OBSC Perfection: Can Defence, Humanoid Robotics and Aerospace Power Future Growth?

Synopsis: OBSC Perfection is evolving beyond automotive machining into a diversified precision engineering company with growing exposure to defence, humanoid robotics and aerospace. Strong export growth, a Rs 1,200 crore order book, integrated manufacturing capabilities and expansion into high-value sectors could drive its next phase of scalable, margin-accretive long-term growth. 

OBSC Perfection is gradually transforming from a traditional automotive machining company into a diversified precision engineering player with exposure across multiple emerging industries. Alongside its core automotive business, the company is expanding into defence, aerospace, humanoid robotics, renewables and medical applications while simultaneously adding new manufacturing capabilities. 

With rising exports, increasing non-automotive contribution and large expansion plans underway, management believes the company is entering a new phase of growth driven by scale, diversification and higher-value engineering opportunities.

Strong FY26 Performance Sets The Base For Expansion

The OBSC Perfection company had one of its best financial years in FY26, beating its own expectations in terms of both growth and profitability. The company reported an impressive 54% revenue growth together with 19.5% EBITDA margins against its forecasted performance for FY26 of 40% revenue growth and margin improvement. 

Export contribution grew to 20% with the company expanding its operations in 17 different countries, along with a massive increase in non-automotive revenues, which grew by almost 150%.

The company’s management pointed out that even with all the geopolitical tensions, uncertainties related to tariffs, and disruption caused due to the war in West Asia, the company was able to operate normally through active inventory and working capital management. 

OBSC Perfection ended the year with a robust order book worth more than INR1,200 crore, of which nearly INR980 crore pertains to automotive orders, and about INR230 crore pertains to non-automotive business. All these projects will be completed by the company within the next five-seven years.

Nevertheless, the most important thing noted during the earning call was the management’s effort to position OBSC Perfection not as a simple automotive machining company but as a diversified precision engineering firm.

OBSC Is Expanding Beyond CNC Machining

Initially when the company was formed, OBSC was simply a CNC machining company. However, during the last year, OBSC has significantly grown their manufacturing ecosystem by expanding into other manufacturing processes, such as cold forging, hot forging, investment casting and stamping.

As per management, the objective of diversification in manufacturing processes is to finally move into sub-assemblies and full-blown precision manufacturing. Rather than being restricted to manufacturing through one particular manufacturing process and working solely with one industry, the company wishes to become a full-fledged precision engineering company catering to multiple industries.

Management constantly reiterated that OBSC’s build-to-print strategy allows significant flexibility. The company’s machines are extremely fungible in nature; hence, they can be flexibly utilised for manufacturing products in the automotive industry, defence industry and industrial machinery industry without any need of investing heavily.

OBSC is currently in the midst of completing an acquisition deal for stamping facilities, which would add 32 presses of tonnages ranging from 50 tonnes to 500 tonnes. According to management, stamping adds significant value to the company since it provides access to welding assemblies and sub-assemblies which form a much bigger percentage of customer spend as compared to machined or forged components.

Defence Is Becoming A Key Strategic Vertical

Defence was one of the key focus areas during the conference call. In the past year, the company has made various casings for medium and low calibres, some of which have been verified, whereas others are still under the verification process.

OBSC has initiated mass production of ignition primers, which is a consumable part required each time an artillery shell is fired. According to management, this business segment commenced commercial production in May 2026 and is set to scale up over time.

Moreover, the company has managed to create fins for MK-84 bombs from its casting operation. This, according to the management, was a very vital and critical component of global defence applications.

In order to enhance its involvement in defence, the company registered with Bharat Dynamics Limited (BDL) and is beginning discussions with various other defence PSUs such as YIL and MIL. Management further indicated plans of engaging in technology and JV partnerships for manufacturing more sophisticated defence products. According to the management, defence had emerged as a core priority of the company due to its immense scope and project visibility in India.

Humanoid Robotics Could Become A New Growth Engine

OBSC’s foray into the humanoid robotics supply chain stood out among other aspects of the call. The company revealed that it has provided over 4,000 aluminium-milled parts for humanoid robotic applications in the past six months during its trials period.

Such parts have been utilised for cooling systems of humanoid robots’ motors. It was explained by management that humanoids have a lot of motors which produce a considerable amount of heat. Therefore, there is the need for precise cooling system components.

Management mentioned that OBSC has participated in this business from the prototyping and validating phases, and the humanoid robotics business is expected to make an important contribution in FY27. Crucially, it is indicated that at the moment OBSC is the only company participating in the early development phases of this project.

Aerospace Qualification Could Open High-Margin Opportunities

Another area where OBSC is preparing itself for growth is aerospace. The firm is now completing the process of getting its AS9100D certification, which is an internationally recognised certificate for aerospace manufacturing. This, according to the management, is an intense and lengthy process that will take one year.

Several aerospace companies have registered themselves as suppliers of OBSC, while other companies are making RFQs for their services. Management revealed that several aerospace companies have inspected OBSC facilities and have started the process of qualification.

The management intends to build the capability of aerospace machining, specifically in 5-axis machining and machining of precision parts. Nevertheless, management also mentioned that they will pursue the field of aerospace very cautiously and after receiving commercially feasible projects.

If the projects prove profitable for OBSC, it could make huge improvements to the bottom line because aerospace machining fetches more profit than regular automobile machining.

Automotive Still Remains The Core Business

However, automotive still remains the core part of OBSC’s operations. Currently, almost 40% to 50% of automotive sales are being driven by commercial vehicles. The significant customers for the company are Ashok Leyland, Tata Motors, and Mahindra through customers such as Tenneco.

The shock absorber rods account for around 8% to 9% of total sales of OBSC. Management believes that this segment will witness a nearly doubling effect with the setting up of a separate Sanand plant for the customer Tenneco, which can help drive approximately INR40 crore of revenues.

Furthermore, management pointed out some interesting opportunities that OBSC was seeing with regards to Tata AutoComp, a fast-growing customer of the company. It was seen that OBSC was generating revenues from Tata AutoComp through its Tesla-related automotive operations, as it was already supplying its machining operations to the company.

Management also indicated that many global automotive OEMs were planning to shift their production operations to India due to cost and supply chain advantages.

Export Growth And China Plus One Tailwinds

Exports would form one of the largest growth areas for OBSC over the coming years. While the contribution of exports was only 20% in FY26, it is likely to go up to as much as 30%-35% in future periods.

According to the firm, export prices are always at least 10% higher compared to domestic prices, thereby making exports more profitable for the company. The depreciation of the Indian rupee has made products from India less expensive compared to their Chinese counterparts, giving an advantage to Indian exporters.

OBSC has been focusing on increasing its share in the US      and Mexico markets, where demand levels are better than in Europe. As per management, the firm has appointed a US business advisor and has plans to initiate several large projects over the next 2-3 months.

OBSC feels that the ‘China Plus One’ effect has continued to work well for firms with manufacturing operations in India, especially those which have diverse capabilities and good process integration skills.

Large Integrated Factories Reflect Long-Term Ambitions

OBSC is driving its growth plans with substantial capital spending on manufacturing facilities. OBSC made a preferential issue worth INR43.3 crore during FY26 towards expansion plans and construction of mega factories.

OBSC has purchased over 11 acres of industrial land in Supa at a cost of approximately INR17 crore-INR18 crore. The management intends to set up a big manufacturing facility in Supa consisting of a forging, casting and stamping plant under one roof.

It is the management’s expectation that OBSC could earn between INR700 crore and INR800 crore from the Supa factory alone in terms of revenue when operating at full capacity, although such an achievement is likely to be realised over time.

As per OBSC’s projections for FY27, capital expenditures will come in around INR15 crore-INR20 crore, which is expected to drive growth for the subsequent two years. Notably, the management has reiterated that OBSC adopts a phased and prudent approach in growing its business and does not make huge capital investments without having business clarity.

Multiple Growth Drivers Could Shape OBSC’s Next Phase

It is evident from the FY26 earnings call that OBSC Perfection is seeking to evolve into a diversified advanced precision engineering platform from being an automotive machining supplier.

The company is currently exposed in a range of end markets such as automotive, defence, humanoid robotics, aerospace, renewables and medical. According to management, diversifying into many more processes and entering higher value-added markets will ensure that OBSC maintains its growth momentum while minimising exposure to any one market.

OBSC has already established itself through strong backlog levels, higher exports, rising non-automotive contributions and growing exposure in emerging markets such as humanoid robotics and aerospace. All this suggests that the company could potentially grow much larger over the next few years.

But execution will be crucial. Aerospace certification, defence scaling, humanoid commercialisation and factory integration are all complex projects which require significant capital discipline. Nevertheless, based on the tone of management’s comments, it seems like OBSC is no longer just thinking like a typical auto ancillary firm.

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