The Anup Engineering Limited — Q1 FY26 earnings call

Call held 5 Aug 2025

Management summary

The Anup Engineering Limited reported a decent Q1 FY26 performance despite a historically weaker quarter and global uncertainties. Revenue, EBITDA, and PAT all showed strong double-digit growth. While exports were exceptionally high in Q1, management expects a normalization towards their strategic 50-55% target. Order booking was sluggish due to geopolitical and trade concerns, leading to a downward revision of full-year revenue growth guidance, but the company remains confident in its capacity and pipeline for future growth.

Highlights

  • Consolidated revenue for Q1 FY26 was ₹175.2 crores, marking a 20% growth year-on-year.

  • EBITDA stood at ₹40.4 crores, growing by 22% YoY, with PAT at ₹26.3 crores, up 21% YoY.

  • Exports constituted a high 72% of Q1 revenue, though expected to normalize to 50%-55% for the full year.

  • The pending order book after Q1 execution is ₹604 crores, with an encouraging enquiry bank of ₹1,020 crores.

  • Phase-II expansion at Kheda is now expected to be commissioned in Q2 FY26 (earlier Q3), increasing total capacity to ₹1,200 crores per year.

  • FY26 revenue growth guidance has been revised to 15%-20% (from earlier higher expectations) due to delays in US orders, with EBITDA margin guidance at 21%-22%.

Concerns

  • Global geopolitical uncertainties (wars, trade disruptions, tariffs)

  • Delay in US project finalization due to trade agreements/tariffs

Key financials

  1. Consolidated Revenue ₹175.2 Cr +20%YoY
  2. EBITDA ₹40.4 Cr +22%YoY
  3. PAT ₹26.3 Cr +21%YoY
  4. Exports as % of Revenue 72%
  5. Pending Order Book ₹604 Cr
  6. Enquiry Bank ₹1,020 Cr

What they filed

Q1 FY27: revenue down 30.4%, net profit down 95.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue188 171 205 169 233 +24%193 +13%195 −5%118 −30%
EBITDA43 40 46 39 51 +19%43 +5%36 −22%9 −76%
Net profit32 31 29 26 32 −1%25 −21%25 −13%1 −96%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Manufacturing Locations Revenue Contribution
    58% Ahmedabad Plant37% Kheda Facility5% Mabel Engineers
  • Sectoral Revenue
    44% Oil and Gas32% Petrochemicals21% Fertilizer and Chemicals3% Others
  • Product Mix
    46% Heat Exchangers44% Vessels, Reactors, Columns10% Silos

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY25-26 · Medium confidence 15%-20%

    Previously higher expectations → 15%-20%

    With due consideration to these uncertainties, especially on trade due to tariffs and supply chain challenges due to wars and geopolitics, our guidance for this financial year FY25-26 would be 15%-20% revenue growth with an EBITDA of about 21%-22%. Of course, we will try and keep this at 20% growth.

    — Reginaldo D'Souza, Managing Director & Chief Executive Officer

  • Long-term Revenue CAGR Revenue · next 3 years · Medium confidence 15%-20%
    So, on a three year perspective, as a business, we are still at 15% to 20% kind of growth plan for the next three years. As a business with all the diversification plans in place, which should be inching towards 20%, but I would keep the guidance of 15% to 20% over the next three years.

    — Reginaldo D'Souza, Managing Director & Chief Executive Officer

  • Kheda Plant Revenue Revenue · next year (FY27) · Medium confidence ₹300-400 crores
    So, Kheda plant for next year will be anywhere between Rs.300 crores to Rs.400 crores depending on the product mix. So, the plant capacity would be Rs.400 crores. Depending on how the order intake goes, it can be anywhere between Rs.300 crores and Rs.400 crores. But largely it would be towards Rs.350 crores, 400 crores mark.

    — Reginaldo D'Souza, Managing Director & Chief Executive Officer

Profitability

  • EBITDA Margin Profitability · FY25-26 · Medium confidence 21%-22%
    With due consideration to these uncertainties, especially on trade due to tariffs and supply chain challenges due to wars and geopolitics, our guidance for this financial year FY25-26 would be 15%-20% revenue growth with an EBITDA of about 21%-22%.

    — Reginaldo D'Souza, Managing Director & Chief Executive Officer

Export Mix

  • Exports as % of Revenue Export Mix · FY25-26 · Medium confidence 50%-55%
    Interestingly, the exports was at 72% of our revenue. Yes, this seems high, but I believe will normalize over the year to about 50%-55% considering our order book pipeline. This is fairly in line with our strategic intent of being a 50% export business.

    — Reginaldo D'Souza, Managing Director & Chief Executive Officer

Capacity

  • Kheda Phase-II Completion Capacity · Q2 FY26 · High confidence Q2 FY26

    Previously Q3 FY26 → Q2 FY26

    The Phase-II expansion at Kheda is expected to be completed before time, and we should commission it in Q2 of this financial year instead of Q3 as informed earlier.

    — Reginaldo D'Souza, Managing Director & Chief Executive Officer

  • Total Annual Business Capacity Capacity · post Phase-II completion · High confidence ₹1,200 crores
    With this, we will have a capacity to roll out approximately Rs.1,200 crores business per year from these three locations.

    — Reginaldo D'Souza, Managing Director & Chief Executive Officer

  • Ahmedabad Annual Capacity Capacity · post Phase-II completion · High confidence ₹600 crores
    A break-up for you all, if it helps, could be approximately Rs.600 crores from Ahmedabad, Rs.400 crores from Kheda, and Rs.200 crores coming from Mabel.

    — Reginaldo D'Souza, Managing Director & Chief Executive Officer

  • Kheda Annual Capacity Capacity · post Phase-II completion · High confidence ₹400 crores

    — Reginaldo D'Souza, Managing Director & Chief Executive Officer

  • Mabel Annual Capacity Capacity · post Phase-II completion · High confidence ₹200 crores

    — Reginaldo D'Souza, Managing Director & Chief Executive Officer

New Verticals

  • AC HE Revenue Contribution New Verticals · Q1 next year (FY27) · Medium confidence meaningful contribution
    So, contribution directly to the revenue part, I believe it will be in Quarter 1 of next year, because generally the cycle times would be anywhere between seven to eight months. So, I believe even if we bag an order by the end of this quarter, so we should be good to go with Quarter 1 revenue coming in from AC HE.

    — Reginaldo D'Souza, Managing Director & Chief Executive Officer

  • Service Business Revenue New Verticals · in three years' time · Medium confidence ₹200 crores
    So, as I explained initially for the first year, we are not looking at a very large volume coming from service, but we are trying to build our credentials for service business in this market, which in three years' time, all going well, we should reach about Rs.200 crores.

    — Reginaldo D'Souza, Managing Director & Chief Executive Officer

Risks & concerns

  • Global geopolitical uncertainties (wars, trade disruptions, tariffs)

    high

    These factors disturbed supply chains and led to sluggish order booking in Q1, particularly impacting US orders and necessitating a revision of FY26 revenue guidance.

    Management acknowledged

  • Delay in US project finalization due to trade agreements/tariffs

    high

    Good opportunities in the US were under negotiation but delayed, impacting Q1 order intake and full-year execution potential, even though India remains competitive on landed cost.

    Management acknowledged

  • Higher working capital block

    medium

    Mainly due to increased raw material inventory for specialized metallurgy and lower customer advances, though expected to normalize in coming quarters.

    Management acknowledged

Q&A highlights

3 direct
Order Booking and Revised FY26 Growth Guidance Direct
You are right, Jaiveer. So, as you have heard me on the last call, we were expecting some good order intakes from the United States, which we had almost reached closer to finalization. Unfortunately, those have not gone through. We should get hands on them maybe in a couple of months, but then we have less time for execution. So, to be more certain, we have brought down the guidelines to about 15% to 20%.

Reveals the direct impact of delayed US orders on the company's ability to execute within FY26, leading to a revised, lower growth guidance.

Asked by Jaiveer Shekhawat, Ambit Capital

Profit Growth Lagging Sales Growth Direct
So, as we grow, we have to take orders at aggressive pricing for our growth plan. That is one. Second, I am sure you would have heard me in the calls of the previous that as we are growing, we have decided to take up a more large volume product, which may be lower in profitability, maybe about 15% profitability, but the churn cycles are more. And that is the precise reason which we have been able to grow over the last three years with 30%-plus CAGR.

Explains the strategic trade-off between aggressive sales growth and margin compression, indicating a shift towards higher volume, lower margin products to fuel growth.

Asked by Gopalakrishnan, Uthramush Investments

US Dependence and Diversification Strategy Direct
So, having said that, as I mentioned, we do not see those projects going away, but maybe a touch delayed by the two to three months, that's what we are expecting. But at the same time, we understand that we need to course correct and diversify. So, we have already taken initiatives to focus more on Middle East, where there are many enquiries on the table at the moment.

Highlights the company's proactive strategy to mitigate risks from US trade uncertainties by diversifying its export focus towards the Middle East, impacting the geographic mix of future orders.

Asked by Gopalakrishnan, Uthramush Investments

3 min read 6 chapters

Detailed narrative

Q1 FY26 Performance Overview

The Anup Engineering Limited reported a robust Q1 FY26 with consolidated revenue growing 20% YoY to ₹175.2 crores. EBITDA increased by 22% to ₹40.4 crores, and PAT saw a 21% rise to ₹26.3 crores. This performance was achieved despite Q1 historically being a weaker quarter due to annual holidays and current supply chain pressures. Exports contributed a significant 72% to the Q1 revenue, although this is expected to normalize to 50%-55% for the full financial year.

Manufacturing Capacity and Product Mix

All three manufacturing locations contributed well, with Ahmedabad accounting for 58% of revenue, Kheda for 37%, and Mabel Engineers for the balance. The Phase-II expansion at Kheda is now anticipated to be completed in Q2 FY26, ahead of the earlier Q3 schedule. This expansion will boost total annual business capacity across all three locations to approximately ₹1,200 crores, comprising ₹600 crores from Ahmedabad, ₹400 crores from Kheda, and ₹200 crores from Mabel. The product mix saw heat exchangers at 46%, vessels/reactors/columns at 44%, and silos at 10%.

Order Booking and Pipeline

Order booking for Q1 was described as 'a touch sluggish' due to global uncertainties, wars, and trade disruptions. However, the company maintains a pending order book of ₹604 crores after Q1 execution, which is fully executable within the current financial year. An encouraging enquiry bank of ₹1,020 crores for global projects, particularly from domestic and Middle East markets, is expected to fuel future growth. Management noted a strong enquiry inflow from the Middle East and domestic markets, with projects like Bina Refinery and Reliance PTA providing good opportunities.

Revised FY26 Guidance and Long-term Outlook

Due to delays in finalizing US orders and execution timelines, the FY26 revenue growth guidance has been revised to 15%-20% (from earlier higher expectations). The EBITDA margin guidance remains at 21%-22%. For the longer term, the company aims for a 15%-20% revenue CAGR over the next three years, supported by diversification plans. Management expressed confidence in achieving the revised guidance, partly due to an opportunity for short-term delivery items.

Strategic Diversification and New Initiatives

The company is actively diversifying its market focus, particularly towards the Middle East, to mitigate risks associated with US trade uncertainties. They have secured their first order for Saudi Aramco, involving 26 heat exchangers to be delivered by Q3 FY26. In new verticals, the services business has secured a small order, with a long-term target of ₹200 crores in three years. The power sector also saw an inroad with an order of ₹7-8 crores, and three enquiries are quoted for AC HE business, with meaningful revenue contribution expected by Q1 FY27.

Working Capital and Profitability Dynamics

The working capital block was slightly higher in Q1 due to increased raw material inventory for specialized orders and lower customer advances, but this is expected to normalize. Management addressed concerns about profit growth lagging sales growth by explaining a strategic shift towards larger volume, potentially lower-profitability products (around 15% profitability) to drive aggressive growth. They also confirmed that there were no order cancellations and that profitability for existing orders is protected against supply chain issues, with 70-80% of raw materials sourced domestically.

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