The Anup Enginee

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.

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.

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.

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.

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.

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.