THE ANUP ENGINEERING LIMITED (NSE: ANUP) Q4 2025 Earnings Call dated May. 13, 2025
Corporate Participants:
Reginaldo Dsouza — Chief Executive Officer and
Nilesh Hirapara — Chief Financial Officer
Analysts:
Jaiveer Shekhawat — Analyst
Mohit Surana — Analyst
Navani Naredi — Analyst
Ravi Naredi — Analyst
Kunal Shah — Analyst
Unidentified Participant
Vedant Sarda — Analyst
Yagnam Pathak — Analyst
Shankar Chandanwala — Individual Investor
Pankaj Motwani — Analyst
Bhavya Sonawala — Analyst
Presentation:
Operator
Ladies and gentlemen, you have been connected for Anup Engineering Limited Conference Call. Please stay connected. We will begin shortly. Ladies and gentlemen, you have been connected for Anub Engineering Limited Conference Call. Please stay connected. We will begin shortly ladies and gentlemen, good day and welcome to the Q4 and Year-Ended FY ’25 Earnings Conference Call of the Anub Engineering Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. Before we proceed with the call, let me remind you that the discussions may contain forward-looking statements that may involve known or unknown risks, uncertainties and other factors. It must be viewed in the conjunction with our business risks that could cause actual results, performance or achievements to differ significantly from what has been expressed or implied in such forward-looking statements. Please note, the company has uploaded the results, press release, investor presentation and also outcome of the Board meeting on the website of the stock exchanges and website of the company. I now hand the conference over to Mr Reginaldu D’Souza, CEO and Managing Director of the company. Thank you, and over to you, sir.
Reginaldo Dsouza — Chief Executive Officer and
Thank you. Hello, everyone. A warm greeting from T Manoop. I’m happy to be here to present to you all our performance for the financial year 2024 ’25 ended March 2025. I must say the year has been very eventful and challenging. The geopolitics, wars, trade tariff positions, etc, has been volatile and uncertain and I’m sure still continue until complete clarity emerge. Let me take you all through the financial numbers for the year 2024, ’25. We achieved a consolidated revenue of INR751.3 crores, 751.3 crores, a growth of 36.5% Y-o-Y. Please note this includes INR18 crores of pre-merger revenue of Engineers. The EBITDA stood at INR172.8 crores at 23%, a growth of 36.3% Y-o-Y. Profit-after-tax is INR124.6 crores, a growth of 19.8% year-on-year and PAT without considering tracks reversals has grown by 35.5%. Interesting contributions from all our three manufacturing locations, Ahmedabad plant at INR565 crores for FY ’25, Kera plant in its first full-year operations delivered INR143 crores and Engineers, which we acquired last year, clocked in with INR43 crores. So we are happy that all the three locations have been contributing very well to the revenue. The sectorian revenue across industries was as expected with hydrogen at an encouraging 30%, which clearly demonstrates the energy transition to cleaner forms and also at the same time, our preparedness for this business. Oil and gas at 30%, petrochemicals at 23%, fertilizer at 10% and others stood at 7%. In terms of the product mix, heat exchangers stood at 65% and the vessels reactors, columns and others at 35%, which signifies the contribution made from Akeda plant, which mainly focuses on manufacturing vessels, reactors and columns. In-line with our strategic roadmap, the exports was at an encouraging 54%. This was pure exports. With deem exports, it stood at 59%. The average working capital is at 3.6 tons. I would like to make a note here, the working capital block is touch higher-than-expected, mainly on account of, of course, our growth and also an order where we have delayed the delivery as the customer site is not ready. In fact we have many equipments ready for dispatch which results into a higher unbilled debtors but we use this opportunity to commence manufacturing of other fast-track projects, which has taken good shape now and should be executed in-quarter one of this financial year. Therefore, as we execute quarter one and quarter two, this working capital should normalize. On the order book, as on-date, we have a pending order book of approximately INR740 crores for this financial year. Of course, if not for the large one canceled order, which I mentioned during the last call, the spending order book position would have been much better, around INR810 crores. Yes, the order finalizations have been a little slow over the last two months, mainly for the reasons that customers are waiting for more clarity to emerge on policies and trade tariffs, which can define competitiveness of every country. We are in touch with our customers and considering the fact that trade agreements are being ironed out between various countries, things would improve as clarity emerges. Also important to note that the domestic business also is seeing a good traction. The inquiry pipeline continues to be robust, especially on exports. As we speak now, we have an inquiry pipeline of about INR800 crores. Of which we are working on a few very closely and are confident to get the necessary order intake for this financial year plan. Moving ahead, there have been some good developments during the financial year gone by FY ’25, I would like to make a note of you. First, our foray into critical equipment business. We have successfully manufactured and delivered our first chrome moly modified material equipment for an Indian client. This is — this is extremely critical and strategic to move into critical methologies in-line with our strategies. We have also started manufacturing our first solid in kernel equipment weighing over 200 metric tons single piece for an export customer at our Kedar facility. This would be our first track-record for a solid inkernal material equipment. And after a long year, we have manufactured and supplied as titanium equipments for our clean room in the last financial year. Further, we are currently manufacturing few more equipments in the clean room. This is again in-line with our strategy to have calibrated strategic inroads into critical and complex methodologies. So we have now started using our clean room effectively. Second, on our capacity expansion plan, we have started the construction of our Phase-2 at Keda locations, which is estimated to be completed by quarter two and commissioned in-quarter three. This will add one complete bay and one open yard at Keda. With this, we will have three complete base manufacturing base and one open yard capable of delivering about INR400 crores per year from this facility. Our acquisition of Naval Engineers is yielding good results. It has added about 200 metric ton per year fabrication capacity and we expect to double the turnover this year as mentioned. Our design office at Vadara has stabilized well and we moved to a bigger seat, 60 setre office single floor to increase the bandwidth and to have more people working on design, research and development. This is in-line with our strategic roadmap of building Godadra as design hub for new product development and also as a profit center in the future. With these three installed capacities at our three manufacturing locations, that is Hymdabad, Keda with Phase-2 and Engineers at Tamil Nadu, we have a capacity capable of delivering revenue up to INR1,200 crores Indian rupees per year depending of course, on the product mix. We will expand it further in-line with our growth guidance at Keda. On the background of these facts and the market outlook globally, our guidance for this financial year FY ’25, ’26 continues to be about 25% revenue growth and with an EBITDA of over 20%. Exports will be targeted in the range of 50%. So we as a business are mindful of the risks and challenges that can come our way. We are cautious of the geopolitics and how it could impact trade. We are cautious on the projects and the countries we work with. And we are watchful of the competition and the energy transition activities globally and also the trade tariff dynamics and many other factors that can play. Considering these, we have prepared a strategic roadmap for our growth in the future. I may not be able to spell out everything, but surely have targeted a few new products and service verticals we will get into to diversify our product portfolio. To mention a few, we have started our focus on large-volume play with short manufacturing cycle jobs. This is nothing but the high-volume play. We have also started Anuk Technical Services, which seeks opportunities into testing services using our NABL accredited laboratory, health checks of static equipments at site and small repair works. Happy to share that we have executed a PO already under this and also backed another service order just last week. This is a high-margin play business. On the dividend, last year, our company had declared a regular dividend of INR15 INR and a special dividend of INR5. It is my pleasure to inform you all that the company has declared dividend of INR17 per share, INR17 per share versus INR15 of last year. The same will be distributed post-approval of shareholder in NC AGM. To conclude, I belief that at the strength of our strong team at Anuk, we have delivered decent results despite all challenges and uncertainties. Of course, we have had some learnings and opportunities for improvements along the way, and I’m sure we will improve them in the coming years. I am confident that with the continued support from our reliable partners and customers, we will be able to deliver on our plans. My sincere thanks to all my committed team members, our partners, our suppliers and all our shareholders for standing-by and trusting in us to deliver results. We are grateful for your trust and support. Once again, thank you all for being present on this call and for your patient listening. Now I’ll be happy to have your questions. Thank you.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. All participants are requested to use handsets only while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. A reminder to all participants, if you wish to ask a question, you may press star and one. We have our first question from the line of JV from Ambit Capital. Please go-ahead.
Jaiveer Shekhawat
Hi, thanks for taking my question. Raji, hi. My first question was on your gross margins. So what I see is sequentially as well as on a Y-o-Y basis, there has been almost about 600 bps of contraction there. So could you highlight what has led to that given that, I mean you have still seen an export mix that has increased. I mean what explains that?
Reginaldo Dsouza
Yeah hi, Javier. So this is nothing but — but as mentioned earlier, as we move higher into the product mix, the margin as percentage is bound to shrink, because these are high material intensive products and that is the reason it will help you to grow in terms of now of growth. It will give you absolute margins on the higher side, but on the percentage terms, it will drop. So in short, it is purely our products mix play. And as we move to higher product mix, as we mentioned earlier, in terms of EBITDA percentage, it’s likely to drop. Got it. Got it. And it will allow you to grow, but it will allow you to grow because for the same tonnage, you get a higher revenue in terms — which will help you to grow.
Jaiveer Shekhawat
Sure. And as you rightly mentioned in your opening remarks as well about the evolving situation globally as well. And we have also been seeing that there have been delays with respect to order finalization and plus the fact that the oil prices are where they are. And what sort of gives you still the confidence that you’d be able to sort of continue this growth trajectory possibly over the next two, three years.
Reginaldo Dsouza
So the inquiries that we are handling about 70% of them are in petrochemicals and hydrogen. So it’s more on the energy transition side for which — because that does not get impacted with your oil prices on the higher side. So that gives us the confidence and we are in touch with customers. So there is no dropping of the plan. Probably it is only a more clarity in terms of their complete budget for a particular project. Having said this, when we work-out the economics in terms of which countries can supply these kind of products to maybe United States or Canada or other parts of the world, I think India still holds a dominant position in terms of — even if the mentioned trade tariff has to be employed, India still has the dominant position in terms of being the most competitive country. So that is where it gives us confidence because we know the competition that we play with. And since the projects are on-the-go, it’s only possible a probable delay in terms of finalization?
Jaiveer Shekhawat
Sure. What I see on the balance sheet is that your trade receivables, these have increased to almost 2 times to about INR280 crores. And also there is roughly about INR90 crores of other current assets. So I think first question is on-trade receivables, what sort of explains the increase? Second, how much of the other current assets is the unbilled revenue for you?
Reginaldo Dsouza
Yeah. Yeah. So as I explained, the working capital did swell up and the block is higher in terms of receivables as well. It’s mainly because of the one project where the deliveries were extended up to September because the customer sites were not ready and we had to deliver those equipments. Now they are ready, most of them at our Kera facility packed, painted and we have to deliver them. But we have taken that opportunity to take-in more projects as I mentioned in my opening remarks, which is helping us to deliver those equipments on-time. It will normalize over probably quarter one and quarter two by the time we execute these projects and rollout. So that’s the basic reason why the unbilled revenue seems to be a little swelled up.
Jaiveer Shekhawat
So is the entire INR90 crores, is that enbuild?
Reginaldo Dsouza
Sorry, sorry, come again.
Jaiveer Shekhawat
So I see that the other current assets, ideally for the jobs that you’ve already booked or sales that you’ve recognized. I mean that would flow into your trade receivables, but your unbilled eye assume would be part of the other current assets, right?
Reginaldo Dsouza
Yes. No, that would be part of receivables. The other current asset is roughly, INR20 crores INR23 crore increase in the advances to the supply because as we get into the higher, most of material is imported from either Europe or China where we have to pay few percent and in some of the material imported from the Europe, we had to pay 30% to 40% advance to get the material. And second, there is an increase of roughly INR10 crores in the prepayment of the royalty. So the royalty which we pay to a technology provider, say, Helique, we need to pay them 100% royalty on the receipt of the order from our customer. So INR10 crore is increase in the prepayment on account of the royalty, which is pass-through expense to the customer.
Jaiveer Shekhawat
Got it. Really my last question, since you talked about your strategic roadmap as well and you are targeting newer products as well, which are possibly going to be more higher-volume, more recurring business, how do you think about margins for those kind of projects versus your existing ones? And then what margin range would you be comfortable with while you try to sort of scale-up Anup Engineering?
Reginaldo Dsouza
Yeah. So we broadly as we scale-up, we are going to have the business moving into three main verticals. One is of course our legacy old products which we are into today, which is which is giving us EBITDA of 20% plus. So we are going to continue that. And the other business, so it’s basically a 60-20 kind of a model. So 60% of our businesses would come from this. 20% is where we will move to-high volume quick turnaround jobs, which may be in the region of 15% kind of an EBITDA margin. So they would be termed as high-volume, low-margin, which will help us assure our growth. And the third is where we are wanting to get into the services part, which is which is very-high margin, low-volume kind of a business. So these three models put together as we grow a few in the future, we wish to keep the EBITDA margins 20% plus. That would be our guidance going-forward.
Jaiveer Shekhawat
Got it. Thank you so much and wish you all the best. Thank you.
Operator
Thank you. We have our next question from the line of Mohit Surana from Monarch Networth Capital. Please go-ahead.
Mohit Surana
Sir, thank you for the opportunity. A few of my questions have already been answered. But just to ask, sir, in terms of exports, what is our exposure in terms of countries like how much is US, Japan, Canada, Europe and Middle-East?
Reginaldo Dsouza
Yeah. Hi,. So in terms of exports are — of course, year-on-year, it would change a little. But if you take an average that over a three-year period, you would find US or even if you take last year, US would be about 30% of the total exports. 50% is so it is broadly when I say Europe, sorry, US, 30%, which includes the US, North-America and Canada, that part of the world. 50% is Middle-East. When I say Middle-East, it’s mainly Saudi Arampa which is in Saudi Arabia, so the national company there and Abu Dhabi. So these are only two countries in Middle-East that we work with. And then the balance 20% forms part in Australia and some parts in Nigeria. So these are the broad countries that we work with.
Mohit Surana
So you said Middle-East is 15%, right?. Got it. Got it.
Reginaldo Dsouza
Yeah, because we’ve got pretty large orders for RedNoc and Saudi Aramco, which will fuel. And of that balance, 20%, about 5% is in Europe. We don’t do much business normally into Europe, but I believe this is the first time that we’ve got an opportunity to make a project and send inside Europe. Generally, we have customers in Europe, but the project in rest of the world, but we’ve recently got some good order where we have to make the equipment and the project is residing in Germany to be precise, which is for our hydrogen project.
Mohit Surana
Understood, sir. Sir, my second question is with respect to our tax-rate. So this time our effective tax-rate is somewhere around 27% for this quarter versus a refund same-period last year. So going-forward, can we expect the tax-rate to be around, say, 23% to 24% for the rest of the quarters because earlier we used to get tax subsidies. So can you just elaborate on that
Reginaldo Dsouza
Yeah, so it will be a flat rate of 25%. Of course, there would be some tax rebates that we may get as we move forward.
Nilesh Hirapara
Yeah. But if you see in this quarter-four, there was no issuance of ESOP. So generally soft issuance is one where we get a higher tax benefit because of the tax effect. Otherwise, the tax-rate will remain in the 25% to 26%. There, as we said earlier, there are tax provisions which is made in the books on a conservative side of roughly INR15 crore to INR18 crore for which assessment will happen in this year, probably the next year. As and when we get a clear assessment from the department, we will write-back all those tax provision in the book that may call for a lower percentage of tax?
Mohit Surana
Got it, sir. Understood. Sir, just one last question if I can chip-in. Sir, can you just reiterate how much is how much is the revenue for this year for Uda, Keda enables?
Reginaldo Dsouza
So the revenue for Ahmedabad that is order facility was INR565. Keda with Phase-1 as today is 143 and Mabel is 43.
Mohit Surana
And sir, in terms of capacity, how much will these be?
Reginaldo Dsouza
So these three put together, we can deliver about INR1,200 crore business hello
Operator
So the participant got disconnected we’ll move on to the next participant from the line of Navne Naredi from Naredi Investments. Please go-ahead.
Navani Naredi
Hello. Am I audible?
Reginaldo Dsouza
Yes. Please go-ahead.
Navani Naredi
Yeah. So my first question is what steps are you taking to improve the profit margins given the rising raw-material costs? And second will be what role will government contracts and defense budgets play in — will play in the future? So these are my two questions, sir.
Reginaldo Dsouza
Thank you. Yeah. So on the margin side, as we are growing, we will try and get the product mix in the range that allows us to remain and with an EBITDA of 20% plus. That would be our game plan. Of course, your question specific on the raw-material. We have definitely a methodology within where we try to source the best competitive pricing, maybe it in India or imported. So we have that process in-place. But a short answer, we will try and make the choices first that it allows us to maintain an EBITDA of 20% plus. I believe your second question was on the PSC orders. Yes, the traction has started. In fact, we have some inquiries that we quoted. They being all tenders, they may open up probably 60 to 90 days from now. So as I mentioned in my call earlier, definitely the domestic PRC orders intake would start soon.
Navani Naredi
All right, sir. And going that the tariff impact that the whole economy is facing right now, so will we be able to compete in and the rising raw-material cost in terms of that I’m asking.
Reginaldo Dsouza
Yeah, sure. In fact, if you per se look only at tariff and how it is going to impact us, probably if you look at the countries that are involved in manufacturing these kind of products, probably we are at an advantaged position. In fact, it’s only going to be advantages for us considering our relationship with the United States and the tariff that is applicable on India. And the raw-material which we generally buy from, we buy from Korea and some parts of Europe. Korea, anyway, we have a free-trade treaty, so that does not impact us because most of our forgings come from Korea. And the larger part of the material, almost 70% of the material is bought in India, the steel, AMNS and Zindal. So larger portion, it does not impact us. But yes, for critical material which are exotic in nature, we have to go to Europe or China depending on the on the and case-to-case.
Navani Naredi
All right. And my last question is on engineering. So like at what point of time will we be able at a — like at a breakeven point? Because right now I can say because of the losses, I think the profit margins has also impacted. So like what is the future of Engineering so-far? Because you have already mentioned that you will be doubling the turnover this year, but what is the further growth and margin strategy going ahead for Mabel Engineering.
Nilesh Hirapara
So is already a profit-making mam and they had a very good profit junk orders in this year, wherein they have done the EBITDA in the similar tune what Anup has done. But going-forward, when they will do a INR8 crore, we expect them to generate an EBITDA in the range of 18%, I mean somewhere near to 18%.
Navani Naredi
Okay, my bad. Thank you so much and all the best for your future.
Nilesh Hirapara
Thank you.
Reginaldo Dsouza
Thank you.
Operator
Thank you. We have our next question from the line of Ravi Naredi from Naredi Investments. Please go-ahead.
Ravi Naredi
I would like to know, after this INR50 crore capex, which we are doing in Keda, what is our next capex plan.
Reginaldo Dsouza
So for this, once the Phase-2 is done, we don’t have any plans as of now for Keda. As I mentioned, with all the capacities in-place, we will be able to deliver about INR1,200 crores. Beyond INR1,200 crores, of course, we will need some capacity in-place for which we will make a decision towards the end of this financial year to add one more — one more at Bay at Kida because it takes about 11 to 12 months-to put that in-place. So the next capacity that we will need is for FY ’28.
Ravi Naredi
Oh, very nice, very nice. And sir, our order book is INR741 crores this year. Last year it was INR854 crore order. So can we think there will be less turnover this year?
Reginaldo Dsouza
No, because as I said, our growth guidance still remains at 25% growth for this year. Yes, the order booking number looks at 741. If not for that one order which got canceled, probably we would have been looking at 800 plus, which is in-line with our strategic intent. What we’ve always maintained is that at the beginning of the year, we should roughly have about 80% of the plan for the year and the balance 20% we generally keep for short-term — short delivery items or shutdown items where the profit margins are much better. So we are a little lower than our plan. We would have liked to be about INR800 crores. But if not for that canceled order, we would have been today announcing that we have INR810 crores order. So — but considering the inquiry positions today, yes, we are positive.
Ravi Naredi
Can you tell the figure how much order we have bid and how much percentage of success we can achieve?
Reginaldo Dsouza
So in terms of the conversion rate, we generally as a policy wish to keep it below 20%, we don’t wish to take it at a higher conversion rate because we can increase the conversion rate, but then we have to compromise on the margins. So to get better margins, we generally keep our conversion rate lower than 20% always.
Ravi Naredi
Okay. And how much orders we have bidded?
Reginaldo Dsouza
So as of — as we speak, as I said in my opening remarks, we have roughly about INR800 crores worth of inquiry bank that we bid as on today and it’s likely to go up because of the PSUs are going to come up with inquiries now. So that will add-up to this INR800 crores.
Ravi Naredi
Thank you very much. Thank you. All the best.
Reginaldo Dsouza
Pleasure. Thank you.
Operator
Thank you. We have our next question from the line of Kunal Shah from Asset Management. Please go-ahead.
Kunal Shah
Hi, Reggi and. Thanks for the opportunity. I have results. One question. You mentioned in your opening remarks that you started new services work as well across our older facility or across our testing facility, correct me if I’m wrong, right. So just wanted to — wanted to get a sense how big this opportunity can be in the overall scheme of things and I believe that the margins and everything over here largely would be much better in the sense that the large part would be directly flowing down to EBITDA. So if you could help understand the opportunity size for this, how meaningful can it be and how meaningful can it be in the terms of you know it translating to PAT
Reginaldo Dsouza
Yeah. Hi, Kunal. So yes, we did start the Technical Services this year. It’s in short providing the testing facilities using our NABL laboratory in Odo, doing the health check at site for static equipment, which we are we have the expertise and at the same time conduct the repair work at site during the shutdown. So these are the services that we promote. And as I mentioned, we’ve completed a couple of them. Yes, these are good EBITDA margin business. It can give you clear margins of upwards of 30%. As of now, we are — since we have started, we want to ramp-up this service, but — but our estimates is that in three years’ time, this can be close to a INR200 crore business with 30% plus kind of an EBITDA margin.
Kunal Shah
Right.
Reginaldo Dsouza
Other competitors have much higher share of this because they have been into this for many years. We just started-off, so we want to ramp-up or ramp it up slowly.
Kunal Shah
Got it, got it, got it. Got it.
Reginaldo Dsouza
So why did we get — and why did we get into it is Mabel gave us that confidence of site service because Mabel has got the capability of doing sidework. So with that now we have confident that we will be able to do a good job on the service business.
Kunal Shah
Got it. Fair to assume then in the current year, it may contribute in the range of INR50 crores INR70 crores or large part of the ramping-up then would happen slowly gradually in FY ’27, ’28.
Reginaldo Dsouza
So this year now to be frank, we are targeting INR25 crores to INR30 crores into this business vertical. Then since it needs some sort of PC or what we call as a proof test. So we have to do some PTRs and go to the customer saying that, hey, we are confident of those work. So the first year would be a little ramp-up, but next year what the number you are mentioning is a possibility.
Kunal Shah
Right. And this is over and beyond the — the INR1,200 crore from the existing facilities basis the capacity that we have is what we are talking about. So this is beyond that INR1,200 crore number.
Reginaldo Dsouza
That’s right.
Kunal Shah
Right. And the second question was, are we also looking at any further acquisitions in terms of building capabilities, et-cetera? If you want to throw some light or maybe a facility like we had a which further opens up the opportunity for us to go beyond INR1,200 crore like we have in terms of what you just spoke about.
Reginaldo Dsouza
Yes, for sure. We will not be able to draft too much details out here. But yes, we are looking out for acquisitions, what I mentioned earlier too, but only on the capability side. So it’s a clear strategic roadmap that we will look out for acquisitions or joint-ventures for capability side. Capacity, we will grow it up at Keda or at, where there is ample amount of land for us to expand. So that will be the roadmap ahead. Yes, we are in talks on some of the possibilities as and when it materializes, we will surely come back.
Kunal Shah
You’re right. Got it, got it. Got it. Fair enough. Thank you. I will join back-in the queue. Thank you so much.
Operator
Thank you. Thank you. We have our next question from the line of Mehul Panjwani from 40 Sense. Please go-ahead.
Unidentified Participant
Hello, sir. Thank you so much for the opportunity. I have a question on the — hello. Am I
Reginaldo Dsouza
Go-ahead.
Unidentified Participant
Yeah. Sir, I have a question on the order which we have received from Germany. You have mentioned that it’s on the hydrogen side. Can you just elaborate what is this order about because I’m new to the organization — new to the company right now.
Reginaldo Dsouza
Yeah. So these are nothing but the static process equipment that we supply, which is our bread-and-butter product, but it is only going to the hydrogen service. And it’s not only in Germany, we have supplied to US, we have supplied to Canada. So these are static equipments in the form of heat exchangers or vessels, which is used for plant generating hydrogen.
Unidentified Participant
Okay. And what kind of
Reginaldo Dsouza
There are a lot of projects which are in Europe because they are into the phase of transitioning to hydrogen operated economy and we expect some more projects to be started soon in and in Europe especially Netherlands, Germany and that part of the civil.
Unidentified Participant
Right. So can I say that this is basically supplying heat exchanges for a hydrogen facility?
Reginaldo Dsouza
Heat exchangers and vessels for hydrogen facility, yes.
Unidentified Participant
Okay. And sir, since you mentioned it’s a standard product, what kind of competition do we have? Do we have suppliers from any other peer companies in India supplying this?
Reginaldo Dsouza
Yes, yes, we have. So we compete with the same competition profile, which is normally for any of the expert jobs.
Unidentified Participant
Okay. So you know my follow-up question because pardon my ones, but since this — as you mentioned that more-and-more countries are moving towards clean-energy and hydrogen-based projects. So has it impacted us in the sense that we have much more inquiry and much more market potential for our heat exchanges because of this last couple of years of in the hydrogen projects.
Reginaldo Dsouza
So when we talk about hydrogen project in today’s context, it is mostly blue hydrogen. Blue hydrogen is nothing but the conventional hydrogen generation method, but using something called a carbon capture unit, CCU unit they Call-IT. So blue hydrogen is nothing but conventional where you don’t emit carbon dioxide directly into the, you actually store it and use it for some purpose. That’s the only difference. So since conventionally, the stream remains the same of converting gas to probably hydrogen and then to ammonia, our products which were — which are legacy old products into heat exchangers and vessels, they remain. In addition to that, we have a requirement for heat exchangers and vessels for this carbon capture unit also. So in short, when a blue hydrogen project comes up, it’s the conventional opportunity plus the CCU opportunity that comes your way.
Unidentified Participant
Okay. So sir, is it fair to assume that whosever is manufacturing the heat exchanges will be able to qualify for this kind of opportunity
Reginaldo Dsouza
Yes, but at the same time, these are, these are some small design nuances which I believe the big-time players, the recruited players surely will have built-in but you need to come because the customer profiles will be a little different in our products, we need something called as customer qualification. So as long as the honey fabricator who’s got the customer qualifications and the design nuances in terms of hydrogen can definitely pass-through. But the entry barriers are not easy. It takes a lot of time to get qualified into a customer.
Unidentified Participant
Right, right. And for these retest changes, do we have a technology transfer from somewhere else? Else. I mean do we are we paying license? Do we have licenses for this?
Operator
Sorry to interrupt, sir. May please request you to rejoin the queue.
Unidentified Participant
Just last question if I can get the answer please.
Reginaldo Dsouza
Yeah. So yes, when it comes to heat exchanger, we already have two licenses. One is for Lama Transfer, which is which is the Helique seed exchanger. So we’ve been with them for over five to six years now and technology from Brahman and Role, Italy. So these are two technology licenses that we have.
Unidentified Participant
Okay. Thank you so much, sir. Thank you for all the answers.
Operator
Thank you. We have our next question from the line of Vidant Sarda from Nirmal Bang Securities. Please go-ahead.
Vedant Sarda
Thank you for the opportunity. Am I audible, sir?
Reginaldo Dsouza
Yes, please go-ahead.
Vedant Sarda
Sir, just you discussed about the blue hydrogen. So our major revenue contribution is from these hydrogen project
Reginaldo Dsouza
That is right. Having said that, we have also executed us a green ammonia project as well for NEOM in Saudi Arabia. But yes, the larger contribution as we speak today comes from blue hydrogen.
Vedant Sarda
Okay. And sir, the revenue guidance which you have provided of INR1,200 crores in that 20% is of service, 20% is of product mix and 60% is from old business. So INR1,200 crores comprised of 60 plus 20 like you told, service is apart from these INR1,200 crores.
Reginaldo Dsouza
So let me just clarify. So the guidance is 25% growth for this year. The 1,200 is basically the capacity that we have today. All my three locations put together, that is Ahmedabad, Keda with Phase-2 construction completed this year and put together has a capacity to turn-around INR1,200 crores. So that’s the capacity of the plant and not the guidance. Guidance is 25% for this year. And you’re right, of the INR1,200 crores, the capacity that we can make, the strategy is very clear that we wish to make 60% in our legacy old product, 20% on high-volume products and 20% on the futuristic products.
Vedant Sarda
Okay. Thank you, sir.
Reginaldo Dsouza
Pleasure.
Operator
Thank you. We have our next question from the line of Yaganam Pathak from Asian Market Securities. Please go-ahead.
Yagnam Pathak
Hi, I just wanted a small clarification that in the press release, we have mentioned order book size as INR770 crores. And in the presentation it is INR41 crores. So just wanted to confirm.,
Reginaldo Dsouza
Can you repeat the question please?
Yagnam Pathak
Yeah. So basically on the press release, we have mentioned order book size as INR770 crore. And otherwise it is INR741 mentioned in the presentation. So I just wanted to confirm the figure.
Nilesh Hirapara
INR741.
Yagnam Pathak
Okay, all right. Thank you.
Operator
Thank you. We have our next question from the line of Shankar Channanawala, an Individual Investor. Please go-ahead.
Shankar Chandanwala
Yeah, hi. Thank you, sir, for taking my question. Apologize if you have answered this question already because I joined a little late. What I see is while our top-line growth is around 30%, right, from quarter-on-quarter from INR171 crore to INR221 crore this quarter. Our cost of material consumed, it is like more than double, right? It is more than 100% growth. So from INR59 crore to roughly INR148 crore. So can you please explain what cost the which jump-in the material cost?
Reginaldo Dsouza
Yeah. So basically the cost-of-goods-sold is up a few percentage points is mainly because we have moved our needle towards the more exotic and critical methologies where the material content in your overall sales price goes much higher. Just to give you an example, say, for example, a normal carbon steel equipment, you will have your material price at about 50% of your total sales price. When you go to, for example, duplex or super duplex material, it can go as high as 70%, 75% of your total price. So it’s only a product mix that is moving up the level.
Operator
Thank you, sir. The participant got disconnected. We have our next question from the line of Mohit Surana from Monarch Networth Capital. Please go-ahead.
Mohit Surana
Hello, sir. Sorry, I got disconnected earlier. Just one last question on the utilization side. You said our total capacity is somewhere around INR1,200 crores. What is our current utilization and what will be the target utilization over the next two to three years?
Reginaldo Dsouza
Yeah. So this INR1,200 crores, Mohit, is once we close our Phase-2 construction at, which we are expecting in Q2 of this year. So with that, it will be INR1,200 crore. So this year, we are going to with the guidance of it’s going to be roughly about 75% to 80% of the capacity utilization.
Mohit Surana
So 75% to 80 is the utilization expected including this Phase-2.
Reginaldo Dsouza
That’s correct for next year.
Mohit Surana
And how much is the inflation for FY ’24?
Reginaldo Dsouza
We generally keep about 10% capacity for quick turnaround shutdown jobs because they generally — and also to cover-up because to cover offs of some accepted work.
Mohit Surana
Understood, sir. So is it fair to say currently utilization is somewhere around 65% to 70%, which will ramp-up to 75% to 80% over the next two years?
Reginaldo Dsouza
No, so what we are saying is, Mohit, currently, without Phase-2, if you see, we are almost at about full capacity utilization and that’s the reason we went on to expand our Phase-2 to cover-up for the growth for next year. So next year, once we have the Phase-2 in-place, that will have a capacity of 1,200. As against that, we would be making with the growth guidance roughly about say 900 plus, which will give you roughly about 80% of the overall capacity.
Mohit Surana
Understood, sir. Yeah. That’s it from my side. Thank you.
Reginaldo Dsouza
And again, and again, Mahesh, it depends on the product mix because it depends on whether you get heat exchanges orders or vessels order, the value addition keeps changing depending on the product portfolio.
Mohit Surana
I understand, sir. Got it. Thank you, sir. Thank you for answering the questions.
Reginaldo Dsouza
Pleasure. Thank you.
Operator
Thank you. We have our next question from the line of Pankaj Mutwani from Equis Securities. Please go-ahead.
Pankaj Motwani
Yeah, thank you for the opportunity. So just I have just a single option. So like you are guiding for 25% growth in FY ’26, like it will translate revenue from around INR916 crore. So — and also in the previous call, like you had guided the typical lead-time from the order book-to-revenue is around, I think 11 to 12 months. And as of now, order book stands at around INR741 crores. So like based on your stated execution cycle. So like the INR741 crores whole lead will take FY ’26, so like — so how would — and even if we receive fresh order after this, so like the contribution from the order will start in FY ’21 only. So like how would you — how are you justifying the growth of 25% growth in FY ’24?
Reginaldo Dsouza
Yeah. So generally, as a principal, you would have heard me saying in the past too, when we open up a year that is on 1st of April of any year, we wish to have about 80% kind of an order booking in our kitty because the balance 20% we generally keep for a short delivery shutdown requirements from our customers, which are — which are like very good on margins generally. So that’s how we normally fill our capacity. Now if you look at 25% growth, it means that we should have been somewhere around 760 kind of an opening order book position. As against that we are roughly 740 around. So it’s — so we are very sure that the short-term delivery items the shutdown requirements, which generally ranges anywhere between 15% to 20% is up for the taking for us because they generally come with seven to eight months kind of a delivery. So when we talk about 11 to 12 months average delivery cycle, it’s an average. So some are seven to eight months and some are 12 to 14 months. So it’s averaged out. So based on the inquiry positions in our hand and what we know, we are pretty confident that we should be able to achieve this guidance.
Pankaj Motwani
Can you justify the number of — from this short-duration orders. So like what could be the orders from this pipeline?
Reginaldo Dsouza
Yeah. So we need — we see, we need about INR150 crores to INR200 crores of short delivery items, which would be within seven to eight months kind of a delivery, which we are pretty confident of getting. And just to add and clarify, the products which are there, they are generally six to seven months kind of a delivery because they are a different product, they are silos, which does not need material of those requirements where we have to import or with a larger long-lead time, we get those material within two weeks from TO. So those are short delivery item and that is where we are focusing on right now to build this revenue growth for this year. And you will see largely the orders being booked for those kind of products, which we can even make it in Naval or we can even make it in our Qatar facility.
Pankaj Motwani
Got it. And one more question. You have — I think you have — you have had a tie-up with the — with the Graham Corporation USA. So like in the last call, like you have mentioned that you are receiving inquiries from them. So like is there any order converted from that pipeline.
Reginaldo Dsouza
So those — we are right now working on three inquiries for them. Those inquiries are still live. One is Indian to be precise and two are export. Not concluded yet, but on the verge of conclusion, of course, one is in US so we are expecting it. The decision to be made only maybe somewhere in the month of June. But there is an Indian project which should conclude soon. So we have not lost anything yet. All three are on-board. We are in discussions and something should materialize on.
Pankaj Motwani
Okay, got it. That was from my side. Thank you. Thank you so much.
Operator
Thank you. We have a follow-up question from the line of Mehul Panjwani from 40. Please go-ahead.
Unidentified Participant
Thank you for the opportunity. Sir, the INR1,200 crores which you mentioned, which is going to come from the three facilities. Are these facilities fungible are the capacities
Reginaldo Dsouza
Order and are surely fungible to some extent because the crane and other facilities are not to that to that extent like what we have here. But surely both the facilities in Ahmedabad and Keda are fungible.
Unidentified Participant
Okay, sir. Thank you so much and all the best.
Reginaldo Dsouza
Yeah. Thank you.
Operator
Thank you. We have our next question from the line of Bhavi Sonawala from Capital. Please go-ahead. MR. Mr, we can’t hear you. Can you please use your handset?
Bhavya Sonawala
Am I audible?
Operator
Yeah. Now please go-ahead.
Bhavya Sonawala
Yeah. Yeah. Thank you for the opportunity, sir. Just one question. I think previously you were saying even with the tariffs in the current situation, if they don’t get reconsidered, we still stand a better chance compared to other geographies. So can you just lay out what other geographies do we compete with in terms of our product portfolio?.
Reginaldo Dsouza
Hi. So for the product portfolio that we deal with, generally, we see competition coming from China. We come — see competition coming from Mexico and we see competition coming from Europe, especially Italy and other parts. So obviously, Europe is generally not an option for these kind of products because of the current cost structure there. Mexico has been hit with a high tariff as you know, China Plus and along with the tariff is definitely difficult for them. So in all probabilities, any order getting finalized, India still holds an advantaged position when it comes to tariff scenarios.
Bhavya Sonawala
Understood. And just another question if I can squeeze in. You spoke about how we’re going into exotic metacology and a lot of these metals need to be imported and the lithium is quite a bit. So can you just throw some light on how — what’s the difference between if you do a normal — a normal metal fabrication compared to a high metallurgies, if that’s possible
Reginaldo Dsouza
Okay. So just for simplicity’s sake, let’s take only two products. One is carbon steel, which is run-of-the mill steel, not too complicated and it’s available in India in the mills like, Mittal and Zindal. Now I would get that material within three months from my PO to them. Now if you go one-step higher, which is low alloyed steel material, maybe grade 22 and with little higher thickness, I have to go to Europe. There is no other choice because that’s not made in India. None of these meals supply those high thicknesses and grade 22. Now that material would need anywhere between six to seven months-to be landed at my place. So that’s the kind of a difference. So generally on an average, the difference would be close to about three months, which is 12 weeks a landed material at a sharp difference. And that is where sometimes delivery becomes a challenge for us.
Bhavya Sonawala
Okay. So basically where I was coming from, just want to understand like, let’s say you said that the exotic metalogy in this example comes from Europe, would there be any advantage to the local European producer because there is — the shipping charges don’t levy for him. So any benefit for him or that doesn’t matter?
Reginaldo Dsouza
Yeah. No. So if you look at 95% of our products, even more than that in fact, goes for non-European countries because generally our customers, EPC companies are from Europe, but they are generally for projects outside Europe, generally oil and gas, petrochemicals, fertilizers are generally in the other parts of the world. So they do have transportation. And with the cost structure that is given today, we know we compete with them on a regular basis. But with the high-energy cost for the products that we deal as Anup, I don’t see — we’ve seen them in much competitions anytime in the past or in the future.
Bhavya Sonawala
Sure thank you so much, sir. All the best.
Reginaldo Dsouza
Thank you. Yeah.
Operator
Thank you. We have our next question from the line of Vidant Sarda from Nirmal Bank Securities. Please go-ahead.
Vedant Sarda
Thank you for giving the opportunity. Sir, I want to ask you, like if our Phase-3 comes in operation, so how much kind of revenue we could generate from the complete capacity?
Reginaldo Dsouza
So the complete macro plan for Qeda is seven manufacturing base. Phase-3 will mean another three more base because Phase-1 and Phase-2 will be four days. So once we have the three days in-place, which is Phase-3, which means we will have all seven days it can generate close to about INR1,200 crores from that facility
Vedant Sarda
1,200, total or Keda,
Reginaldo Dsouza
Keda,
Vedant Sarda
Keda and total Keda, Mabel and
Reginaldo Dsouza
With all the seven manufacturing days in-place,
Vedant Sarda
Keda, and Abal facility all revenue would be INR1,200.
Reginaldo Dsouza
No, no, no, no. So let me just explain. Kedar, the master plan is for seven manufacturing base. With this space completion, we will have four base built-in. We will have space for another three bigger base. If all the seven bays are built-in, facility can give you anywhere between INR1,000 crores to INR1,200 crores depending on the product mix. Maximum it can go up to INR1,200 crores. Our order facility can generate up to INR600 crores and if is in the current scenario with the three manufacturing waste that we have, that can generate another INR200. So INR1,200, INR600 and INR200. So roughly about INR2,000 crores is something that all the three facilities put together in-full scale can generate?
Vedant Sarda
Thank you for the clarity, sir. And these calculations have been made. Is that the current prices or you have considered some price hikes and like how they are calculated or volume growth, order growth,
Reginaldo Dsouza
Yeah. So inflationary factors would be factored in. But generally these are from capacity additions in terms of metric tons of fabrication that we can do every year.
Vedant Sarda
Okay, only inflation part we are considering that nothing else in the current market prices. Okay. Thank you, sir.
Operator
Thank you. As there are no further questions, I now hand the conference over to the management for closing comments?
Reginaldo Dsouza
Yeah, so thank you and I once again take this opportunity to thank my wonderful team at Anuk and to each and everyone helping us deliver performance. A big thank you to all of you, our shareholders for your trust and support as always. Thank you. And on behalf of my team, I wish all of you happy days ahead. Take care and stay healthy. Thank you so much.
Operator
Thank you. On behalf of Anup Engineering Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.