The Anup Engineering Limited — Q4 FY26 earnings call

Call held 28 May 2026

Management summary

The Anup Engineering Limited reported a challenging yet resilient FY26, achieving consolidated revenue of INR822.3 crores and EBITDA of INR174.2 crores. Despite macro headwinds, the company maintained strong margins and expanded capacity with the completion of Kheda Phase 2. While Q4 saw margin pressure and a negative cash position, management is optimistic about future order book conversion and strategic diversification into new segments like nuclear and skids, aiming for improved financials.

Highlights

  • Consolidated revenue for FY26 was INR822.3 crores.

  • EBITDA for FY26 was INR174.2 crores, achieving an impressive 21.2% normalized margin despite cost pressures.

  • The pending order book stands at INR770 crores for FY27, with a strong inquiry pipeline of INR1,200 crores.

  • Kheda Phase 2 expansion completed, boosting capacity to 8,000 metric tons/year, expected to generate INR400-450 crores in revenue.

  • Successfully entered new strategic segments with first orders in nuclear, thermal power, manufacturing skids, and air heaters.

Concerns

  • Q4 EBITDA margins were lower than Q-on-Q and the blended FY26 average due to order mix and execution challenges.

  • Cash position was negative INR73 crores at March end, though expected to become cash positive by May end.

  • Working capital turns were 2.3, below the target of 3 turns, impacted by higher debtors and lower customer advances.

  • Raw material price volatility and shipping challenges (Strait of Hormuz closure) impacted execution and logistics costs.

Key financials

  1. Consolidated Revenue ₹822.3 Cr
  2. Consolidated EBITDA ₹174.2 Cr
  3. Consolidated EBITDA Margin 21.2%
  4. Working Capital Turns 2.3 turns
  5. Standalone Q4 Revenue ₹195 Cr
  6. Standalone Q4 Profitability ₹27 Cr

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.

Order book

high confidence

Total value

₹770 Cr

as of 2026-05-28 quantified

Inflow this quarter

₹190 Cr

Execution

long cycle average of about 12 months

Composition

Mix 5 industries
  • Oil & Gas 39%
  • Petrochemicals 32%
  • Fertilizer 9%
  • Hydrogen 8%
  • Others 12%

Share of order book by industry

Pipeline

qualified rfp

Inquiry pipeline

Management is judicious in booking new orders, prioritizing healthy margins and risk protection, and is waiting for raw material prices to normalize.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • Kheda Phase 2 expansion for capacity increase to 8,000 metric tons/year
    On the capacity expansion plan, we have completed our Phase 2 expansion at Kheda, increasing the capacity to about 8,000 metric tons per year from Kheda, which shall generate a revenue of about INR400 crores to INR450 crores depending on the product mix.
  • Debt Net cash ₹11 Cr
    The cash position, which was negative INR73 crores as on March end, including long-term debt of INR52 crores as on today is about minus INR11 crores and expected to be cash positive by end of this month, including long-term debt as substantial collections are planned.
  • Liquidity Cash ₹-11 Cr Cash position was negative INR73 crores at March end, including long-term debt of INR52 crores. It is currently negative INR11 crores and expected to be cash positive by end of May 2026 due to substantial collections.
    The cash position, which was negative INR73 crores as on March end, including long-term debt of INR52 crores as on today is about minus INR11 crores and expected to be cash positive by end of this month, including long-term debt as substantial collections are planned.

Guidance & targets

Profitability

  • Technical Services Margins Profitability · Ongoing · High confidence 40%
    On 2 counts, mainly, as I said, this is a very, very profitable business. We can expect to the tune of 40% margins, as I mentioned in my last call.

    — Reginaldo Dsouza

Revenue

  • Technical Services Revenue Revenue · next 3 years · High confidence INR200 crores
    And as I mentioned, the strategy is to grow this vertical to about INR200 crores in the next 3 years horizon.

    — Reginaldo Dsouza

Working Capital

  • Working Capital Turns Working Capital · Ongoing · High confidence 3 turns
    The average working capital was at 2.3 turns. Of course, this could have been better. We would like to maintain it about 3 turns.

    — Reginaldo Dsouza

Capacity

  • Kheda Plant Revenue Potential Capacity · Annual · High confidence INR400-450 crores
    On the capacity expansion plan, we have completed our Phase 2 expansion at Kheda, increasing the capacity to about 8,000 metric tons per year from Kheda, which shall generate a revenue of about INR400 crores to INR450 crores depending on the product mix.

    — Reginaldo Dsouza

  • Total Revenue Potential Capacity · Annual · High confidence INR1,200 crores
    With these installed capacities at our key manufacturing locations that is Ahmedabad, Kheda and Mabel Engineers, we have a capacity capable of delivering revenue up to INR1,200 crores per year.

    — Reginaldo Dsouza

Order Book

  • Inquiry Pipeline Conversion Rate Order Book · Ongoing · High confidence 20%
    And we expect the conversion rate of about 20%. That's what we normally like to keep the conversion rate of around 20% for better profitability.

    — Reginaldo Dsouza

Product Development

  • New Products Product Development · this financial year · Medium confidence 2 more products
    All going well, we should be adding 2 more products of critical and complex nature to our product portfolio in this financial year.

    — Reginaldo Dsouza

Order Booking

  • Skid Packages Booked Order Booking · in a year · Medium confidence 4-5 packages
    So we expect that in a year, we should be able to get at least 4 to 5 such packages going forward once we complete and generate this PTR in the market.

    — Reginaldo Dsouza

What to watch in Q1 FY27

Raw material price normalization

next couple of months
Current Elevated and volatile
Target Normalization of prices

Why it matters

Normalization of raw material prices is crucial for protecting margins on fixed-price contracts and enabling new order bookings.

So I would put it that let's wait for the condition to settle before we come back with a clear profile in terms of revenue and margins.

Risks & concerns

  • Raw material price volatility

    high

    Volatile raw material pricing, especially steel, poses a significant challenge for fixed-price contracts and impacts profitability.

    Management acknowledged

  • Shipping challenges and logistics costs

    medium

    Closure of the main sea route and non-availability of shipping lines due to geopolitical events impact logistics costs and dispatch flow.

    Management acknowledged

  • Geopolitical uncertainties

    medium

    Geopolitics, wars, and trade tariffs create an uncertain global business environment, affecting energy supply and overall economic stability.

    Management acknowledged

  • Working capital deterioration

    medium

    Working capital turns were 2.3, below the target of 3, due to lower customer advances and higher debtors, impacting cash flow.

    Management acknowledged

Q&A highlights

6 direct, 2 evasive
Q4 margin decline and FY27 revenue/margin expectations Evasive
So I think it would be apt and prompt for us to give a couple of months for the clarity to emerge, because the whole situation today being so volatile, it's important that we protect our margins and take, as I mentioned, judicious calls in terms of the new order booking. So I would put it that let's wait for the condition to settle before we come back with a clear profile in terms of revenue and margins.

Management deferred providing FY27 guidance due to market volatility, indicating caution on future outlook.

Asked by Saket Kapoor

Impact of fixed price contracts and raw material inflation Direct
Since we have a cushion in terms of the deliveries, we are timing. So I would use the strategy of timing the raw material to get the best profitability on project over project. So it's more about timing. Of course, there is a limit to which we can wait. That's the reason I said let's wait for a couple of months for the clarity to emerge.

Management explained their strategy of timing raw material procurement for fixed-price contracts to protect margins amidst inflation.

Asked by Saket Kapoor

Raw material alignment for current order book Direct
About INR250 crores is where we still wait for the material, rest all the raw material is secured.

Management quantified the portion of the current order book (INR250 crores out of INR769 crores) that is still exposed to raw material price volatility.

Asked by Saket Kapoor

FY27 revenue and EBITDA margin guidance Evasive
I would love to make that declaration here. But I think considering our order book position at this point, which is roughly about INR770 crores and an inquiry pipeline of close to about INR1,200 crores, we are very confident of booking the orders to be able to execute in this year. But what I believe is, I think, it all depends on because even if I book orders, if I'm not able to purchase the raw material because of the current volatile pricing, execution could come under challenge.

Management reiterated their reluctance to provide specific FY27 guidance, emphasizing the uncertainty of raw material pricing and its impact on execution.

Asked by Aashna

Inclusion of price variability clause in contracts Direct
No price variability clause in our contracts. Historically, it has never been. And as you know, we have 2 modes. One is the tender business, of course, where there is absolutely no price variability. And second is negotiable bids, which are through private EPCs and end users.

Management clarified that their contracts are fixed-price, making them vulnerable to raw material price fluctuations if not managed strategically.

Asked by Aashna

Order booking for Q4 FY26 and total FY26 Direct
So if you look at our order book position for the year was INR704 crores for the entire year, new order booking. And we've added another INR190 crores in the last 2 months. So that's our current order book position. Pending order book position remains at INR769 crores.

Management provided clarity on the order booking figures for the quarter (INR190 crores) and the full fiscal year (INR704 crores), distinguishing it from the current pending order book.

Asked by Jinesh Gandhi

Diversification of product lines Direct
One is, of course, the volume business where the margin profile would be around 15% EBITDA margins, but the volume, it will be short-cycle jobs like the air cool heat exchangers that we want to diversify and good news that we have already backed the order and we are executing. Second is on the nuclear side, which we wanted to diversify that also we've already backed an order and it is under execution. And the third is, of course, on the technical services front and the engineering services, which we made some good inroads.

Management outlined three key areas for product diversification: volume business (air cool heat exchangers), nuclear, and technical services, highlighting their strategic focus beyond traditional products.

Asked by Jinesh Gandhi

Debt and working capital management Direct
Now if you look at the current position, out of that roughly about INR260 crores was which was billed at us towards the end of the quarter, where receivables due was in the month after March, April and May. Those have already started coming in, and you are very clearly seeing that reflection in our cash position.

Management explained the improvement in cash position post-March, attributing it to the collection of receivables that were due in the subsequent months.

Asked by Saket Kapoor

2 min read 6 chapters

Detailed narrative

FY26 Financial Performance Overview

The Anup Engineering Limited reported a consolidated revenue of INR822.3 crores for FY26, alongside an EBITDA of INR174.2 crores. This translates to a normalized EBITDA margin of 21.2% for the year, achieved despite significant pressure from elevated input costs and execution challenges. The company emphasized a sharp focus on cost management and timely course corrections as key factors in maintaining these financials.

Order Book and Pipeline Dynamics

As of May 28, 2026, the company holds a pending order book of approximately INR770 crores for FY27. Order booking showed improvement over the last two quarters, with new orders worth INR190-200 crores secured in the past two months. The inquiry pipeline remains robust at INR1,200 crores, from which the company aims for a 20% conversion rate, prioritizing orders with healthy margins and risk protection.

Operational Challenges and Strategic Responses

FY26 was marked by macro-economic challenges including geopolitics, raw material price volatility (especially steel), and shipping disruptions due to the closure of the main sea route. These factors impacted execution and increased logistics costs. To mitigate risks, the company adopted a strategy of judicious order booking, consciously letting go of opportunities that did not offer healthy margins, and timing raw material procurement to optimize profitability on fixed-price contracts.

Capacity Expansion and Utilization

The Phase 2 expansion at the Kheda plant has been completed, increasing its capacity to 8,000 metric tons per year. This expanded capacity is expected to generate an annual revenue of INR400-450 crores. Combined with Ahmedabad and Mabel facilities, the company's total installed capacity is now capable of delivering revenue up to INR1,200 crores per year, positioning it for future growth.

Diversification into New Growth Verticals

Anup Engineering is strategically expanding into critical equipment and new sectors. They successfully manufactured and delivered their first 200-metric-ton single-piece equipment to a Middle East client. First orders have been secured in nuclear business, thermal power, manufacturing skids, and air heaters. The technical services vertical, with 40% expected margins, is targeted to grow to INR200 crores in the next three years, with a focus on repair works in the Middle East.

Cash Flow and Working Capital Management

The company's cash position was negative INR73 crores at the end of March 2026, including long-term debt of INR52 crores. This was primarily due to higher debtors (INR260 crores due after March) and lower customer advances. However, with substantial collections in April and May, the cash position improved to negative INR11 crores and is expected to turn cash positive by the end of May 2026, including long-term debt.

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