Detailed Narrative
Strong Q3 and 9M FY25 Performance
The Anup Engineering Limited reported robust financial results for Q3 FY25, with revenue growing 33% year-on-year to ₹170.9 crores and EBITDA increasing 34% year-on-year to ₹40.2 crores, achieving a 23.6% margin. Profit After Tax (PAT) saw a significant 55% year-on-year growth, reaching ₹31.4 crores with an 18.4% margin. For the nine-month period ending December 2024, revenue stood at ₹503 crores (up 28% YoY), EBITDA at ₹115.9 crores (23% margin, up 29.7% YoY), and PAT at ₹87.5 crores (17.4% margin, up 44.8% YoY). The company attributes the higher PAT growth to lower tax rates from reversals and ESOP exercises.
Strategic Capacity Expansion and Utilization
The company has commenced construction for Phase-2 at its Kheda facility, which will add one complete bay and one open yard, expected to be operational by Q3 FY26. This expansion will contribute to a total revenue potential of ₹400 crores from Kheda's Phase 1 and 2, representing 33% of the overall master plan for Kheda, which targets ₹1,200 crores from seven manufacturing bays. Currently, the combined installed capacity across Ahmedabad, Kheda, and Tamil Nadu is capable of delivering revenues between ₹1,100 crores to ₹1,200 crores per year. Capacity utilization, including the new Kheda capacity, stands at a healthy 70-75%.
Robust Order Book and Positive Growth Outlook
The pending order book as of the call date is encouraging at ₹831 crores, with an opening order book of approximately ₹600 crores executable into FY26. The company maintains its FY25 guidance of 30% revenue growth and 23% EBITDA margin, projecting a consolidated revenue of ₹750 crores for FY25. For FY26, guidance remains strong with 25-30% revenue growth and over 20% EBITDA, with exports expected to contribute 50-55%. The average lead time from order booking to revenue recognition is 11-12 months.
Diversified Sectoral Revenue and Export Focus
The sectoral revenue mix for Q3 FY25 was notably diversified, with hydrogen contributing 45%, petrochemicals 20%, oil and gas 17%, and fertilizers 14%. Exports have shown strong growth, up 51% for the nine-month period, and are expected to exceed 50% of total revenue for FY25. The company is actively pursuing export opportunities, particularly in hydrogen projects in the US, Canada, and Europe, and gas projects in the Middle East. Domestic growth is anticipated from private petrochemical players like Reliance and Adani, with PSU refinery and petrochemical projects expected to surface in the next 6-8 months.
Mabel Engineers Integration and Contribution
Mabel Engineers recorded negligible revenue in Q3 FY25 as most projects were scheduled for Q4 delivery. The company expects Mabel to contribute approximately ₹50 crores in revenue for FY25, with an EBITDA margin of about 15%. A significant order for Reliance is currently being executed and will largely be booked in Q4. The integration of Mabel Engineers is stabilizing, contributing to the overall manufacturing capabilities across Ahmedabad, Kheda, and Tamil Nadu.
Strategic Initiatives and Risk Management
Anup Engineering is making strategic inroads into critical equipment business, having delivered its first chrome moly vanadium modified material equipment and commenced manufacturing its highest-value single equipment (over ₹40 crores) at Kheda for an export customer. The company is exploring new products and service verticals for diversification. Management acknowledges global risks such as geopolitics, trade tariffs, and competitive aggression, adopting a cautious and vigilant approach. They also confirmed being net debt-free and funding all expansions through internal accruals.