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The Anup Engineering Limited — Q3 FY26 earnings call

Call held 4 Feb 2026

Management summary

The Anup Engineering Limited reported strong revenue and EBITDA growth for Q3 and 9M FY26, driven by domestic market traction and new segment entries. While PAT percentage saw a slight decline due to higher working capital and associated interest costs, the company remains optimistic about future growth, backed by a robust inquiry pipeline and strategic diversification into nuclear and thermal power. Management expects working capital to improve and aims to maintain healthy EBITDA margins.

Highlights

Q3 FY26 consolidated revenue of INR206.9 crores, a growth of 20.3% quarter-on-quarter.
9M FY26 consolidated revenue of INR614.4 crores, a growth of 20.2% year-on-year.
9M FY26 EBITDA of INR135.9 crores, a growth of 17.5% year-on-year.
Successful entry into the nuclear business with an order for NPCIL Kaiga project (INR20-30 crores).
Entry into the thermal power business with an order for NTPC project (INR20-30 crores) and visibility for 3 more large projects.
Completion of Kheda Phase 2 expansion, increasing plant capacity to generate INR450 crores revenue per year.

Concerns

9M FY26 PAT percentage level was 2.4% lower year-on-year, primarily due to a 0.6% increase in interest and financing costs from higher working capital.
Average working capital was INR367 crores at 2.2 turns, higher than the expected 3 turns.
Other expenses increased to 24.5% of revenue (vs 18% YoY) due to higher royalty, labor, subcontracting, contractual, and freight costs.
Q3 FY26 EBITDA growth of 13% QoQ was lower than revenue growth of 20.3% QoQ, indicating some margin compression.

Key financials

3 periods

Headline

ROCE
21.2%
Average Working Capital
₹367 Cr

Q3 FY26

Consolidated Revenue
₹206.9 Cr
QoQ +20.3%
EBITDA
₹44.1 Cr
QoQ +13%

9M

FY26 Consolidated Revenue
₹614.4 Cr
YoY +20.2%
FY26 EBITDA
₹135.9 Cr
YoY +17.5%
FY26 PBT
₹112 Cr
YoY +12.2%
FY26 PAT
₹85.3 Cr
YoY +2.3%

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.

Segment breakdown

YTD Revenue by Location
₹405 Cr Ahmedabad Plant Revenue₹186 Cr Kheda Plant Revenue₹23 Cr Mabel Engineers Revenue
9M FY26 Revenue by Industry Sector
73% Oil and Gas & Petrochemicals Revenue Share
9M FY26 Revenue by Product Portfolio
57% Heat Exchangers Revenue Share7% Silos and Centrifuge Revenue Share Increase

Order book

high confidence

Total value

₹550 Cr

as of 2025-12-31 quantified

Execution

about INR300 crores plus worth orders for execution in the next financial year, that is FY '27.

Composition

Mix 2 geographies

Domestic 40%
Exports 60%

Share of order book by geography

Pipeline

qualified rfp

Firm inquiry pipeline

The pending order book is INR550 crores, with a strong inquiry pipeline of INR1,100 crores, indicating good future opportunities, especially with domestic traction and the U.S. trade deal.

Source: Prepared remarks

Capital allocation

high confidence

Capex Capex disclosed
- Phase 2 expansion at Kheda, adding 20,000 square meters of fabrication area (5,000 sq meters open yard)
On the capex front, we have completed the Phase 2 expansion at Kheda. And with this, we now have 20,000 square meters of fabrication area, out of which 5,000 square meters is an open yard.

Guidance & targets

Revenue

Revenue Growth Revenue · FY26 · High confidence 15% to 20%

Therefore, considering overall macro factors, we continue to maintain our guidance for this year of revenue growth of 15% to 20% and EBITDA in the range of 22% with exports of over 50%.

— Reginaldo D'Souza

Profitability

EBITDA Margin Profitability · FY26 · High confidence 22%

Therefore, considering overall macro factors, we continue to maintain our guidance for this year of revenue growth of 15% to 20% and EBITDA in the range of 22% with exports of over 50%.

— Reginaldo D'Souza
EBITDA Margins Profitability · Going forward · High confidence 20%+

And going forward, as I mentioned in the past, our endeavor would always be to maintain our EBITDA margins of 20%-plus.

— Reginaldo D'Souza
High-Volume Products EBITDA Profitability · Ongoing · High confidence 15%

In terms of high-volume, which we said it is in the framework of ACACS, PSA Adsorber vessels, maybe some sort of skids and modules, this again is in the framework of EBITDA of 15%.

— Reginaldo D'Souza
Short Cycle, High Volume Equipment Margin Profitability · Ongoing · High confidence 15-18%

They would be, as I mentioned earlier too, they should be around 15% to 18% margin profile.

— Reginaldo D'Souza

Exports

Exports Share of Revenue Exports · FY26 · High confidence over 50%

Therefore, considering overall macro factors, we continue to maintain our guidance for this year of revenue growth of 15% to 20% and EBITDA in the range of 22% with exports of over 50%.

— Reginaldo D'Souza

Order Book

Year-End Order Book Order Book · FY26 · Medium confidence close to INR600 crores

So as I mentioned this on the earlier question, of course, our target would be much higher than that, but we expect it to close at the current rate, close to about INR600 crores.

— Reginaldo D'Souza

Order Inflow

Order Intake (3-month block) Order Inflow · Ongoing · High confidence INR200 crores to INR250 crores

Our expected order intake on a 3-month block period is roughly about INR200 crores to INR250 crores.

— Reginaldo D'Souza

Business Vertical

Anup Technical Services Turnover Business Vertical · next 2-3 years · High confidence INR200 crores to INR300 crores

And at the same time, the Anup Technical Services, which is a high profitable business, which we have forecasted that it should be, in 2 to 3 years, close to INR200 crores to INR300 crores kind of a business for us.

— Reginaldo D'Souza

Working Capital

Working Capital Turns Working Capital · by the year-end · High confidence 3 or a little higher

Previously 2.2 → 3 or a little higher

We expect it to be closer to average working capital turns of 3 or a little higher by the year-end.

— Reginaldo D'Souza

Interest Cost

PAT Percentage Level (Interest & Financing Cost) Interest Cost · Q4 · High confidence 1% to 1.1%

So even for quarter 4, we would be able to maintain it at this level. As you know it was higher because we had a higher working capital. We have forecasted for the quarter 4 and we expect this to remain at this level of around 1% to 1.1%.

— Reginaldo D'Souza

What to watch in Q4 FY26

Order book growth and conversion from inquiry pipeline

next quarter

Current Pending order book INR550 crores; inquiry pipeline INR1,100 crores

Target Improved finalization rate and higher order intake

Why it matters

Order book conversion is key to sustaining revenue growth, especially with the strong inquiry pipeline and resolution of trade uncertainties.

I'm pretty sure the finalizations should go forward in the coming months and we should be able to hit a strike rate much better than what we have done in the past.

Risks & concerns

Global geopolitical events and trade uncertainties
medium

Geopolitical events, trade agreements, and anxieties over aggression between countries have impacted business sentiment and delayed finalization of inquiries, especially for exports.

Management acknowledged
Higher working capital leading to increased interest costs
medium

Average working capital at INR367 crores (2.2 turns) is higher than expected, contributing to a 0.6% increase in interest and financing costs, impacting PAT percentage.

Management acknowledged
Margin pressure from product mix and competition
medium

Shift towards scaling up high-volume, lower-margin products (e.g., 15% EBITDA for ACACS) and increased competition in a demand-down market could pull overall EBITDA margins lower.

Management acknowledged

Q&A highlights

8 direct

Impact of India-U.S. trade deal on U.S. order booking and pipeline Direct

So now with this trade deal in place, I think there is far more certainty in terms of what would be the landed cost for our customers. And we surely hope and are confident that the discussions will reignite now for all the projects that were basically stalled for a few quarters now.

Clarifies the positive impact of the trade deal on a previously stalled export market, indicating potential for significant new order inflows from the U.S.

Asked by Chetan Vora

Order book status and visibility for FY27 growth given current INR550 crores backlog Direct

If you look at the pending inquiry book position of INR1,100 crores, this is one of the best that we ever had. We our bests have been close to INR1,100 crores to INR1,200 crores inquiry bank positions. The problem was finalizations of those inquiries because of these uncertainties.

Addresses concerns about a lower current order book by highlighting a strong inquiry pipeline, suggesting that previous uncertainties were the main hurdle to conversion, which is now expected to improve.

Asked by Chetan Vora

Strategic entry into new business verticals (Nuclear, Thermal Power, Precision Components) Direct

And at the same time, the Anup Technical Services, which is a high profitable business, which we have forecasted that it should be, in 2 to 3 years, close to INR200 crores to INR300 crores kind of a business for us. It's about 40% margin business.

Details the company's diversification strategy beyond traditional segments, outlining specific revenue and margin targets for these new, high-potential areas, which are crucial for future growth.

Asked by Mohit Surana

Working capital management and target for cash conversion cycle Direct

So based on our workings and projections, I think quarter 1 should be the time where we should come back to we should end the year maybe close to 3 the sum should be a clear between 3 to 4 turns.

Provides a clear timeline and target for improving working capital efficiency, which is a key concern given its impact on PAT percentage.

Asked by Sonal Minhas

Impact of Chinese competition in the context of new investments in Asia Direct

So Ashish, for the kind of products that we deal with, I don't think so we will have that competition on 2 fronts. Basically, one is, of course, the kind of equipment that we make are quite voluminous. So from that perspective, the transportation cost is generally huge. And on the second front, most of the material that we use is all indigenously available in India today for us.

Reassures investors about competitive advantages against Chinese players, citing logistical barriers for voluminous products and indigenous material sourcing, especially relevant for PSU orders under 'Make in India'.

Asked by Ashish Duggal

Q3 FY26 QoQ revenue and profitability decline Direct

So Saket, if you look at historically, quarter 3 is always a weaker quarter for us from the perspective of number of days because there are a lot of festivals around that time in the manufacturing zone that we are in. And if you look at our historical plan, we generally plan it with quarter 3 at that number.

Explains the QoQ dip as a seasonal and planned occurrence due to fewer working days in Q3, aligning with historical patterns rather than indicating a fundamental business slowdown.

Asked by Saket Kapoor

Strategy for balancing short-cycle, high-volume equipment with large-cycle, high-tonnage capacity at Kheda Direct

So all these small cycle time items generally would be smaller in size and they would be made here, and the larger cycle times which are generally larger in sizes will be focused to be made in Kheda. However, having said that, as I said, there are three bays in Kheda with closed and one open yard. Open yard is where the place is where we can make all these small cycle time items if required.

Clarifies how the company leverages its different facilities (Odhav for smaller, short-cycle items and Kheda for larger, long-cycle items) to optimize production and manage logistics, demonstrating a coherent capacity utilization strategy.

Asked by Varun Mishra

Update on U.S. receivables Direct

So we had balance about INR30 crores receivable from that for the equipment that we had already made it ready, out of which already 50% has come in and we expect that the balance to come in next month. Sorry, this month, not next. February, we're already into February.

Provides a specific update on the recovery of outstanding receivables, indicating a positive resolution to a previously mentioned working capital item.

Asked by Ganeshram

3 min read 6 chapters

Detailed narrative

Q3 and 9M FY26 Financial Performance Overview

The Anup Engineering Limited reported a consolidated revenue of INR206.9 crores for Q3 FY26, marking a 20.3% quarter-on-quarter growth. For the nine-month period ending December (9M FY26), consolidated revenue reached INR614.4 crores, a 20.2% year-on-year increase, with EBITDA growing 17.5% YoY to INR135.9 crores. Despite this, the Profit After Tax (PAT) percentage level was 2.4% lower YoY, primarily attributed to a 0.6% increase in interest and financing costs due to higher working capital and a 0.9% tax change related to ESOPs in the prior year. The company's Return on Capital Employed (ROCE) stood at 21.2%.

Order Book and Inquiry Pipeline Strength

The company's pending order book as of December 31, 2025, stood at INR550 crores. Management noted a robust firm inquiry pipeline of approximately INR1,100 crores, which is among the highest the company has ever recorded. This pipeline is composed of roughly 60% exports and 40% domestic inquiries. The management expects improved finalization rates for these inquiries in the coming months, particularly with the clarity provided by the India-U.S. trade deal, which is anticipated to reignite discussions for previously stalled U.S.-bound projects.

Strategic Diversification into New Business Verticals

Anup Engineering has successfully entered new high-potential business verticals. This includes securing an order worth INR20-30 crores for the NPCIL Kaiga project, marking its entry into the nuclear business. The company also bagged an order of INR20-30 crores for NTPC's thermal power project, with expectations for three more large projects in the near future. Additionally, an order from GE for precision machine components provides 2-3 years of visibility. The Anup Technical Services business, a high-profitability vertical, has booked its 10th order in six months and is projected to achieve INR200-300 crores in turnover within the next 2-3 years with 40% margins.

Working Capital Management and Cost Structure

Working capital management remains a key focus, with the average working capital at INR367 crores, translating to 2.2 turns, which is higher than the expected 3 turns. This was mainly due to lower customer advances and higher debtors from long-cycle orders. The company aims to improve working capital turns to 3 or higher by year-end. Other expenses increased to 24.5% of revenue (from 18% YoY), driven by higher royalty (1.3%), labor and subcontracting (1.5%), contractual expenses (2.2%), and freight costs (0.5%). Management stated these costs are factored into their plans and estimations.

Capacity Expansion and Utilization Strategy

The Phase 2 expansion at the Kheda plant has been completed, adding 20,000 square meters of fabrication area, including 5,000 square meters of open yard. This expansion increases Kheda's annual revenue generation capacity to INR450 crores based on the product mix. The company does not foresee any major capex for organic growth in the near future, as existing capacities are deemed sufficient for FY27 growth plans. The strategy involves utilizing the Odhav plant for smaller, short-cycle, high-volume items (e.g., ACACS, PSA adsorber vessels) and the Kheda plant for larger, long-cycle, high-tonnage equipment, leveraging logistical advantages.

Market Outlook and Competitive Positioning

The company observes good traction in both Middle East and domestic markets, with the India-U.S. trade deal expected to open new opportunities. Exports constituted 53.4% of revenue (INR328 crores) in 9M FY26, with oil and gas and petrochemicals dominating at 73% of revenue. Despite increased competition and margin pressure in a demand-down market, Anup Engineering aims to maintain EBITDA margins of 20%+ going forward. The company believes its indigenous material sourcing and ability to handle voluminous equipment provide a competitive edge against international players, particularly for PSU projects under 'Make in India' initiatives.

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

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