Concall AI

The Anup Engineering Limited — Q3 FY25 earnings call

Call held 31 Jan 2025

Management summary

The Anup Engineering Limited delivered a strong performance in Q3 FY25, with revenue growing 33% YoY to ₹170.9 crores and PAT increasing 55% YoY to ₹31.4 crores. For the nine-month period ending December 2024, revenue reached ₹503 crores, a 28% growth, with PAT at ₹87.5 crores, up 44.8%. The company is on track to achieve its FY25 guidance of 30% revenue growth and 23% EBITDA margin, supported by a robust order book and strategic capacity expansions, particularly at its Kheda facility.

Highlights

Q3 FY25 Revenue: ₹170.9 crores, up 33% YoY.
Q3 FY25 EBITDA: ₹40.2 crores, 23.6% margin, up 34% YoY.
Q3 FY25 PAT: ₹31.4 crores, 18.4% margin, up 55% YoY.
9M FY25 Revenue: ₹503 crores, up 28% YoY.
9M FY25 EBITDA: ₹115.9 crores, 23% margin, up 29.7% YoY.
9M FY25 PAT: ₹87.5 crores, 17.4% margin, up 44.8% YoY.
Exports for the nine-month period grew 51%, expected to close FY25 over 50%.
Current pending order book stands at ₹831 crores.

Key financials

3 periods

Headline

Net Cash
₹35.6 Cr
Working Capital
3.9 tonnes

Q3 FY25

Revenue
₹170.9 Cr
YoY +33%
EBITDA
₹40.2 Cr
YoY +34%
EBITDA Margin
23.6%
PAT
₹31.4 Cr
YoY +55%

9M

FY25 Revenue
₹503 Cr
YoY +28%
FY25 EBITDA
₹115.9 Cr
YoY +29.7%
FY25 EBITDA Margin
23%
FY25 PAT
₹87.5 Cr
YoY +44.8%

What they filed

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

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	188	171	205	169	233 +24%	193 +13%	195 −5%	118 −30%
Expenses	145	131	159	130	181	150	159	108
EBITDA	43	40	46	39	51 +19%	43 +5%	36 −22%	9 −76%
Margin	23%	24%	22%	23%	22%	22%	19%	8%
Other income	1	1	1	2	0	-1	1	1
Interest	1	1	1	1	2	3	2	1
Depreciation	6	6	6	6	7	7	7	7
Profit before tax	38	34	40	34	43 +14%	31 −9%	27 −32%	1 −96%
Tax rate	14%	8%	27%	26%	26%	21%	6%	8%
Net profit	32	31	29	26	32 −1%	25 −21%	25 −13%	1 −96%
EPS	16.15	15.66	14.64	12.75	15.99	12.34	12.71	0.55

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.

Guidance & targets

Revenue

FY25 Revenue Growth Revenue · FY25 · High confidence around 30%

This performance of the period ending December 2024 should give us a good confidence of achieving our plan for this year, that is around 30% growth with an EBITDA of around 23%.

— Mr. Reginaldo Dsouza, Managing Director
Mabel Engineers FY25 Revenue Revenue · FY25 · High confidence around Rs. 50 crores

And with delivery is planned for Q4, we should be on plan for around Rs. 50 crores revenue that we have planned for Mabel Engineers.

— Mr. Reginaldo Dsouza, Managing Director
FY26 Revenue Growth Revenue · FY26 · High confidence 25% to 30%

So, our guidance for the next year, FY '26, continues to be at 25% to 30% revenue growth, and with an EBITDA of over 20%.

— Mr. Reginaldo Dsouza, Managing Director
Consolidated FY25 Revenue Revenue · FY25 · High confidence Rs. 750 crores

Okay. So, what you are saying is, the chances are consolidated number for March '25 will be Rs. 750 crores? That's correct.

— Mr. Reginaldo Dsouza, Managing Director

Profitability

FY25 EBITDA Margin Profitability · FY25 · High confidence around 23%

This performance of the period ending December 2024 should give us a good confidence of achieving our plan for this year, that is around 30% growth with an EBITDA of around 23%.

— Mr. Reginaldo Dsouza, Managing Director
Mabel Engineers FY25 EBITDA Profitability · FY25 · High confidence about 15%

most of the revenue will be booked in Quarter 4, which will get us back to close to about Rs. 50 crores revenue from Mable which we have planned, and close to about 15% EBITDA.

— Mr. Reginaldo Dsouza, Managing Director
FY26 EBITDA Margin Profitability · FY26 · High confidence over 20%

So, our guidance for the next year, FY '26, continues to be at 25% to 30% revenue growth, and with an EBITDA of over 20%.

— Mr. Reginaldo Dsouza, Managing Director

Exports

FY25 Exports Share Exports · FY25 · High confidence over 50%

The pure exports have seen good growth for the period at 51% and we should be closing the year with exports of over 50%.

— Mr. Reginaldo Dsouza, Managing Director
FY26 Exports Share Exports · FY26 · High confidence 50% to 55%

Exports will be in the range of 50% to 55%.

— Mr. Reginaldo Dsouza, Managing Director

Capacity

Kheda Phase 1 & 2 Revenue Potential Capacity · FY26 · High confidence Rs. 400 crores

So, with this, we will have, in all three complete bays and one open yard at Kheda, capable of delivering about Rs. 40 crores per year. This will be about 33% of our master plan for Kheda, which is to have seven manufacturing bays. So, at seven manufacturing bays that plant should deliver somewhere around Rs. 1,200 crores, and that's how this Rs. 400 crores with Phase 1, and Phase-2 would be about 33% of our total master plan.

— Mr. Reginaldo Dsouza, Managing Director
Total Installed Capacity (Ahmedabad, Kheda, Tamil Nadu) Capacity · Ongoing · High confidence Rs. 1,100 crores to Rs. 1,200 crores per year

With these installed capacities at our manufacturing locations that is in Ahmedabad, Kheda and Tamil Nadu, we have a capacity capable of delivering revenues up to Rs. 1,100 crores to Rs. 1200 crores per year, depending on the product mix on the order book.

— Mr. Reginaldo Dsouza, Managing Director

Order Book

Opening Order Book for FY26 Order Book · FY26 · High confidence about Rs. 600 crores

And considering our plan for this financial year, it means we have an opening order book of about Rs. 600 crores executable in the next financial year, 2026.

— Mr. Reginaldo Dsouza, Managing Director

Order Inflow

Quarterly Export Order Intake Order Inflow · Quarterly · Medium confidence Rs. 110 crores or Rs. 115 crores per quarter

So, on the export side, we should be getting traction over a quarter close to about Rs. 110 crores or Rs. 115 crores per quarter.

— Mr. Reginaldo Dsouza, Managing Director

Order Conversion

Lead Time (Order to Revenue) Order Conversion · Ongoing · High confidence 11 to 12 months average

Okay. So, as of today, the product portfolio that we deal with, it is anywhere between 11 to 12 months, average. Some products could be 8 to 10 months, some could be 12 to 14 months on an average 11 to 12 months.

— Mr. Reginaldo Dsouza, Managing Director

Revenue Mix

Hydrogen Contribution to Growth Revenue Mix · Ongoing · High confidence 20% to 30%

So, hydrogen, I believe, will continue to be about 20% to 30% kind of a contribution in our growth journey.

— Mr. Reginaldo Dsouza, Managing Director

Risks & concerns

Geopolitical developments, wars, policy changes, and trade tariffs impacting global economies and trade decisions.
medium

Management noted these factors have delayed decisions on interesting projects and they are cautious of geopolitics and trade impact.

Management acknowledged
Competitive landscape and aggression in the market to bag orders.
medium

The company is watchful of the competitive landscape in India and market aggression.

Management acknowledged
Impact of US administration's stance on renewable energy and IRA disbursements on hydrogen projects.
medium

Management stated it's too early to comment on policies but believes industrial hydrogen is resilient, with end-users watchful of tariff structures.

Both acknowledged
Feedstock availability issues at customer's end leading to order descoping/cancellation.
low

One large export order was descoped by Rs. 60 crores due to feedstock issues at the customer's end, but margins were safeguarded and slots filled.

Management acknowledged

Q&A highlights

3 direct

Export order cancellation and impact on order backlog Direct

There was a large order which we have booked close to about Rs. 20-odd crores and there was descoping and there was a short closure of the order by about Rs. 60 crores, and that's the reason you are seeing that in exports. But of course, we have safeguarded our margins, and we could quickly continue our order booking and fill those slots from some domestic and some international markets.

Reveals a specific project cancellation risk and management's ability to mitigate its financial impact and replace orders.

Asked by Jaiveer Shekhawat

Kheda capacity expansion and consolidated FY25 revenue target Direct

So, when you look at the end of probably September of this year where we will have that commissioned, we will have three complete bays of 200 meters long covered under roof, and one open yard. So, effectively four bays, three covered, one open yard, and that should give us a revenue of close to about Rs. 400 crores. ... consolidated number for March '25 will be Rs. 750 crores? That's correct.

Clarifies the revenue potential from the Kheda expansion and confirms the overall consolidated revenue target for the current fiscal year, providing clear growth drivers.

Asked by Mohit Surana / Vikram

Impact of US administration's stance on renewable energy and IRA disbursements on hydrogen business Direct

Now what we understand from our customers is whatever orders that we are executing, these are large multinationals and end users basically. So, they have invested their own fund to get this project going. ... I believe hydrogen is here to stay, we all know. We are talking about industrial hydrogen gas. And we do not see any projects. In fact, in Europe, we are getting good opportunities in hydrogen at the moment.

Addresses a significant geopolitical and policy risk for a key growth segment (hydrogen) and management's strategy to navigate it, highlighting resilience and diversification.

Asked by Shyam Maheshwari

3 min read 6 chapters

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.

This is an AI-generated summary of a publicly available earnings call transcript.

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