Industrial products, encompassing machinery, equipment, and materials, play a pivotal role in global economies. With the sector contributing significantly to GDPs worldwide, it’s projected to reach a valuation of $2.23 trillion by 2027, growing at a CAGR of 4.1%. This sector’s dynamism drives innovation, infrastructure development, and manufacturing efficiency.
With a market capitalization of Rs 3,864.37 crore, the shares of The Anup Engineering Ltd were trading at Rs 1,941.80 apiece, decreasing around 1.52 percent as compared to the previous closing price of Rs 1,971.70 per share.
Looking into Anup Engineering’s performance, revenue increased by 9 percent from Rs 144 crore in Q3 FY23 to Rs 157 crore in Q3 FY24. During the same period, net profit increased by 126 percent, from Rs 19 crore to Rs 43 crore.
ICICI Direct, one of the well-known brokerages in India, gave a ‘Buy’ call on the stock with a target price of Rs 2,600 apiece, indicating a potential upside of 34 percent from Wednesday’s price of Rs 1,941.80 per share.
Here is the rationale behind the bullish potential upside of 34%:
● Export Market Growth: Anup has witnessed substantial growth in its export market revenue share, rising from 10-15% to 40% in FY24. With 50% of the order backlog and 65% of the business pipeline coming from exports, the company anticipates this share to further increase to 50% in FY25E.
● Key Export Opportunities: Anup’s focus on markets like the US, Nigeria, Australia, and the Middle East in segments such as petrochemicals and blue hydrogen reflects its strategic approach to capitalize on strong growth prospects. These regions offer robust opportunities for expansion and revenue generation.
● Backlog and Revenue Guidance: An ending backlog of ₹854 crore for FY24 sets a strong foundation for revenue booking in FY25E. With management guiding for ₹700 crore plus revenues in FY25E, reflecting a significant growth trajectory.
● Bid Pipeline and Growth Projections: A rolling bid pipeline of ₹1000 crore, with 65% from exports, suggests promising revenue prospects. This pipeline is anticipated to drive a robust 25% revenue growth over the next 2-3 years, aiming to surpass ₹1000 crore in sales by FY27E.
The stock has delivered returns of 60.71 percent in the last six months and a multi-bagger return of 243.55 percent in a year. A shareholder’s investment of Rs. 1 lakh in the company would be worth Rs. 3.43 lakh in a year.
Anup Engineering Limited makes heat exchangers, reactors, pressure vessels, columns and towers, industrial centrifuges, and formed components. The company’s products are utilized in a variety of process sectors, such as oil and gas, petrochemicals, LNG, fertilizers, chemicals, pharmaceuticals, power, water, paper and pulp, and aerospace.
Written by:- Abhishek Singh
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