ANUP - The Anup Enginee

📊 NSE: ANUP 🏢 Engineering 📅 Last Updated: 12/14/2025 14:18

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 20.2% YoY to INR 732.8 Cr in FY25. For H1 FY26, revenue reached INR 407.5 Cr (+20.3% YoY). Segment performance for H1 FY26: Heat Exchangers contributed INR 234.8 Cr (57.6%), Vessels INR 128.8 Cr (31.6%), Towers & Reactors INR 24.5 Cr (6.0%), Centrifuge & Others INR 16.2 Cr (4.1%), and Tank & Silos INR 3.2 Cr (0.8%).

Geographic Revenue Split

Export revenue accounted for 56% of total revenue in H1 FY26. Domestic operations are spread across three manufacturing locations: Ahmedabad (contributing 63% or INR 256 Cr), Kheda (35% or INR 143 Cr), and Mabel Engineers in Tamil Nadu (2% or INR 8 Cr).

Profitability Margins

Operating Profit Margin stood at 20.00% in FY25, while Net Profit Margin was 16.14%. PAT for FY25 was INR 118.3 Cr (+3.1% YoY). H1 FY26 PAT was INR 58.3 Cr, a marginal growth of 3.1% over H1 FY25, impacted by the normalization of the tax rate to 25% compared to 14% in the previous year due to ESOP-related tax benefits.

EBITDA Margin

EBITDA margin remained stable at 22.5% in H1 FY26 (INR 91.8 Cr) compared to 22.5% in H1 FY25. The company guides for a sustainable EBITDA margin range of 20-22% in the medium term.

Capital Expenditure

The company recently completed a major capex cycle, including the Kheda facility expansion and the INR 31 Cr acquisition of Mabel Engineering Private Limited (MEPL). Future growth is expected to be driven by utilizing this expanded capacity rather than new large-scale debt-funded capex.

Credit Rating & Borrowing

Long-term bank facilities are rated CARE A+; Stable and short-term facilities CARE A1+. The company maintains low leverage with a Debt-Equity ratio of 0.05x and an Interest Coverage Ratio of 43.89x as of March 31, 2025.

⚙️ Operational Drivers

Raw Materials

Primary raw materials include steel and specialized alloys used for fabrication. While specific % splits are not disclosed, raw material price volatility is a key risk, mitigated by a policy of purchasing materials immediately upon order receipt.

Import Sources

Not specifically disclosed, but the company operates in global markets for both sourcing and exports, particularly for specialized components like 'Helixchanger' technology licensed from Lummus Technology LLC, USA.

Capacity Expansion

Current capacity is spread across Ahmedabad, Kheda, and MEPL. The Kheda facility removed previous constraints, allowing the company to handle equipment weighing over 200 tons, which was a bottleneck until FY23.

Raw Material Costs

Raw material costs are managed by mapping 100% of inventory to specific customer orders, with inventory typically maintained at 30% of the outstanding order book to hedge against price fluctuations.

Manufacturing Efficiency

Return on Capital Employed (ROCE) improved to 24.16% in FY25 from 22.73% in FY24, reflecting high efficiency in utilizing the new Kheda capacity.

📈 Strategic Growth

Expected Growth Rate

20-25%

Growth Strategy

Growth will be achieved by stabilizing operations at the new Kheda facility, which handles larger equipment, and integrating MEPL to provide geographical diversification in South India. The company is shifting from a high-growth phase (37% CAGR) to a sustainable 20-25% growth target for organic operations.

Products & Services

Design and fabrication of critical process equipment including Heat Exchangers (Helixchanger, Embaffle), Pressure Vessels, Centrifuges, Columns, Towers, Reactors, and Silos.

Brand Portfolio

The Anup Engineering Limited, Mabel Engineering Private Limited (MEPL), Helixchanger (licensed), Embaffle Heat Exchangers.

New Products/Services

Expansion into the Hydrogen segment, which already contributes ~30% to the order book, and increasing the share of high-margin export orders.

Market Expansion

Targeting increased export revenue (currently 56%) and expanding the product footprint in the clean energy/hydrogen sector.

Market Share & Ranking

Not disclosed in available documents, though noted as having a 'moderate scale' relative to larger capital goods players.

Strategic Alliances

Technical licensing agreement with Lummus Technology LLC, USA for 'Helixchanger' technology.

🌍 External Factors

Industry Trends

The industry is shifting toward larger-scale equipment and clean energy (Hydrogen). The Indian government's infrastructure push and the cost-competitiveness of Indian refining support a stable medium-term outlook.

Competitive Landscape

Competes with other capital goods players in the process equipment industry; competitive edge is maintained through delivery adherence and quality for reputed global clients.

Competitive Moat

Durable moat built on technical expertise in critical equipment, licensing of proprietary technologies (Helixchanger), and the ability to manufacture heavy-duty equipment (>200 tons) which has high entry barriers.

Macro Economic Sensitivity

Highly sensitive to the capital outlay of oil and gas companies; the FY25 Union Budget's 11% increase in oil/gas outlay to INR 1,18,500 Cr is a significant positive driver.

Consumer Behavior

Shift in end-user demand toward more efficient heat exchange technologies and sustainable energy segments like Hydrogen.

Geopolitical Risks

Declining fresh investments in refineries in Europe and North America are offset by growing demand in Asia and India, though the company still receives replacement orders from Western markets.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to stringent manufacturing standards for pressure vessels and process equipment used in hazardous environments like refineries and chemical plants.

Taxation Policy Impact

Effective tax rate normalized to 25% in FY26. In FY25, the rate was lower (14% in Q2) due to tax benefits derived from ESOP exercises.

⚠️ Risk Analysis

Key Uncertainties

Concentration risk is high, with 71% of unexecuted orders tied to the oil and gas sector. Any delay in client capex plans could impact the order inflow by 15-20%.

Geographic Concentration Risk

Manufacturing is concentrated in Gujarat (Ahmedabad and Kheda) and Tamil Nadu (MEPL).

Third Party Dependencies

Dependency on Lummus Technology LLC for 'Helixchanger' licensing is a critical operational linkage.

Technology Obsolescence Risk

Low risk due to the specialized nature of heavy fabrication, but the company is proactively moving into the Hydrogen segment to stay ahead of energy transition shifts.