• Standalone Revenue (Q2): ?187.9 crores, 34% growth quarter-on-quarter.
• Standalone EBITDA (Q2): ?42.9 crores, 22.9% margin, 37% growth quarter-on-quarter.
• Standalone PAT (Q2): ?32.3 crores, 17.2% margin, 48% growth quarter-on-quarter.
• Consolidated Revenue (Q2): ?193.1 crores, 38% growth quarter-on-quarter.
• Consolidated EBITDA (Q2): ?43.3 crores, 22.4% margin, 38% growth quarter-on-quarter.
• Consolidated PAT (Q2): ?32.5 crores, 16.8% margin, 50% growth quarter-on-quarter.
• H1 Revenue: ?339.1 crores, 28% growth year-on-year.
• H1 EBITDA: ?76.3 crores, 28% growth year-on-year.
• H1 PAT: ?56.6 crores, 40% growth year-on-year.
• Working Capital: Healthy at 4.1 turns.
• Exports (H1): 52% of total revenue.
• Sectorial Revenue (Q2): Oil & Gas and Petrochemicals 61%, Hydrogen 30%, Fertilizers and Others 9%.
• Product Revenue Share (Q2): Heat Exchangers 72%, Vessels, Reactors, and Columns 24%, Others 4%.
• Pending Order Book (End of September): ?882 crores, 68% exports.
• Current Pending Order Book: ?932 crores.
• Renewable Energy Usage: 60% of power requirement at Ahmedabad plant from renewable sources, expected to increase to 75%.

• Warning! GuruFocus has detected 5 Warning Signs with NSE:ANUP.

Release Date: October 28, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• The Anup Engineering Ltd (NSE:ANUP) reported a 34% quarter-on-quarter revenue growth, marking its best-ever quarter on revenue.
• The company achieved a 48% quarter-on-quarter growth in profit after tax (PAT), demonstrating strong financial performance.
• Exports accounted for 52% of the revenue, indicating a successful expansion into international markets.
• The company has signed a collaboration agreement with Graham Corporation USA, becoming the exclusive manufacturer for their global projects.
• The pending order book stands at 932 crores, providing strong visibility and confidence for future growth.

Negative Points

• The company's receivables have increased significantly, raising concerns about cash flow management.
• There is aggressive market competition, particularly in the domestic sector, which could impact future margins.
• The company faces geopolitical risks in its export markets, which could affect order execution.
• Capacity utilization at the Ahmedabad facility is nearly maxed out, limiting immediate growth potential without further expansion.
• The company does not have price variation clauses in its contracts, which could expose it to raw material price fluctuations.

Q & A Highlights

Q: Can you provide insights into the growth projections for FY27 and FY28, and details about the collaboration with Graham Corporation? A: We aim for a 25-30% growth year-on-year over the next 2-3 years. This will be achieved by expanding capacity and strategic collaborations. The Graham Corporation collaboration makes us their exclusive manufacturer, potentially adding 30-40 crores in revenue for FY26, with opportunities for international markets as well. - Reginaldo Dsouza, Managing Director and CEO

Q: How do you foresee the diversification of revenue streams across industries and products in the next three years? A: We expect a 60-40 split between heat exchangers and vessels/reactors. Oil and gas will stabilize at 50-55% of revenue, with hydrogen and fertilizers increasing to 40%. Geographically, we are focusing on the US, Canada, and Middle East markets. - Reginaldo Dsouza, Managing Director and CEO

Q: What are the current capacity utilization rates, and how will they change with the new manufacturing bay at KTA? A: Ahmedabad is fully utilized at 85-90%, while KTA operates at 75%. The new bay at KTA, operational by Q3 FY26, will increase capacity to 8,000-10,000 metric tons. This will support a turnover of 1,000 crores. - Reginaldo Dsouza, Managing Director and CEO

Q: Can you elaborate on the strategic focus for future collaborations or acquisitions? A: We are looking for opportunities that provide additional product portfolios or technology advancements, particularly in green energy. We are not seeking capacity expansions in existing products but rather strategic enhancements. - Reginaldo Dsouza, Managing Director and CEO

Q: How is the order book and inquiry pipeline shaping up for the rest of the year and beyond? A: The inquiry pipeline remains robust at 900-1,000 crores. We aim to start FY26 with an order book of around 900 crores, ensuring full capacity utilization and supporting our growth targets. - Reginaldo Dsouza, Managing Director and CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.