Anup engineering update(from credit rating 2023 and concall and investor presentation)
ANUP ENG
1…Performance(2020-2023)
Revenue growth@18% cagr
Operating growth@6% cagr
Pat@14% cagr
2…Future growth
A…Kheda plant
=Phase 1
…Anup has developed and implemented the first Phase – I (comprises of 2 bay) of the projects, with an aggregate cost of around ₹120 crore
…1st dispatch from Kheda plant is expected in Q2 FY24.
=Phase 2 and phase 3
…The company plans to develop and implement Phase – II & III of the project comprises of another 6 bays with an investment outlay of around Rs.150 crore. As informed by the management, Phase-II and phase-III of the project is expected
to be commissioned by June 2024 and September 2025 respectivel
=Capacity constraint at its existing manufacturing facility (inability to handle equipment with weight more than 200 tons) ha d restricted its
scale of operations in the past. However, with commencement of new manufacturing facility at Kheda, near Ahmedabad, Anup expects to grow its scale of operation as it can now handle large size equipment and export orders more efficiently.
B…Order books
=Strong order book of ₹658 crore as on May 31, 2023, which is at all-time high for the company.
3…Quality
=The products of Anup are approved by all the major third-party inspection agencies and consultants like Engineers India Ltd. (EIL), Jacob H&G Ltd., ThyssenKrupp Industrial Solutions (India) Private Limited, Project Development India Ltd. etc.
=Further, Anup has also acquired “U”, “U2”, “S” & “R” stamp
authorization certifications issued by American Society of Mechanical Engineers (ASME) to penetrate export market (ASME product
certification mark complies with the laws and regulations of nearly 100 countries as a means of meeting their government safety
regulations).
4…Healthy profitability and return indicators:
= During FY23, Anup’s PBILDT margin declined by 415 bps on a y-o-y basis to 20.42% which has remained largely on the envisaged level. The decline in margin during FY23 was largely on account of elevated commodity prices which witnessed quick and sharp volatility during the year.
=However, with stabilization of commodity prices along with growth in scale of operation, the PBILDT margin is expected to improve to around 21-22% during FY24-FY26.
=Anup also has strict control over its overheads coupled with efficient management of order book and product mix. Moreover, Anup’s
technical expertise and specialized products like ‘Helixchanger’ and ‘Embaffle Heat Exchangers’ offer significant benefits over
conventional heat exchangers which is expected to support its profitability.
=Anup’s return on capital employed i.e., ROCE stood healthy at around 16.29% during FY23 (around 16.67% during FY22). ROCE is expected to remain healthy in the range of 17-
19% for FY24-FY26.
5…Anup receives interest free advances from its customers which keeps Anup’s external fund -based borrowing requirement low.
6…Market Focus:
=The company is focusing on consolidating its position in the market for centrifuge products.
=The company is exploring the possibility of entering the air cooled heat exchanger market.
7…Customer Acquisition:
=The company has gained three new customers: Graham, Indorama, and ITT.
8…Replacement market
Good replacement market as the average age of the company’s equipment is 15-25 years.
9…Future Growth:
=The company expects to maintain a growth rate of 25-30% for the next three years
Disc…invested
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