Director, Mr. Maniputan, Old Time Director, Mr. Pritam, Full Time Director and Mr. Akash Deswan AGN Investor Relations. I would now like to hand over the call to Mr. Anil Kumar Puttam for his opening comments.
Over to you Anil.
Anil Kumar P — Chairman and Managing Director
Thank you Manish. Good morning everyone and thank you for joining us today. We are connecting slightly ahead of our regular earnings discussion to share an important and positive development for UniMed, one that meaningfully strengthens our business and long term growth platform. This marks a significant milestone in UNIMEC Aerospace and Manufacturing Limited journey. We are pleased to announce the acquisition of Mobile Bellows, a highly specialized technology driven manufacturer of metallic bellows, flexible tubing components and position engineered assemblies.
This is a strategic capability led acquisition that aligns closely with our long term vision of building competitive high value position engineering platform. As you are aware from our previous earnings interactions, our approach to inorganic growth has always been purpose driven. We remain focused on disciplined capital allocation, strengthening our core manufacturing capabilities, enhancing relevance with global OEM customers and identifying high margin opportunities. From this perspective, the acquisition of hubal bellows fits strongly within our stated framework.
Let me share a few insights into the business. Cobalt Bellows brings well established and complementary capabilities across metal forming, hydroforming, precision pipe fabrication, advanced welding processes and automated testing validation systems. These capabilities enable UNIMEC to expand meaningfully beyond precision machined components into engineered assemblies and subsystems representing a natural and important next phase in our evolution. The business operates out of modern 200,000 square foot manufacturing facility in addition to a 20,000 square foot of warehouse in the Vishakh Patnam.
Supported by a strong in house design and high quality engineering and manufacturing infrastructure, the firm is ahead of a curve in technology using robotics and automation to ensure repeatable precision. Its extensive quality control process including CMM and Shadow graph testing guarantee Top quality Fair product quality Hobel has built a long standing relationship with marquee global OEMs with nearly 90% of its revenues derived from exports catering to markets including uk, United States, Singapore and China.
They are one stop shop product portfolio offering a broad and versatile product mix in metallic bellows, exhaust manifolds and tubular assemblies. Their bellows offerings ranges from 2 inches to 16 inches that is 500 gram to 330 kg way designed for engines spanning man to 9000 bhp across diverse industries. For the year ended 31st March 2026, Mobile Bellows reported approximately rupees 129 crore in revenue along with EBITDA margins exceeding 50%. This is debt free business acquisition is this debt free business acquisition is a margin accretive with strong annual cash generation enhancing the overall quality of UDIMEX earnings profile pre acquisition business used to generate roce of over 50%.
Equally important if not more than any financials is the culture and DNA of the business. Cobalt Bellows has been built on a strong foundation of quality, engineering excellence and continuous innovation supported by an experienced professional team. These attributes aligns extremely well with InnoMic’s operating philosophy and long term ambitions. From a strategic perspective, this acquisition enables us to increase valid share with existing customers through a broader and more integrated offering and expand our presence in industrial, locomotive and power sectors Strengthen our positioning in aerospace, defense, nuclear and other high entry barrier segments Accelerate time to market by gaining access to capabilities that would otherwise take years to build organically and enhance our financial profile through a high margin cash generated business aligned with our return focused capital allocation approach.
We see meaningful synergy potential going forward across cross selling capability integration, value chain expansion and operational efficiencies. Collectively this strengthens Unimex positioning as a trusted global one stop engineering and manufacturing partner for complex high performing engineering solutions. Before I close let me briefly touch upon our organic business performance. Our core Unimix business has shown a clear recovery with the demand normalizing after relatively muted last year.
The company has seen an improvement in business momentum during a quarter 4 FY26 supported by better demand conditions and healthy order book. We remain focused on disciplined execution and will provide comprehensive update on the financial performance post our Q4 results. Additionally, an update on FTWZ facility which assumes strategic importance. The facility is operation ready and has now received approvals from all regulatory authorities with only customs clearance spending which we expect to be completed by the end of May While there has been some delay compared to our earlier timelines due to multiple layers of regulatory approvals, this milestone significantly strengthens our ability to serve customers more efficiently.
The FTWZ will play a key role in mitigating the impact of cross border tariffs, improving supply chain flexibility and supporting more consistent revenue momentum going forward. Parallel, we continue to engage with several potential customers and are actively working towards closing meaningful contracts over the near and to medium term. In summary, this acquisition together with our continued organic execution reinforces our confidence in UNIMEX growth trajectory and long term value creation potential.
Thank you for your continued trust and support. I will now ask the operator to open the floor for Q and A and will respect all participants to limit their questions towards this acquisition.
Questions and Answers:
Operator
Thank you so much sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are request to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assemble. A first question come from the line of Manish Valicha from Anandrati. Please go ahead.
Manish Velecha
Yeah hi sir. Thank you so much. I just quickly wanted to understand certain basic details on the acquisition. The firstly was from the strategic angle perspective. So you know from this looks like a more capability LED acquisition. So how does it fit well into the overall UNIMEX long term strategy and you know where does it fill in the gap for us? Great. So Manish, so this acquisition fits very well within what we have been trying to build at unimic over the long term our focus has always been on becoming a high value precision engineering platform and this acquisition particularly the hobo brings in a set of capabilities like metal forming, tube bending, sheet metal fabrication and advanced welding along with strong automated testing systems.
So these were areas we had already identified as important and were planning to build ourselves over time. So what this acquisition really does is this is fast tracking that now gen it not only adds new capabilities but also brings in strong relationship with global OEMs. More importantly, it helps us move beyond just supplying precision components to offering you know more assemblies and subsystem level thereby enabling us to become precision engine platform which make us more relevant to our customers.
So interestingly even while we were evaluating this acquisition Manish so some of these capabilities were already being asked for by our aerospace customer for larger and high value work packages. So instead of taking 18 to 24 months to build this organically. We now get immediate access to those opportunities. So overall this is both capability upgrade and a way to accelerate our growth. And on top of that, as you all know, the business itself has a strong financial track record. Oval has strong financial return.
So it’s also high quality
Unidentified Participant
And margin creative additions for us in terms of top line as well.
Manish Velecha
Got it, Got it sir. And from the synergies perspective, you know, how do we see synergies in from the Bellows business in the aerospace or nuclear facilities that we have nuclear business or any high value segments that we operate in?
Anil Kumar P
Yeah, yeah, there are a lot of synergies. You know, you notice that now the most meaningful, meaningful synergies are on the
Manish Velecha
Revenue side, you know, rather than caution in particular. So in the near term the synergies are cross selling, you know, below which is hobal, you know, the main product Bellows into nuclear and industrial segment where we are and leveraging Hubble’s presence in marine and navel and naval ecosystems. However, in the medium to long term using Oval’s capability to deepen engagement with our aerospace customers as we have started discussing with our existing set of customers with such capability offering.
Further our intent is to establish an engineering platform who are offering not only components but to advance into large assemblies and subsystem as I mentioned. So this helps, you know in, in establishing such platform not to mention revenue and margin, you know, also to follow by increasing share of beloved material customer over time. This acquisition position us to enter high value segment such as aerospace grade systems, nuclear applications and semiconductor energy system. So the real value lies in capability integration and the revenue expansion rather than immediate cost saving, you know.
So we do see, you know, greater synergy, you know, in, in this acquisition. Got it. A quick question on these financials. Basically so you mentioned that the EBITDA margins are more than 50%. Is that being consistent over a few years for that company? And what are the growth opportunities? You know I’m trying to understand what is the current gross block versus what is the revenue that we are doing tomorrow. Yeah. So Manish, I think here the important thing is yes, the gross margin and the EBITDA margins are, you know, as Anil also mentioned, more than 50% here.
One important thing is the margins are a reflection of, you know, niche, mission critical nature of the product and the company’s positioning as a high quality supplier, you know at present to global OEMs. So the business benefits from high entry barriers due to long term, long qualifications, especially strong pricing power driven by quality rather than Here the cost, you know, deep integration with OEM supply chain is also happening. So given these factors, we believe, you know, margins in the range of 50%, you know, are sustainable over the medium term.
Additionally, with the more integrated and subsystem level high precision engineering product offering, we are confident to maintain operating business at a kind of similar margin level. Nevertheless, to mention we have normalized for 1 of items, non recurring items as that that was featured of a natural deliverance process. And even post normalization margins remain strong and representative of sustainable operating performance. So. Yeah, anything you want you want to add?
Rajanikanth Balaraman
Manish, did you ask question on growth or growth? Yes, actually both
Manish Velecha
Margins and growth going forward. Yeah. Gaurav, do you want to add?
Ramakrishna Kamojhala
Sure.
Rajanikanth Balaraman
So we see a clear pathway to scale the business assuming conservative growth rate of 15 to 17% over the next three to four years. This growth will be driven by combination of steady organic momentum and synergy led opportunities. So the key drivers include a strong and growing addressable market for metallic billers estimated at around 2.6 billion with expected annual growth of 6% proving ample headroom to expand both volumes and product offerings. There is obviously continuous growth from existing OEMs of customers supported by new engine platforms as well as repeat orders.
We are also looking at addition of new OEM customers, particularly in the locomotive segment where similar engine platforms are used. So we see a rising global demand for high power and emission efficient power generation systems driven by increasing deployment of data centers and advancements in AI. Also there’s expansion into adjacent segments such as automotive exhaustive systems and fabricated assemblies. Obviously we are also looking at cross selling opportunities within the Unimex existing customer base enabling larger and higher value product offerings.
In addition, we have a meaningful operating lever. Current capacity utilization is in the 50 to 60% range which provides sufficient headroom to support growth without requiring additional capex in the near term.
Manish Velecha
Got it. Got it sir. Perfect. That’s it from my chat. Thank you so much.
Operator
Thank you. Our next question comes from the line of CA Gravit Goel from SIDD in Alpha. Please go ahead.
Manish Velecha
Hello, Anna Audible.
Operator
Yes, you are.
Manish Velecha
So first question is on is on the customer side like what percentage of target company’s revenue currently coming from the aerospace?
Rajanikanth Balaraman
Hi. So currently aerospace is not a representative set of customers that Hubble Bellows operates with. Currently the focus has been on the locomotive and the power engine side of the business.
Ramakrishna Kamojhala
I just want to add something more. Yeah, so this acquisition is primarily a capability led what it will help us advance into. It will bring us critical manufacturing Capabilities like metal forming, sheet metal fabrication and tube bending. And all these are in high demand among our aerospace customers, but yet untapped by us still. But this gives us a clear pathway to move into such segments in as we also discussed in our medium term growth plan, we do want to engage into such customers. So this is one space that we are looking parallel.
We are also looking at expanding into nuclear semiconductor space as well. So there are visible synergies that we have identified while evaluating this acquisition. And during the medium term you will see some synergies or some advancements into these areas also.
Manish Velecha
Okay. And you mentioned your customers were already asking for these capabilities. So are there any early pipeline opportunities you can speak to?
Rajanikanth Balaraman
So we started having discussion with some of our aerospace semiconductor customers where a similar capability is, you know, they’ve been talking about and there has been some initial interest. So you know, typically these kind of customers take some time to, you know, qualify onboard and such. And currently the company is also not as 9100 certified. So the first task is going to be getting into that certification followed by qualification and such.
Manish Velecha
Okay. And looking at the growth of this target company, there is a moderate 10% CAGR as a standalone entity. Right. So given that you are paying approximately three, three and a half revenue for this business, so can you help us to understand like means going ahead? Also I think you are speaking about 15 to 17 growth only. So which is this is looking like very conservative on this, such a small, small base. So what is your internal plan on that? Like how the revenue will shape up? Why are we not aggressive in the terms of growth?
Ramakrishna Kamojhala
See, we have done this acquisition and realize that this is a very niche product that is being available in the market. The intent is not only to grow, the intent is also to sustain the margins because the business has been doing very well. The good part is it’s a debt free company and it has a huge cash surplus that it continues to generate and parallel the intent for the first 12 months or the short term, I should say will always be a slow moving. But eventually when the synergies are going to catch up.
So over a medium term you will see the growth coming up. But as of now, to build in some conservatism, we have factored in a 15 to a 17% growth.
Rajanikanth Balaraman
So in addition, I think you asked a question on our valuation being about 3.5 times on the revenue. This is more of a, you know, while I understand this is from a revenue standpoint, if you look at the asset, it is a very high Margin EBITDA and typically these are done based on the EBITDA and from an EBITDA margin multiple perspective this is a, you know, fairly good deal at seven or six to seven times ebitda. So this has been a very, very good deal.
Manish Velecha
Got it. And so can you help us? Sorry to interrupt you
Operator
Sir. Just one last question. So we have a lot of participants. Okay, fine, thank you. Thank you. Our next question come from the line of Aman Soni from Invest Analytic Advisory llp. Please go ahead.
Manish Velecha
Hello.
Ramakrishna Kamojhala
Yes
Operator
Aman, please
Ramakrishna Kamojhala
Go ahead.
Manish Velecha
Can you help us to understand on the people retention strategy for the target companies leadership and technical workforce?
Ramakrishna Kamojhala
Okay, so while we were discussing this evaluation, we also addressed this issue. Now considering most of the employees in the senior level management along with the other CADRs also have been a very long standing one and we continue to ensure that these people will be there in the organization. What we are trying to do is benchmark their salary or their compensation as per industry standards. So that is the first approach that we are going to follow parallel. What we will also see as in Unimex there is an ESOP policy.
We will also try to look and build in such compensation factors also over a medium term as and when we see the growth capturing in the business parallel there are strong set of incentives also that there exists in the business already and we’ll continue to use those incentive structures and plans to ensure retention stays.
Manish Velecha
And what kind of course optimization opportunities are you looking at?
Ramakrishna Kamojhala
Sorry, could you come back please?
Manish Velecha
What kind of course optimization opportunities are you looking at? Consolidation Uni Mechanical. Well,
Ramakrishna Kamojhala
So Aman, so if I could understand this correctly, if you are asking about quote optimization from a project standpoint or is it. No,
Rajanikanth Balaraman
He’s asking about the staff. Are you talking about. Sorry, what optimization are you talking about? Aman?
Anil Kumar P
Fourth Coast. Coast, sir.
Rajanikanth Balaraman
Cost. Okay, Cost optimization.
Ramakrishna Kamojhala
Okay, so from the cost optimization see there, this is fairly a business which has been a high margin business. We are not seeing challenges to reduce cost very aggressively but there will be opportunities and areas where we’ll continue to evaluate and identify over the short term period. And in case if there are findings, we’ll continue to bring down certain costs. But as of now we don’t see much challenging areas during our diligence process we have realized any other expenses that was not required to be done and we have eliminated all those.
Manish Velecha
I just trying to understand from the staff consolidation point of view like across Unimag and Hobel, are you looking for any staff consolidation enhanced optimization opportunity?
Ramakrishna Kamojhala
Agree, I understand. So See this business we will be trying to run as a separate as you, as you understand this is operating out of Vizag sez. So in terms of staff cost optimization though it will not be something very meaningful at the short term. But parallel as we build in capabilities and with advancements of automations coming in, we’ll look into bringing more optimization in place
Rajanikanth Balaraman
Also. I mean cost optimization is not a number one goal for us. Our number one goal is to actually expand and build a larger revenue. That is our number one goal because we feel like there is a lot more business that Hubble can actually take in. Considering Unimec has its own customers and customer base across industries and Oval also has few of the other green shoots that we are actually building on, our focus is going to be largely to increase. Obviously there’s robotics and all of that and it’s a fairly optimized business already.
So we are going to be more focusing on revenue expansion.
Manish Velecha
Understood. And so just one last question, please rejoin
Operator
The question queue for more questions. Thank you ladies and gentlemen. In order to ensure that the management will be able to address all the question from the participant, we request you to kindly limit your question to two questions per participant. If you have a follow up question, please rejoin the queue. Our next question comes from the line of Kamlish Bagmar from Lotus Asset Managers. Please go ahead.
Anil Kumar P
Yeah, thanks for the opportunity. First question, with regard to the key clienteles, so can you share like what is the client concentration of the top five clients and who are the key customers there? And secondly on the working capital side,
Ramakrishna Kamojhala
So on the clientele side I will say that the customer base though it’s globally diversified across UK, US, Singapore and China. But there are two key OEMs or the OEM groups who contribute close to around 93% of the revenue. But you will also have to understand this exposure is distributed across multiple entities operating in different geographies and has endu segments which such as power generation, automotive engines and other industrial systems also as well as well as locomotive engines. So now important thing here to understand is all the procurement units have a independent function with a separate supply chain.
Though on an OEM level you might look at it as a customer concentration but it has been fairly diversified spanning across 10 to 12 different geographies across the spaces. Speaking about the working capital, I should say the business has fair bit of working capital that we have retained close to around the 60 crore, roughly around a 60 crore worth of working capital that is there sufficient enough to run the business comfortably parallel every month. What we See there is enough cash generation also keeps that keeps happening in the business and that keeps us very comfortably placed.
Anil Kumar P
Okay, so just like say surprised to see that they are selling the asset at roughly around 7 odd times EBITDA where like say if you see all other peers like so that companies are trading at roughly around 25 to 30 EBITDA on the various other companies like CPCR peers as well even in our case. So what is the reason like you can say that it is on their own part that why they are selling but what could be the like say likely reason that they are exiting at seven times when they have stabilized their operations they have got the customer acquisitions.
So what is the reason for them to sell at these values seven times?
Ramakrishna Kamojhala
I do understand your concern. So this has been one of the thoughtful areas that we had carefully looked into and after multiple deliberations at our board’s end this is how came the understanding that we have realized and focused upon is there has not been any succession plan in the business. The owner or the erstwhile promoter had two daughters who are all settled abroad and they had no intent of coming down to India and take care of the businesses. And the owner as well has crossed the retirement age and he wants to take an exit and give it into an able hands which he found Unimec as a more suitable player to run this business.
And this is how we also came across this opportunity and realized that this will be a capability acquisition which we will want to acquire and then drive further business thereon.
Anil Kumar P
Okay. And lastly sir, 450 crore would be the EV which we will be paying and there will not be any further need of capex.
Ramakrishna Kamojhala
So yes this is the upfront cash but I should say in a very short term span we will recoup some part and there is only maintenance driven CAPEX that is required. You will not see a very meaningful CAPEX getting added. So
Rajanikanth Balaraman
Kamlesh, one of the things has been that you know there’s been a lot of machinery addition recently. For example there’s been a welding and automation system, fanuc robotic building systems, seam welding machines, weld seamer, big welding power source, automatic underwater leak test machine, low balance electric oven, automotive painting booth, heated electric airless, prayer, air cooled rotary screw compressor, laser, full combo, 3D printer, hand pellet truck. So there’s a lot of investment that is going on as recent as you know this, you know the last financial year, some of this is yet to actually come in.
We feel there is enough and good capex that has been installed with Modern technology that, you know, in the near term we don’t feel that’s going to be any CAPEX need unless there’s a maintenance kind of.
Anil Kumar P
Got it. Thanks a lot sir and best of luck sir.
Operator
Thank you. Our next question comes from the line of Ravtish from Columbus Capital. Please go ahead.
Manish Velecha
First of all, congratulations on the acquisition. It seems like a pretty good one. First question for Anilji, sir, you. I mean I’ve gone through a bit of the export data here and it seems like Cummins is fairly large and I just want to understand are we supplying the genset programs which are feeding into hyperscaler capex? So are we supplying into the QSK95 genset which is getting deployed in a pretty big way in the us? That’s number one. And number two, I also see that it’s the same HS codes that Hobble supplies under that basically is used for nuclear equipment.
So does this, is this Hobble, does this get us into the reactor island? I’m guessing that there’s an expansion joint somewhere in the coolant system which requires similar capabilities. So does this get us there? Do we have the NPCIL certification qualification for that? Or can Unimax apply through their own qualification? Thank you.
Ramakrishna Kamojhala
So Ravitage, let me answer this question on behalf of Mr. Anil I will say though what you have rightly read and understood that QSK95 platform is something which OBEL is supplying towards. So under the two OEMs that we have that is one of the end requirement which Bellows are being utilized to parallel. Speaking about your read on HSN as well is correct. I. I had also run some parallel checks and we have also realized that it’s a direct synergy though NPCL is what we are working towards. We don’t have a specific certification as of now.
We’ll have to work towards it but that will take some time and help us to collaborate and bring a larger assembly offering towards the nuclear reactor. It will be, I can put this as in it will be an umbrella or a sphere of components that we can supply under the new domestic nuclear reactor space. That is where I can lead you to for this moment, parallel. These are energies that we have also looked into and we’ll be aggressively working towards it.
Manish Velecha
No, I mean very specifically. Right. I mean I’m getting that currently as we supply electromechanical subsystems, I mean they’re not really that relevant inside the reactor island, right? I mean they’re not exactly class one nuclear components. But does this sort of open the Floodgates for that very. I mean expansion joints are necessary, right? I mean which connect the reactor vessel to the steam generators and that’s the exact product that Hubble is selling. So have you worked on that? Have you thought around that or I mean what’s the thought process?
Ramakrishna Kamojhala
Yeah, as I mentioned, so there is a thought process around it. There are tubular assemblies that we want to and intend to supply to npcl but for that we will need certifications. In our previous interactions we have been talking about certain subsystems or components that we have already pre qualified with NPCL under which these components do not fall. We will have to again run a fresh qualification with the NPCI team and only then we’ll be able to give a clear idea how this can happen. But obviously there’s a demand.
What we have also realized and Understood,
Manish Velecha
Understood. And just one quick one final take, right? I mean if Cummins is like so large in the overall revenue like whatever it’s 70, 80% and you know Cummins itself is growing gangbusters because of the hyperscaler Capex data center. Capex, I mean why are we still guiding for like 50 only? I mean when it’s a clear one one growth trajectory
Ramakrishna Kamojhala
Though. I do agree but I will not be very aggressive in answering this part. We will have to take a cautious stand though on the outside it looks like it’s a very heavy demand industry as of now. But let us get into those nitty gritties and then we’ll be able to address this question very specifically in the future interactions. Got it. Thank you. Thank you.
Operator
Thank you. Our next question comes from the line of Jay Johan from 3 Nitra Asset Managers. Please go ahead.
Manish Velecha
Thank you for the opportunity. Most of the questions have been answered. I just have one question there. Could you help us understand like how the consideration is going to a seller? Like I just wanted to understand what percentage upfront cash and on the 55 year loan component should we interpret this as a financing raised by the acquiring entities from the transaction or what exactly it is. Also I wanted more clarity on the CCD structure like what will be the, you know, conversion mechanism timeline, any visibility on that?
Ramakrishna Kamojhala
So talking about the deal, this has been an all cash deal. If you have read the structure. Well it’s both Unimec and Innomic has contributed. Unimec has taken up, has built a subsidiary company which has acquired the overall Hobbell Bellows operating business. This 450crore. Though we have retained some portion as part of our holdback which generally accrues in such Transactions and we have followed a very similar structure. To speak about the CCD structure we had kept this open. It’s a convertible debenture with I will say we have kept the timelines pretty open.
As and when we see benefits accruing and we see an intent to convert these debentures to a favorable equity structure then we’ll look to do that. But as of now in the near term I will say there is no such intent. Also parallel the interest rate. It’s very, I should say negligible. So that is nothing much of an issue.
Manish Velecha
Is there a specific timeline or you know, do you have any sort of performance linked conversion Mechanism for the CGD’s and will be you know
Ramakrishna Kamojhala
The CCD will it result in dilution of the listed entity level within the subsidiary structure?
Manish Velecha
I think. Let me again highlight this. This acquisition is again it’s a cash delay. The CCD structure is between holding and subsidy company mechanism. Okay. Where you know the holding has funded no subsidy company to acquire that, you know. But it is ultimate owner has got only full cash. Okay. Except 25, you know the 10% hold back, you know, you know which is for one year. But for all practical purpose investors need to understand, you know that this is a cash deal and the CCD structure or loan structure is between holding and subsidy company.
That is for you know the transaction between, you know, parent and subsid but not to deal with, you know, the owner, the seller.
Unidentified Participant
Understood. Thank you.
Operator
Thank you. Our next question comes from the line of Prem Lunia from Astute Investment Management. Please go ahead.
Manish Velecha
Hello. Yes. Yes. Hello sir. So just a few questions. I wanted to understand what is the split between bellows and slow systems as of now out of the 130 crore
Ramakrishna Kamojhala
Supreme. If you’re seeking the data point of split between the two products. So I should say more than 75% is being contributed by bellows and rest comes from exhaust manifolds and other structural components.
Manish Velecha
And the bitter margins are similar in both the businesses.
Ramakrishna Kamojhala
Yes.
Manish Velecha
And also wanted to know the split of industries of the 130 crores like local auto.
Anil Kumar P
What is the split?
Manish Velecha
If
Anil Kumar P
You could give me that
Ramakrishna Kamojhala
So fairly what I had earlier mentioned there has been a diversified sourcing entities across the two large OEMs that we are will be serving. Having said that there will be multiple applications or end users that they will be deploying towards local engines or towards the power generation systems where the bellow or the manifold applications will be used into.
Manish Velecha
So we might not have the industry level split of where the use cases,
Ramakrishna Kamojhala
We. We can take this portion offline. As of now we don’t have the data point to address.
Manish Velecha
And just a quick question or the previous owners had a similar business Van Flex or something of a similar name. Is that entity also merged in this entity or how is this going to function? Or does that entity remain operational?
Ramakrishna Kamojhala
No, no, this there the owners only have this entity for now. I believe the swale entity was being closed much long back and there is no such relation between the two.
Manish Velecha
Sure. Thank you so much.
Operator
Thank you. Come from the line of Mithul Mehta from Lucky Investment Managers. Please go ahead.
Manish Velecha
Yeah, hi. Congratulations to the whole team on a very successful acquisition. Sir, I had two questions. One is, you know, the asset value that we have paid compared to the value on the books is much higher. So obviously the incremental
Anil Kumar P
Value will stand as good with. Is that the right assumption on the books?
Manish Velecha
So, okay, coming. You know, the acquisition, if you compare with assets. No, so assets wise now the fixed size is very small because this is a capability LED and asset light kind of, you know, acquisition model. I can say so right now. Okay, with, with ROC point of view existing before acquisition, the RoC, the EBITDA to assets is very high, you know. But after the acquisition I have to compare with another 450 crores value and the EBITDA, so which I am at present, you know, estimating as 25 level, you know, over the year and when the capacity utilization, which is as of now at 50 to 60% and after, you know, in a robotic introduction and you know, the capacity will be further replaced.
So and thereafter my intention is to increase the ROC, you know, from 25 to much higher, higher percentage.
Anil Kumar P
What kind of ROC would you be sort of looking at for the current acquisition? And uh, so I. So will there be an amortization every year starting from FY27?
Manish Velecha
No, there won’t be any, any amortization. Nothing will be there. Okay, so because this is, you know, investment in subsidy company, of course, you know, when consolidation level, you know, some kind of, you know, elimination will be there, but you know, it will not come under, you know, amortization category. So but however, you know, in terms of pure ROC calculation perspective, I would suggest like, you know, okay, so the profit or the EBITDA versus the 450 cross investment, you know, is at present 25.
And we will as of now we’ll confident of continuing 25. It’s not much higher, you know, from now to. In three years time. But to answer your question, there won’t be any amortization issue.
Anil Kumar P
Okay. And sir, you know you did explain how the time for the company increases with this acquisition.
Manish Velecha
So particularly, you know, you also alluded to the fact that the market is growing at 6 to 7% and the total size of the market is about 2,500 crores. This is global or this also includes India. And if not then is there a reasonable India market also or not?
Rajanikanth Balaraman
So firstly it is not 2,500crores, it’s $2.6 billion.
Manish Velecha
Yeah, because I heard you saying 2.6 billion.
Rajanikanth Balaraman
Yeah, yeah, 2.6. And this is global. Considering Hubble is basically close to 90% in an export based. This is largely a global growth which is going to participate in.
Manish Velecha
Okay. And any large player in this particular product, you know that you can sort of help us to understand who has been growing and what is the current scale and size. And typically in this product the margins are sort of 50%. Or this is because of the India cost and engineering capabilities.
Ramakrishna Kamojhala
The margins are only a factor of where the end use of the product is. That is something we’ll have to be careful. Bellows is not only used in locomotive engines or power generation system. There are other usage also. So if you take for example of automotive as a segment, obviously there will be not such margins available. But considering there has been high entry barriers and due to the long qualification cycles that Hubble has endured over its operating journey, they have achieved such strong pricing power and rather than cost it is more of a factor of a design and the proprietary quality systems that they have set across their organization that is helping them sustain such high margins.
Rajanikanth Balaraman
There is a lot of proprietary drawings that Hubble owns that kind of forms these, you know, these products. And if you look at it, 70% of the products that Hubble basically manufactures are all single source. That means there is no other supplier other than Hubl. So this is kind of the reason of the thing. And then the previous competitors were like what you said, European and in American and those got displaced with over entering the scene with a better proposition.
Manish Velecha
So you know sir, when you say single source, which means that the target market for our products would not be 2.5 or $2.6 billion. Right.
Rajanikanth Balaraman
The 2.6 billion dollar is basically the Hubble Bellows and the tubing market that we spoke about. The. It’s a metallic bellow market. So we are very, very small, very small subsystem of that market.
Manish Velecha
Very small. So we can complete the entire portfolio as we move ahead.
Ramakrishna Kamojhala
Yes, Mithul. So your idea is Right. Currently there is only a component level offering right now. The plan for us to grow is also bring in some more sub assemblies. There are near term opportunities that we have already identified likes of ducks and mufflers to just to name a few. But eventually as we continue in this journey there will be more opportunities that we can look and deliver.
Manish Velecha
But my last question if you allow me at what utilization would you think of putting a new capex in this company?
Ramakrishna Kamojhala
Currently see the utilizations is roughly ranging between 50, 60% and with the advent of these automations and advanced robotic technologies coming in place, it is much lesser than that. If you look at the actual usage, the intent will be to grow up to 85 90% and only then redeploy some capex and then grow. But as you have realized there is enough number of space, you would have also understood that there’s a 200,000 square foot facility which is a very modernized one and there are scopes to improve, enhance and also enable advanced automation systems that will continue to see the light.
But to answer in short, yes, close to around 80 to 90% of the utilization levels being achieved. We will then look to deploy some cables
Manish Velecha
And those deployments are not very large though they would still be like 2030 pros or then
Ramakrishna Kamojhala
As of now the understanding is right. But as we advance into the journey there will be higher packages of works also that we’ll be able to address. And, and it will be difficult to guess at this point in time what will be the capex. I should say four or five years down the line,
Manish Velecha
But great. Yeah, all the best.
Ramakrishna Kamojhala
I, I will just want to add one more thing. As we continue to interact and update the street, we will be telling you what type of CAPEX that will be deployed in this business.
Manish Velecha
Okay, great. Thank you, thank you very much and wish you all the way.
Ramakrishna Kamojhala
Thank you.
Operator
Thank you. Our next question come from the line of Sagar Dhawan from Valuequest. Please go ahead.
Manish Velecha
Thanks for taking my question earlier. You said that as 9100 certification is what is one of the first steps towards getting into aerospace. So just wanted to understand what is the timeline that you’re putting around getting this 9100 certification? And second part of the question is on the CapEx, will you need additional CAPEX for securing this certification?
Ramakrishna Kamojhala
To answer your second question first, there will be no requirement of additional CAPEX to secure any such certification. But the certification timelines will be a natural one. Whatever is the whatever will be required in due course. We need that certification timeline to come Through
Manish Velecha
Understood. Yeah. And second question was on your wallet share. So with Cummins, because it’s a large customer, what could be the, what could be OBL’s wallet share within the product category that you are currently active in?
Ramakrishna Kamojhala
I should say they are a very large OEM with a very diversified global market which they are addressing. Hubl right now is a very small contributor to their wallet share. I cannot quantify the numbers right now, but it is a small proportion.
Manish Velecha
Understood. And one last question is on the growth guidance that you gave for 15 to 17% in the near term for OBL. So is it largely based on growth via existing customer base or is it via multi wire new customers that you are adding? And if it is the later then could you give some color on what kind of customers are being added? What is the good potential there and what end use it is basically going towards.
Ramakrishna Kamojhala
So it’s largely the current capabilities what Hubal has and this is what will drive the growth current
Operator
Customers and
Ramakrishna Kamojhala
With the current customers. Also we have not yet factored in any new customers figuring into this. With UNIM acquiring this business right now, enough opportunities is what we understand lies with the existing set of customers itself.
Manish Velecha
Understood. Thanks for taking the question.
Ramakrishna Kamojhala
Thank you.
Operator
Thank you. Our next question comes from the line of Ajinke Jada from Chris portfolio please. Correct.
Manish Velecha
Yeah. Thanks Manish for the opportunity and congratulations to the management for the good set of this acquisition. My question is regarding like this Hobbles products, can they find application directly into the aerospace sector?
Rajanikanth Balaraman
Yeah, some, you know engine tubing and several kind of tubing. You know these, these same capabilities could actually be used. We see even in you know airplanes. Piping, chemical process. So basically exhaust system, fuel lines in high temperature are some of the applications in the aerospace. In addition you know potentially we’re looking at nuclear semiconductor which also uses these piping cobbles that are going to be used. And you have piping and chemical processing companies as well as medical
Manish Velecha
And particularly regarding this aerospace part. So let’s say like you said you have, you are having discussion with the clients and for this capabilities that we will be acquiring through this company that is metal forming and tube bending. So these operations will be conducted in the Hobel facility. Like let’s say A and B process is being conducted at Unimix facility. Then product is being sent for these two processes at Hobel and the product is coming back how this will go ahead.
Rajanikanth Balaraman
So all metal forming, bending, tube bending, sheet metal will actually be carried out at the Hobol facility because it is the Skill is quite artisanal and very, very high skill. And we expect to basically grow there rather than segmenting out into multiple systems.
Manish Velecha
So. So by absorbing the skill like we like, like Unimex can’t learn those skills on its own and then put Capex in its own plant for metal forming
Rajanikanth Balaraman
To attend.
Manish Velecha
Yeah, like to carry out these processes at our facility to you can say reduce the logistics cost or to reduce the timeline.
Rajanikanth Balaraman
I think between logistic cost and having a concentrated talent and the infrastructure, I think you know we are going with B which is talent infrastructure.
Manish Velecha
Okay. And the 10% revenue for the hobble is coming from the domestics. And you rightly pointed out the products also find application in nuclear and semiconductor is saying lot of traction in those segments. So will we be like keen on the domestic market as well for four wheels?
Rajanikanth Balaraman
Yes, nuclear is definitely a big market. When I did allude to semiconductor it was still on the global side that I was talking about. And there is a market on the semiconductor as well. So obviously just at a high level synergy standpoint from a growth perspective, the plan is to start with Hubl existing customers, expand the wallet share. Second one is there are some green shoots that HUBL has able to actually attract build a business there. Then parallel also get Unimex existing industries to participate in this.
And there’s already been customer reach out on this acquisition and how we can actually work with it.
Manish Velecha
And the last question from me is like the NKCL certification that you are talking about is for Hobil, right? And like how much time it will take?
Rajanikanth Balaraman
Yeah, about a year.
Manish Velecha
About. About a year. Okay. Okay. Okay,
Operator
Thank you. Our next question comes from the line of Shreya Ruya from ZTO Capital. Please go ahead.
Unidentified Participant
Hello. Thank you for the opportunity and many congratulations on the acquisition. I just had a question that if you say that we are currently operating on 50 to 60% utilization but then on the other side we also see a lot of demand and the product is niche plus the high end users are also like growing very fast. So while the utilization so low right now, like what can be the peak revenue if we operate on full capacity?
Ramakrishna Kamojhala
Shreya though the intent is to double from here on, but we will see how the progression grows. Historically the business has grown anywhere between 10 15%. And we are also trying to push this annual growth percentage relatively upwards. Moving ahead with the existing set of customers and the capability, we can see that this growth is capable to be broadened. But there are parallel synergies with Unimex existing set of customers. That we are speaking to about these capabilities and offerings. And with that there can be an upside also available.
Unidentified Participant
Right, but like this wanted to know from this acquisition standalone point of view that why is it still over that limit like 50%, like if you can just highlight it.
Ramakrishna Kamojhala
See this has been into mission critical niche. Sort of a business where the components like bellows or the exhaust manifolds has been deployed. Had they sacrificed some margins across and entered into automotive as a segment, that could have given them a much upside into the utilization ratio, but again would have compressed the margins. That was the previous owners call that they never wanted to enter such segments sacrificing margins. And this is how the business has flourished. Once Unimex has taken over this opportunity, we look into other areas also.
But even our intent is to not to sacrifice margins at the cost of growth. We will continue to see growth happening in the business, but also want to sustain the margins that is present.
Unidentified Participant
Right, that makes sense. And also if it wouldn’t have been this acquisition, then what amount of CapEx we would have, you know, had to incur if you had to get the similar capability?
Manish Velecha
Yeah, it’s a good question. So for the interest of every investors now we would like to say one thing. In fact, you know, as a strategy Unimec, you know, beginning of the year, last year, you know, investment in this capability, investment in this capex, no metal forming, tube bending and sheet metal. This kind of, you know, special area where Unimic is not there. We have actually planned a capex and this is close to 100 crv. Initially we planned, you know, to have this capability, of course, you know, to invest and then to prove this and to onboard the capable people, it would have taken 18 months or 24 months.
And luckily, you know, when we found this hobble below, you know, having all these capabilities, no, it was a kind of, you know, for us to take easy decision and then just we thought like we will acquire this. So that’s what back to like, you know, somebody also asked like, you know, whether, you know, these capabilities are going to be used for aerospace and nuclear. Yes, exactly. This is the intention. We also planned the capex and luckily the, you know, the acquisition also happened. While acquisition is giving its own customers and revenue and at the same time Unimex original intent of, you know, like, you know, using this capability, a new capability for aerospace as well as nuclear will continue to do, you know, in a, in a medium term.
Rajanikanth Balaraman
So another, another aspect I want to add here is rather than cost, the lens that we use is the time it takes to basically build a skill of tubing. If you look at globally, this is a very, very, very niche skill. There are very handful of suppliers across the globe who have the skill. And when we saw the skill available and that too with a very, very high technology, we basically grabbed the opportunity and jumped in. And obviously this is also coming in with a high margin. There’s already customers that were already acquired.
So this was a very, very natural choice for us. Rather than building it and then waiting for customers to come and not knowing whether how that will basically play out.
Unidentified Participant
Right, right. That’s very nice. And also is there any like payback period which you guys are looking at? Like when can we recover the KPI money in the company? The acquisition?
Manish Velecha
Yeah, payback wise, like you know, it takes more than 8 to 10 to 10 years kind of thing. But again it depend on, you know, two factors. How fast, you know, the, you know, the revenue growth and ebitda. You know, growth happens. No. Then no, it changes. But naturally, yeah, eight to 10 years is a kind of financial, you know, calculations we made. Yeah. But things will change. But as of now we are, we are conservative in declaring, you know, what would the world score to be.
Unidentified Participant
Right. Thank you. That’s it. From my side. Thanks. And all the very best.
Operator
Thank you. Our next question come from the line of Krisha Kansara from Molecule Venture. Please go ahead.
Unidentified Participant
Yeah, thanks for giving me this opportunity. So majority of the business energy site questions have been you know, asked by previous participants. So I won’t repeat those. I have three quick questions. If you can highlight the current order book of the company and what is the kind of execution cycle that we are looking at for this company.
Ramakrishna Kamojhala
So Krishna, so the current order book as we have seen is for the next six months. There’s an outstanding order book for 65cr plus is what we have understood. But however these OEMs again gives out schedules for one full year and also indicate for the next year what is the platform and where the components will be used for to understand numbers. This is 65cr to be done within the first six months. But overall there has is a strong growth opportunity available with the intent that being given by the customers.
Unidentified Participant
Okay. And for how many years does the customer give let’s say the software orders like not the order book but let’s say the intent of order.
Ramakrishna Kamojhala
So the first. So annually there’s a schedule being discussed with the customers and that is being being mentioned to the end to Hubble. But the usage or the growth in the Platform. If you want to understand any such engines that you see are being used for over a period of 15 to 20 years and there is a repeat market of the bellows or the manifold that is getting used into these systems which is very frequently used considering the high temperature and pressure abrasion that the components or the manifolds has to keep addressing.
With that being said, there is a frequent demand which. Which we can say that it can be correlated correlated for over a annual growth case and hence next 20 to 30 years. Till the time what we have seen high power engines and CAPEX driven AI data centers are being used in operation, there will be a continued demand of the application parallel. Also as the emission norms get stricter, there will be a high end usage of these metal bellows application along with the manifolds. This will ensure criticality of the processes also.
Unidentified Participant
Okay, Understood sir. And next you mentioned that the current capacity utilization of the company is around 50 to 60%. If you can help me understand what is the current installed capacity in terms of units or hours or
Ramakrishna Kamojhala
We can take that question offline. Krishan.
Unidentified Participant
Sure, I will do that. And lastly you said that 50% is the EBITDA margin. So can you throw some light on the gross margins?
Ramakrishna Kamojhala
So gross margins are. Yeah, it’s slightly lesser than 70%.
Unidentified Participant
Thank you so much.
Operator
Thank you. Our next question come from the line of CA Gravid Goel from Sirin Alpha. Please go ahead.
Manish Velecha
Hello. For Anode.
Operator
Yes.
Manish Velecha
Hi. Thanks for the follow up. Just wanted to understand one thing. The way this transaction is getting funded and loan and the CCD part of it. Can you let us know what is the interest rate is going to be charged?
Ramakrishna Kamojhala
What is the interest rate for ccd? So I’ll tell you. These are all internal. The structure that has been done is between the subsidiary and the holding company company towards the sellers. Nothing is going out. It has always been a cash deal and it will continue to be that way.
Manish Velecha
Okay, so you are saying ultimately it will be a cash deal only.
Ramakrishna Kamojhala
Yes, it is. It is already a cash deal with a 10% hold back that we have confirmed with the tellers. Beyond that everything else is our internal structuring that we have done.
Manish Velecha
Understood. How are we going to fund this cash? Like from our investment side of the cash sitting on the balance sheet.
Ramakrishna Kamojhala
So yes, it was used from the internal funds that was in the Unimex balance sheet. There are no further borrowings that we are planning to do.
Manish Velecha
Got it, Got it. Thank you very much for the clarification.
Operator
Thank you so much ladies and gentlemen, that was the last question for today. With that, we conclude the today’s conference. On behalf of. Thank you so much, sir.
Rajanikanth Balaraman
On behalf of Unimec.
Operator
Thank you so much, sir. Ladies and gentlemen, on behalf of Unimec Aerospace and Manufacturing Limited, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.