The Anup Engineering Limited — Q2 FY26 earnings call

Call held 10 Nov 2025

Management summary

The Anup Engineering Limited reported a solid H1 FY26 performance with consolidated revenue growing 20.2% and EBITDA up 20.3%. While PAT growth was modest at 3.1% due to tax benefits in the prior year, the company saw a significant improvement in Q2 order booking. Strategic investments in capacity expansion are complete, and the focus is now on maximizing revenue generation from these facilities, supported by a robust inquiry pipeline and new market entries.

Highlights

  • H1 FY26 consolidated revenue reached INR 407.5 crores, marking a 20.2% growth.

  • H1 FY26 EBITDA stood at INR 91.8 crores, growing by 20.3%.

  • H1 FY26 Profit After Tax (PAT) was INR 58.3 crores, a 3.1% increase.

  • Export revenue constituted 56% of the total, in line with plans.

  • New order booking for Q2 FY26 improved to INR 257 crores YTD, compared to INR 65 crores in Q1.

  • The current pending order book is INR 568 crores, fulfilling growth guidance for FY26 and booking for FY27.

  • Manufacturing capacity in Gujarat increased 2.5x in 3 years, from 8,000 MTPA to 20,000 MTPA.

  • Global inquiry pipeline stands at approximately INR 1,100 crores, expected to fuel next financial year's plan.

Key financials

3 periods

Headline

  • Current Order Book
    ₹568 Cr
  • ROCE
    22.8%

Q2

  • YTD Order Booking
    ₹257 Cr

H1

  • Consolidated Revenue
    ₹407.5 Cr
    YoY +20.2%
  • EBITDA
    ₹91.8 Cr
    YoY +20.3%
  • PAT
    ₹58.3 Cr
    YoY +3.1%

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

  • Ahmedabad Plants
    ₹256 Cr Revenue Contribution63% Percentage of Revenue
  • Kheda Plant
    ₹143 Cr Revenue Contribution35% Percentage of Revenue
  • Mabel Engineers
    ₹8 Cr Revenue Contribution2% Percentage of Revenue
  • Oil and Gas
    42% Sectoral Revenue
  • Petrochemicals
    30% Sectoral Revenue
  • Fertilizer and Chemicals
    18% Sectoral Revenue
  • Others (Sectoral)
    10% Sectoral Revenue
  • Heat Exchangers
    58% Product Mix
  • Vessels Reactors Column
    38% Product Mix
  • Silos and Other Products
    4% Product Mix

Guidance & targets

Profitability

  • Average Other Expenses Profitability · quarter-to-quarter · High confidence 19-20%
    So, on an average, if you look at quarter-to-quarter, because it's going to be dynamic, you can assume 19% to 20% average other expenses.

    — Reginaldo Dsouza, Managing Director & Chief Executive Officer

  • Profit Growth vs. Sales Growth Profitability · going forward · Medium confidence largely in line
    It would be largely in line with the top line growth.

    — Management

Order Inflow

  • Fresh Order Intake Order Inflow · every quarter · High confidence INR 200-250 crores
    Yes. In fact, that's our strategy as well. The intent is that every quarter, we should be getting in at least approximately about INR 200 crores to INR 250 crores fresh order intake.

    — Reginaldo Dsouza, Managing Director & Chief Executive Officer

Order Book

  • Opening Order Book Order Book · FY27 · High confidence INR 700-750 crores
    So, at the starting, as I mentioned earlier, as we step into the first of April of the year, we wish to have at least 75% to 80% of the revenue plan for that particular year. So, if you look at from FY '27 perspective, we should be comfortable with anything between INR 700 crores to INR 750 crores.

    — Reginaldo Dsouza, Managing Director & Chief Executive Officer

Order Pipeline

  • Average Inquiry Pipeline Order Pipeline · next 6-7 months · Medium confidence INR 1,100-1,200 crores
    So, this 1,100 crores, considering the macro dynamics today in terms of how the market is moving, I believe for the next 6 to 7 months, the average inquiry pipeline should be in the range of 1,100 crores to 1,200 crores, which augurs well for us.

    — Reginaldo Dsouza, Managing Director & Chief Executive Officer

Revenue

  • Long-term Organic Growth Rate Revenue · beyond INR 1,000 crores · High confidence 20-25%
    And now we need to stabilize our operations. And if you have heard our guidance, we were supposed to grow aggressively for the first 3 years and then normalize it in the range of 20% to 25% growth rate, because beyond INR 1,000 crores, I am pretty sure you would understand that growing at 37% will be too tight for this kind of an industry.

    — Reginaldo Dsouza, Managing Director & Chief Executive Officer

Other

  • US Tariffs Normalization Other · maximum 3 months · Medium confidence 3 months
    And we are pretty sure based on the conversations and I believe the way tariffs are, things are going to normalize and maybe in maximum 3 months.

    — Reginaldo Dsouza, Managing Director & Chief Executive Officer

Risks & concerns

  • High Working Capital Block

    medium

    Working capital block at 3x (120 days) due to lower customer advances and higher debtors from long-cycle export orders, with INR 150 crores worth of equipment in transit/waiting at port.

    Management acknowledged

  • US Tariffs and Market Uncertainty

    medium

    Uncertainty regarding US tariffs impacting competitiveness; current projections discount US business, but management is hopeful for normalization within 3 months.

    Management acknowledged

  • Order Booking Volatility

    low

    Order booking in Q1 and previous quarter was lower, leading to a temporary dip in the order book, attributed to delayed tender finalizations.

    Management acknowledged

Areas of evasion (1)

  • Specific details on royalty percentage

Q&A highlights

3 direct
Order Book Decline and Recovery Direct
So, we are pretty confident of moving back to our order position. It's a small little delay from the perspective of tenders and large ticket items. And we are very hopeful, and I am confident of coming back on our order book position.

Addresses investor concern about a significant drop in a key leading indicator (order book) and provides a clear path to recovery based on pipeline and delayed tender finalizations.

Asked by Chetan Vora

Working Capital and Cost Structure Increase Direct
So, on the other expenses side, it's mostly on the marketing expenses side, which is contributed largely by the royalty part... But having said that, the costs are part of our cost, built in into the estimation. And that's why you will never see that impact truly on the EBITDA... Interest cost... That's mainly because of the working capital block... it's the short term and one-offs.

Clarifies the nature of cost increases, attributing them to royalty payments for specific technology products and temporary working capital needs, reassuring investors that these are either built into pricing or short-term.

Asked by Vivek Patil

US Market Strategy and Tariff Impact Direct
This year, if you look at, we have hardly anything that is exported to U.S. directly, because we didn't have any order book from there. We focus more on Middle East... In all our projections that we made, we have right now discounted for the business from U.S. Anything that comes from the U.S. is going to be a bonus for us... we are in talks with customers right now from the United States for many inquiries despite having 50% tariffs. And we are pretty sure based on the conversations and I believe the way tariffs are, things are going to normalize and maybe in maximum 3 months.

Provides clarity on the current minimal direct exposure to US tariffs, outlines a cautious but opportunistic approach to the US market, and suggests a timeline for tariff normalization, mitigating a potential risk.

Asked by Ranjeet Kumar

3 min read 6 chapters

Detailed narrative

Solid H1 FY26 Performance and Order Book Dynamics

The Anup Engineering Limited reported a consolidated revenue of INR 407.5 crores for H1 FY26, marking a 20.2% year-on-year growth. EBITDA also saw a robust increase of 20.3% to INR 91.8 crores. While Profit After Tax grew modestly by 3.1% to INR 58.3 crores, this was attributed to a higher tax benefit in the prior year due to ESOP exercises. New order booking for Q2 FY26 improved significantly to INR 257 crores YTD, compared to INR 65 crores in Q1, bringing the current pending order book to INR 568 crores. Management expressed confidence in returning to higher order book levels, citing an INR 1,100 crore inquiry pipeline and expected finalization of delayed tenders by December 2025.

Strategic Capacity Expansion and Utilization Focus

The company has successfully completed its CAPEX investments, notably the Phase 2 expansion at the Kheda plant, with one manufacturing bay already commissioned and another expected by December. This expansion has increased the overall manufacturing capacity in Gujarat by 2.5 times over three years, from 8,000 metric tonnes per annum (MTPA) to 20,000 MTPA. All three manufacturing locations (Ahmedabad, Kheda, and Mabel Engineers) are now equipped to generate approximately INR 1,200 crores in revenue. The strategic focus for the coming period will be on maximizing the utilization of these enhanced facilities to drive future revenue growth.

Working Capital and Cost Structure Clarification

The working capital block was noted as temporarily high at an average of 3x (120 days), primarily due to lower customer advances and higher debtors from long-cycle export orders, particularly those with FOB contracts awaiting ship availability. Approximately INR 150 crores worth of equipment is currently in transit or awaiting dispatch at ports, with management expecting this position to improve within 4-6 weeks. Increased 'other expenses' were largely attributed to royalty payments for advanced technology products like EMbaffle and Helix heat exchangers, which are built into project estimations and thus do not impact EBITDA. The average other expenses are expected to normalize to 19-20% of sales.

Market Diversification and International Presence

Anup Engineering is actively pursuing market diversification, with export revenue accounting for 56% of H1 FY26 consolidated revenue. The company has established an official presence in Dubai with a dedicated sales and marketing head for the EME region and plans to open an office in Houston, U.S., next. Sectoral revenue distribution saw oil and gas at 42%, petrochemicals at 30%, and fertilizer and chemicals at 18%. The company also secured its first direct order in the power sector from a European customer and its first order for a non-process equipment product (critical power turbine component), marking significant diversification milestones.

US Market Strategy Amidst Tariff Uncertainty

Regarding the US market, management clarified that direct exports to the US were minimal in the current year, with projections having discounted US business due to tariff uncertainties. However, the company is in discussions with US customers for new inquiries, with hopes that tariffs will normalize within approximately three months. While the US market offers significant potential, the company's strategic expansion prioritizes the Middle East (where it has established a strong presence in Abu Dhabi, Oman, Kuwait, and Dubai) before a full-fledged entry into the US, aiming to cater to local customers not served by large EPC contractors.

Long-Term Growth Outlook and Order Pipeline

The company maintains its guidance for the current financial year and aims for a long-term organic growth rate of 20-25% beyond INR 1,000 crores in revenue, considering the industry's nature. The global inquiry pipeline remains robust at approximately INR 1,100 crores, with an expected average range of INR 1,100-1,200 crores for the next 6-7 months. Management targets a fresh order intake of INR 200-250 crores every quarter and aims to start FY27 with an opening order book of INR 700-750 crores, covering 75-80% of the year's revenue plan, while reserving 20-25% capacity for short-term, profitable orders.

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