Q3FY21 Result Update - The Anup Engineering - ICICI Direct

Anup's Q3FY21 performance was subpar led by lower execution on account of night curfew in Ahmedabad post Diwali (loss of 20 days). Further, dispatch of heat-exchangers remained an issue during the curfew days as the company faced logistic challenges. Bottomline was cushioned, led by reversal of taxation as the company adopted a lower tax rate under Sec-115-BAA. Revenue for the quarter came in at Rs. 29 crore, down 62% YoY, 66% QoQ. Execution was impacted on account of night curfew in Ahmedabad. On the positive side, the company has finished goods stock of Rs. 28 crore value as on December end. EBIDTA came in at Rs. 6.8 crore, down 68% YoY entailing a margin of 23% vs. 27% YoY. Employee cost increased 26% YoY to Rs. 4.6 crore while other expenses declined 4% YoY to Rs. 14.2 crore. Employee cost increased 26% YoY to Rs. 4.6 crore while other expenses declined 4% YoY to Rs. 14.2 crore. PAT declined 34% YoY to Rs. 9.1 crore cushioned by negative tax charge of Rs. 4.1 crore.

Valuation & Outlook

Anup is one of the top three process equipment manufacturers in India with a strong orderbook, debt free b/s and ample liquidity to support execution. Ongoing debottlenecking of capacity and new greenfield capex are expected to open up new opportunities in heavy & complex equipment orders with higher ticket size. However, it is important to see how Q4FY21 & H1FY22 pans out in terms of execution & order inflows. We, introduce FY23E numbers and pencil in revenue, EBIDTA & PAT CAGR of 31.1% 34.5% & 25.9% for FY21E-FY23E, respectively. We value Anup at 11x FY23E EPS. We revise rating from BUY to HOLD with a target price of Rs. 680 (Rs. 750 earlier).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_AnupEngineering_Q3FY21.pdf

Source : Equity Bulls

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