Anup has acquired 100% equity shares of Mabel Engineering Private Limited
Mabel is engaged in the business of Engineering,
fabrication, supply and erection and delivering
solutions for pressure vessels, reactors, storage
tanks, silos, heat exchangers, heavy structural
components, chimneys, and piping systems.
Turnover: INR 27.11 Crores (For the Financial
Year ended 31.03.2023).
SYNERGIES
• Expansion of Product Portfolio – Venturing into
additional products of silos, storage tanks and
other site fabricated process equipment.
• Geographical Spread – Provides a strong
geographical spread to cater to Southern part of
India and easy access to ports conducive for
exports to SEFE region.
• Engineering Bandwidth – Enhances our
engineering capabilities in to designing silos,
tankages and site fabricated solutions for
complex projects.
•Capacity Expansion – A strong catalyst to our
growth journey contributing ~10 to 12% of our
annual revenue. The dedicated manufacturing
bays for exotic materials provide ample
opportunities to manufacture and supply exotic
and high grade materials, allowing us cater to
larger opportunity basket.
This is a very important milestone
complimenting our recent capacity expansion at
Kheda (Gujarat), helping us accelerate our
growth journey.
Had attended Q4FY24 con call, would like to share higlights along with my comments:
Revenue & OB:
Achieved all guidance i.e. 25-30% Revenue Growth and 20%+ EBITDA for FY24. In fact, looking at OB along with recent Mable acquisition - company is headed for 35% growth for FY25 while building OB for FY26 as well.
OB stands at 854cr and 57.2% are exports. However, this is double-edged sword in terms of OB being fixed-priced contracts. So, Raw Material Booking on continous basis will be key to secure them at right costs.
Management hinted that we could book at lot more OB but want to be within our executable limits (On-time delivery) and within our desired margins.
Mentioned about reaching 1000cr. mark revenue in FY27.
CAPEX and Growth Initiatives:
Company acquired Mable Engineering for 33cr. The annual revenue may touch 50-60Cr in FY25, this is based on single-shift basis meaning potential of revenue is lot more. Post FY25, company plans to really accelerate Mable Engineering.
Mable is giving advantage of expanding product line into Silos, Geography Diversification, and making some of Anup’s equipment in Mable facility.
Earlier, company planned to increase Kheda Facility with additional 0.5 bay. This will be done in Q1 and operational in Q2. On full-year basis the 2-bays currently at kheda will generate 200cr (For FY26).
Company will go plan for Phase II expansion at Kheda by FY25-end. Facility will come in quickly and CAPEX willl be lower v/s Phase I because all utility around was build during Phase I.
Company discussed plans to start Skids and Moulds in Phase-III. So, quite a crystal clear objective in terms of how to take this company forward step-by-step.
Other Important KTA:
Exports are majorly into US and Middle East. Diversified the revenue and not dependend on one location…
Exports have 30-40% advances, hence a lot of savings in terms of Working Capital. So, return ratios will improve a lot. Exports do have better margins but want to take FOREX fluctuation into account. Had FOREX been constant, the margins would be >20%.
Note: Have highlighted only the points which I think are important. Might have missed some of the remarks made by management.
My Take:
I am pretty happy with way company guided on exports. There will be better WC efficiency as 30-40% will be advances. There is possibility to achive >20% EBITDA on exports. Hence, with Mable, it looks 35% revenue growth is within reach for FY25. And, on top the quality of earning is a big plus as the cash conversion is prestine.
Pending orderbook stands at Rs 810 crore as on June 2024
Of total Q1 revenues Rs 8 crore was billed from Kheda plant and with the current plan in place this plant will bill Rs 175 crores in FY25
The revenue from the acquired business “Mabel” will deliver revenues of Rs 50 crore for FY25
The design operations at Vadodara is a 50 member team and the wish is to grow this to a bigger size
With the current capacity in place the company can deliver revenues of approximately Rs 1000 crore
The strategy to expand geographically to newer customers and countries will keep continuing
For FY25 based on existing order book revenues should be Rs 700 crore with an EBITDA margin of 20% plus
Participants
Abakkus Asset Managers
Samasa Capital
Shubh Labh Research
QnA
The pending orderbook should end FY25 at around Rs 900 crores
The total capacity put together at all three plants should have a revenue potential of Rs 1000 crore with Mabel contributing Rs 50 crores
Around end of CY25 will take a call on building phase 2 at Kheda and construction period is around 11 months for the same for constructing one additional bay
Each new bay at Kheda shall cost Rs 40-50 crore and it should give an asset turnover of around 3-4 times
On an annualized basis around 20-30% of the order execution is from hydrogen sector and of this majority will be exports to USA, Canada and NEOM project in Saudi Arabia
The project for Saudi Arabia was the first time company executed a project in the green hydrogen space in Saudi Arabia
The production will now be segregated as the Ahmedabad plant making heat exchangers only and the Kheda plant will make reactors, column and vessels
