its reading a bit too much. they have undergone a demerger recently. Anup is a really sound engineering company. these issues should subside in due course
It is not being reading too much in the context that companies have gone bankrupt due to these issues. I guess everyone has to use their own prudent judgement in investing. If it sin’t a cause for concern for you then it is your opinion and if it is a cause of concern then it is mine.
i know about the quality of the company, technology prowess and ethical standards from personal checks, therefore i am not reading too much into it, my statement was in that context, not in general.
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I am not commenting on the quality of company’s product. They have marquee customers so they must be doing something right. My concern was the governance.
ANUP ENGINEERING - ABAKKUS EMERGING OPPORTUNITIES FUND Buys 2,05,500 shares @ Rs 410. per share (Sunil Singhania)
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Its criminal how undercovered this company is. Anup is one of the early pioneers in the heat exchanger business. It has been doing regular business with Engineers India, there are very few companies who have the necessary approvals from Engineers india. no small time fabricator can get contracts through Engineers India, so the demand coming through the said entity is steady in nature especially given the huge upcoming investments in oil and Gas along with all the work going on in oil refineries to meet BS6 fuel guidelines.
another moat for the company is that companies such as Anup have been long term vendors of Engineers India, and provide maintanance on earlier supplied equipments, there is constant supply of spare parts as per maintenance demand as the equipment is usually customised and the spare parts can only be sourced from OEM’s, which keeps a steady relationship with Engineers india and create added dependability on existing OEM and thus the old vendors are likely to see more of the incremental business also.
The company operates in the small ticket size , which is a space left vacant by the likes of Godrej and L&T and thus the high margins. With increasing investments in chemicals and petrochemicals , the demand for heat exchangers and pressure vessels will sustain. Anup should do well and honestly it should be trading at higher valuations than what it gets at present.
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Being a mechanical engineer in oil and gas industry…my view is that there is no much new capex going to happen…these heatexchangers and reactors last for good 30 years and process changes over time.The process licenser will have their approved fabricator.I am personally not so bullish on heat exchanger industry.
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There was a company called GEI Industrial Systems, which was a strong player in heat exchangers in the previous capex cycle of 2003-2007. They are not even traded anymore. The industry is not that great to be very gung-ho about.
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Anup has seen many such cycles…plus the consistent ebidta margins is a demonstation of their niche capabilities
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Reena Bhagwati (Director)
bought 12,690 shares between 26-31st Dec; approx value 72 lakhs.
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The Anup Engineering Ltd - Initiating Coverage Report.pdf (1.1 MB)
Buy Report on Anup by Philip Capital.
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Article, a little dated though:
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As per company source, the 40 odd crores of ICD taken by Arvind has been fully returned to ANUP.
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Reena Bhagwati (Director)
bought another 5000 shares on 25th feb; approx value 26.8 lakhs.
HDFC Mutual Fund also added to their position…total position crosses 5% in the company.
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Release of Pledge by Bajaj Finance ~1.5%
latest management interview on growth prospects
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This stock looks good and have symptoms of a big multibagger:
- debt free balance sheet
- visible growth
- small base and Market cap
- high ROE nd ROCE
- high operating margins
- free cash flow generation
- growing interest from big investors
- most importantly, a company in ignored sector with good economics nd mgt
It’s not GMM pfaudler but may be better than that…
Matter of time…
Disc: invested
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As per the management interview, they are very confident to achieve Revenue of INR 1000 Crores by FY 24 and Bottom line NP of 200 Crores. I found from the shareholding pattern that HDFC and Abacus PE Fund have invested considerably in this company. Any chance of rerating? If the guidance turns into reality, assuming EPS of 200 by FY 2020 at a PE of 15, price has to hit minimum Rs.3000 and the sky is the limit. Seeking the views from learned members.
Lets say that they dont meet their 1000 cr guidance.
they do 750 crs, lets say their PAT margins reduce to 13% from the current 16-17%.
that gives us an EPS of 95. At the peak of the cycle, such process equipment firms, in a high growth phase can command 30 times minimum. lets be conservative,
even at 20 times, we could see it touch 1900, thats 3x from CMP.
keep in mind all figures taken are conservative. peak of cycle exuberance can re rate stock and make SKY THE LIMIT. 
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