Earnings Call Transcript - XNSE:ANUP 2026-11-06

Operator

Ladies and gentlemen, good day and welcome to Q2 and FY27 Earnings Conference Call of the Anoop Engineering Limited. As a reminder, all participant lines will win the lesson only more and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please please run or play server pressing star, then zero on your cash-to-end phone. Please note that this conference is being recorded. Before we proceed to the call, let me remind you that discussion may contain certain forward-looking statements that may involve known and unknown risks, uncertainties, and other factors. It may be viewed in conjunction with a business risk that could cause actual result, performance, or achievement to differ significantly from what has been expressed or implied in such forward-looking statements. Please note that company has uploaded the result, press release, and press release. It was the presentation and also the outcome of the board meeting on the website of Stock Exchange and website of the company. I now have the conference over to Mr. Reginwando D'Souza, managing director and CEO of the company. After the speech of Mr. D'Souza, Mr. Puneet Lanphai, chairman and non-executive director of the company, will give insights of the company's performance. Thank you and over to you soon.

Reginwando D'Souza, CEO

Thank you. Greetings from team Anup to all the members present on the call. I will take this opportunity to give a brief on our performance for Q2. I am sure we all understand the current global uncertainties and the associated headwinds for our business. With this consideration, I sincerely believe that our company has Being able to hold ground and continue gradually towards this annual goal. As explained during the last call, we did plan a gradual revenue buildup from quarter 1, quarter 2, and a strong H2. Despite the longer than anticipated disruptions in supply chains, elevated energy prices resulting into high raw material costs. And also, more than double shipping costs due to the ongoing wars, we have been able to maintain the desired progress on most projects in line with our customer contractual requirements. The revenue numbers for H1 are in line with our plan, and new projects are moving well on the shop floor, with good revenue milestones landing in Q3 and Q4. The consolidated revenue for quarter 2 has been 182 crores, a 46% increase from quarter 1, with an EBITDA of 17.5 crores at 9.6%. This margin is a reflection of under-absorption of fixed cost due to lower revenue. Fixed cost remains on plan at 62 crores. The margins will improve with substantially higher revenues planned in H2, helping fixed cost absorption. The material cost has been elevated at about 6% with inward freight contributing to about 2%. This is largely due to the impact of higher raw material cost and the freight component. The conventional revenue has been at around 50%, which is as per our strategic intent. The conventional energy sector is demonstrating good traction with about 80% revenue coming from oil and gas, petrochemicals, and thermal power. On the product segment, heat exchangers contributes to about 51%, 42% on vessels and reactors. And 7% from silos and other companies. The order booking continues to be encouraging over the last three quarters. The new order booking for this year has been 674 crores as on date, which has surpassed the order booking for the whole of last year. The pending order booked as on date is 947 crores. With good opportunities on hand, we are confident of continuing the momentum on the order booking going forward. On the strategic developments, we continue the focus on getting into more complex and proprietary products. We are glad that we have added a few important products in H1, namely two products of Lammus Technology Netherlands, One each of TK Uday Germany and L&T. These are all high value for equipment business with very less competition, largely from Tier 1 manufacturers, thus improving our order conversion. We continue to pursue with this two more important global licenses, and all going well, we should complete qualifications in this year for these two more licenses. And as articulated earlier, we now move with a very strong focus on critical and proprietary licensed equipment. On the capacity front, with our three locations, that is Ahmedabad, Cheda, and Chennai, we can deliver about 20,000 metric tons per year with approximately 1,200 crore revenue. Technical and site services business is moving strong with three sites under execution at this point in time. Completion of these projects is planned in H2. To give you a brief on the overall market outlook, we see a very strong traction for conventional energy mix for oil and gas, petrochemicals, and thermal power. Fertilizer projects are also hitting ground more than expected in India, Africa, and also in South America. We see thermal power strong at least for the next three years, especially in India. Nuclear also cause strong opportunities in the future. We strongly believe that the energy security, energy demand to fulfill growth aspirations of developing nations, and the exponential energy electricity demand for new age technology means the conventional energy mix will see strong demand for the next 8 to 10 years. Energy, we will also see momentum in many regions of the world to tackle climate change. On the financials for this year, I believe with a clear visibility on projects to be executed in the balanced six months of this year and costs defined to a large extent, we have a fairly good visibility. With quarter 3 and quarter 4 ramping up on revenues, we should end the year with a revenue between 840 to 860 crores, with an EBITDA in the range of 120 to 128 crores. Further, a pending order book of 941 crores. Means around 400 crores carry over for the next financial year, which covers almost 5 months revenue for the next year. And with good business opportunities in the next few months, we will be able to maintain a healthy order book to ensure FY28 revenue growth of about 20%. We will continue to navigate the current global uncertainties. with supply chain and shipping still being a challenge, and strategize to protect our cost. Hopefully, the walls should settle down, opening crucial shipping waterways, easing the energy and thereby the downstream cost. I have my opening remarks and I would hand over to Puneet for his comments.

Puneet Lanphai, Chairman

Thank you, Reggie, and good afternoon to everyone. It's a pleasure to be here. Reggie has very comprehensively covered the status of where we stand today, so I will be extremely brief. I think a couple of themes are very important, and one should focus on those for the remainder of the year. I think number one... Though we've had a very disappointing H1 compared to our historic performance over the last three, four years, the number to track is the laddering up of revenue from quarter one to quarter two. And as I have reviewed things, the second half of the year has started off well, and we are quite well positioned to achieve that further ladder up and climb back to historic levels, which we should approach by the end of the year. So we are looking forward to a strong H2. The second theme that I'm particularly pleased about is... The all-time high orders in hand, I don't think we have ever had about 900 crores pending order book. So that points to a healthy future, a strong H2, and on current trajectory, a very strong financial year 28. It's also heartening to see that the... New orders that are coming in are coming at much improved margins, despite a very challenging raw materials scenario. So on the whole, a challenging first half to the year, predominantly driven by our challenged order booking in the previous year. This year's order booking, however, is very encouraging. Overall, we feel that we are headed in the right direction, and we should deliver on these promises. So with that, I will end my comments and open the floor for questions, and will request Reggie to take the lead on answering questions, and I will jump in as and when required.

Operator

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question may press star and one on the touchtone telephone. If you wish to remove yourself from question queue, you may press star and two. Participants are requested to use hands as well asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Jaini Gandhi from Ambit Kapital. Please go ahead.

Jaini Gandhi, Analyst — Ambit Kapital

Hi, good evening. Thank you for the opportunity. I just wanted some clarification on the order intake and backlog numbers. While I understand we have given the number till date, but I would appreciate if we would get the exact number for the quarter ended in September. That would give us some clarity. Hello, hi, am I audible?

Operator

Yes, yes.

Reginwando D'Souza, CEO

Exit a new order intake or the closing order book for 30th September.

Samir Dhakur, Analyst — Ambed Private Council

I'm sorry, I couldn't hear you.

Operator

Reggie, you're cutting out. We can't hear you.

Operator

Hello, sir, your voice is not audible.

Operator

Can you hear me now, can you hear me?

Jaini Gandhi, Analyst — Ambit Kapital

Yes, sir, better now.

Reginwando D'Souza, CEO

Yeah, so our pending order book position as on 30th September was 864, as on date is 941, and if you want the exact new order intake for this financial year, YTD as on 30th September was 597. And as on date is 6-7-4.

Jaini Gandhi, Analyst — Ambit Kapital

All right. That is very helpful. Thank you so much. My next question is that we secured order for three proprietary licensed products, and we plan to add more equipment going ahead. So I just wanted to understand the lay of the land, like, you know, what are these products and how will they expand our opportunities all over? And will these be margin accretive, you know, basically these things?

Reginwando D'Souza, CEO

Yeah, so as explained earlier, these are the proprietary tier one products, which are basically into the niche segment. And we have limited competition. So these broadly would allow us better conversion, since we are going to compete with only two or three in the world. And the second is, these come with a very large value per equipment. On an average, it would be about 8 to 10 crores per equipment, unlike the average that we have today of around 3 crores per equipment. So largely, these help us to compete better. Have a better conversion and also have very large number of equipments on the shop floor for execution.

Jaini Gandhi, Analyst — Ambit Kapital

Alright, understood. And if I could just add one more, I wanted to understand our geographic mix now. So, export revenue for first half were close to 49%, but currently in the backlog, export orders are close to 33-34%. So, are we expecting more orders to come from export side in the coming half, once the geopolitical tensions cooled off, or how are we looking at that mix going ahead?

Reginwando D'Souza, CEO

Yeah, irrespective of the geopolitics, I believe from the current backlog of inquiries that we have on hand, we have a larger ticket size of expected orders coming from exports. So, largely, squarely, we would come back to about 50% average exports even for the next year.

Jaini Gandhi, Analyst — Ambit Kapital

Okay. Thank you so much. I'll get back in the queue. All the rest.

Reginwando D'Souza, CEO

Sure. Thank you.

Operator

Thank you. The next question is from the line of Mohit Sarana from Munat Network Capital. Please go ahead.

Mohit Sarana, Analyst — Munat Network Capital

Good evening, sir. Thank you for the opportunity. Sir, again, one question on the order book. I think that includes letter of intent. Can you just give a break up how much is the letter of intent in the order book currently?

Reginwando D'Souza, CEO

Yes, good evening. So broadly, the letter of intent is where we get a confirmation from the customer with zero date to be started off, and the official PO follows in maybe two to three weeks down the line. Now, if you want the exact number of LIS, that number is about 40 crores is coming from the LIS. These are nothing but conformed orders where zero data has already started in, and we have also started work. It's just a regularization of the PO, which normally the EPC companies and public sector units take some time to deliver the actual PS.

Mohit Sarana, Analyst — Munat Network Capital

Perfect, sir. Understood. And, sir, in terms of your order intakes, Um, what kind of run rate we are expecting, say, maybe Q4 onwards? Currently, I mean, you mentioned it's roughly, for Q2, I think it was around 140 crores, was the kind of order intake, if I back calculate. What kind of run rate we are expecting from Q4 onwards? Thanks, Navar.

Reginwando D'Souza, CEO

So, for order book, a new order book, if you see, if you back calculate, I think the quarter one was roughly about 310 crores. Quarter two was 283. And our intent going forward also is, considering our cycle time of about 12 months from order to delivery, considering our capacities in place, we should be booking 250 to 300 crores every quarter.

Mohit Sarana, Analyst — Munat Network Capital

Understood, sir.

Operator

That's helpful, sir. Thank you so much.

Operator

Thank you. The next question is from the line of circuit support from Kapoor and Company. Please go ahead.

Speaker 9

Yeah. Namaskar. I hope I'm all good.

Reginwando D'Souza, CEO

Yeah, Namaskar, you are. Go ahead.

Speaker 9

Yeah, thank you, sir. Sir, just to reiterate what you mentioned in your opening remark, that H2 would be more of a normalized run rate, and we will be looking to close the year at around 800 crore of top line. That is what it is, and the EBITDA number you have given is at 128 crore. Sir, please correct me on these two figures.

Reginwando D'Souza, CEO

Yes, so we have provided the guidance in terms of a range. So, the top line, we could be anywhere between 840 to 860 crores. And on the profit, on the EBITDA, we should be 120 to 128, within this range.

Speaker 9

120 to 128.

Reginwando D'Souza, CEO

That's correct. So, on an average, anywhere between 14 to 15% EBITDA margin. And a top line of around 840 to 860.

Speaker 9

So, from the, what would lead to now the expansion in the EBITDA margin, because the revenue will move up by, say, around something around 200, will inch to 200, slightly above 200, but the margin expansion will be significant. That is what the color should be if these numbers are delivered. So, if you could just explain what will lead to this significant margin expansion, and then on the pending order book on which we have lower margins, we have been able to complete the execution. If you would just give some color of what changes have happened And that will lead to this significant expansion in market.

Reginwando D'Souza, CEO

Yeah, so if you look at the executions in quarter one and quarter two, these are largely the orders that we have booked in each one of last financial year. So if you look at last financial year numbers, we would have booked around 250 crores kind of an order book as against our average requirement of about 500 to 600. So broadly, squarely, our H1 order booking of last year was poor. And that came in with a rider that we had to move very aggressively to book orders. If you have heard me on the call, we had to book some orders on very, very aggressive margins just to cover up our fixed costs. And those are the ones that are actually getting executed in quarter one and quarter two because our order to delivery cycle is roughly about 11 to 12 months. Now, what we have booked subsequently in quarter 4 of last financial year and quarter 1 of this financial year, we have booked that at a much improved margin as compared because we could actually build up the actual cost of raw material as on today. And those are the items which are at a much improved margins, which are going to be reflecting into the revenue of quarter three and quarter four. And that is how the if you look at quarter four, our margins for those will be 20 percent plus for the quarter four execution because we have taken it back to our improved margins. So on an average chart basis, we will end up into 14 to 15 percent margin profile towards the end of the year. So largely, in short to answer, the revenue that is lending up into quarter three and largely in quarter four are coming with a much improved margin.

Puneet Lanphai, Chairman

Thank you. Also, Reggie, there is the fact that in quarter one and quarter two, there is a huge under-absorption of fixed costs because the revenue hasn't been there, right? I mean, our revenue has been low because of low order booking in the first half of the last year. Therefore, fixed costs are eating away the margin. That's correct. That's correct.

Speaker 9

So, it is they presume that last year quarter 2 EBITDA margin of this 20-22 percent, that was a comparable number for this quarter, are achievable in quarter 4, at quarter 4 execution. That could be a good understanding.

Reginwando D'Souza, CEO

Yeah, so if you actually put the numbers together for us to come to a bit of 120 and 128, which is roughly about in the range of 14 to 15 percent, your quarter four will have to be around 20 to 22 percent if you work out mathematically. And since we have a very good clarity in terms of which projects are going to be completed during quarter four, and the cost we have on our hands, so we have actually worked out the numbers. So your assumption is right.

Speaker 9

Okay, so we have worked for the RM part, and all the cost escalation impact also, while projecting these numbers.

Reginwando D'Souza, CEO

Yeah, so only thing is, as I mentioned in my opening remarks, shipping is something which is still uncertain, but largely, I don't think it's going to get escalated beyond this so much. So, but largely, yes, it's taken care of.

Puneet Lanphai, Chairman

Yes, so if we execute to plan, those should be the numbers.

Speaker 9

Sir, and about this consultancy part of the story, I did not attend the last call, so I beg your pardon for that. How is this business shaping up, I think, so some very high margin, this is a high margin business which we were contemplating to develop over a period of time. So, if you could just throw some color, where are we in terms of our preparation, and when will the execution or the deliverables for the call that LG business, we would be able to depict in our numbers.

Reginwando D'Souza, CEO

Yeah, so this was a vertical which we termed as ANOP Technical Services, which is nothing but the health check assessment of equipment at site, repair work at site, and also some amount of site fabrication. We did, as I mentioned, we did some deep stick study last time and did some projects which were successful. Now, we have created a vertical for this. This year, we expect this business to be around 50 pros. We've got some very good traction in the first six months. We are executing also multiple projects at this point in time. And the margin profile is anywhere between 30 to 40 percent, just being it's a repair work. So, obviously, the margins we expect are much higher than our normal products. So, the margin profile would be in the range of 30 to 40%. And this year, we expect this to be around 50 crores. And as I mentioned, our strategic intent is to take this business to about 200 crores in the next three years.

Speaker 9

And for the Mabel contribution, sir, can you outline how is that unit? And I missed the Chennai part of the story. What have been our manufacturing capabilities there and what kind of capacity have we built up on the Chennai unit?

Reginwando D'Souza, CEO

So, Chenna, as you know, this was an acquisition which we broadly did for two reasons. One was to have a geographical spread down south of India, and the second was to acquire the capability of silos and tanks. These are nothing but some products where we were not qualified with EIL, and that's the reason we got these two products. Last year, Mabel was about 43 crores. This year, based on the order booking and the progress as on date, we should end the year close to about 65 to 70 crores coming from Mabel. So significant contribution coming from there, almost twice the turnover of last year. And what will be a significant part going forward in the next three years?

Speaker 9

If I may add that, how does the order booking shape up for Mabel as an entity? And secondly, on the borrowing part, although borrowing in the capex part, any kind of capex that is required to be done by us in terms of this execution part, we did around 13, 14 crore is what we see in the cash flow. So, what is the number that we may look forward?

Reginwando D'Souza, CEO

Yes, so on the KFAC side, Saket, with the last piece of expansion which is on right now at KEDA. Which is nothing but a covering of one of the bay. With this quarter, we would have done with our investment in terms of capacity expansion. No more capacity expansion. We may invest incremental for capability going forward, but largely no further investment in capacity at least for the next two years. So I believe this is a time where we have put in capacity in place, and now we would be milking these investments going forward. At Maple, specifically, at Maple, specifically, we don't intend to do any KFACs, at least for the next two years. We have three manufacturing bays there, and I believe we have a runway for the next two years at Maple.

Speaker 9

Okay. And then one more figure. You mentioned that at optimal capacity, the total infrastructure that we have today, we may exhibit a revenue of 1200 crore at optimum. That is what the number should be?

Reginwando D'Souza, CEO

That is correct. So the current capacity with all the three plants put together, as is today, is roughly about 20,000 metric tons per year, which should convert with a fairly good product mix of 1,200 crore revenue for the year.

Speaker 9

And taking into account the bid pipeline part and the order booking currently and also in time to come, what are we anticipating or what should be a good number, although it's very fast for us, but four months down the line when we close the year as a whole, what kind of order book would be a good number to reach closer to this 1200 optimum capacity? What should we eye, sir, or are we eyeing in terms of the things?

Reginwando D'Souza, CEO

Yeah, yeah. So, considering our current order to delivery cycle of 11 to 12 months and the capacities in place, we broadly, at any given point in time, should have a pending order book in between 800 to 900 crores. And what we believe, based on the current order book and the inquiry pipeline on hand, come 1st of April 2027, we should open the year with an order book position of 800 to 900 cross. And that has been our strategic intent always that 80% of the turnover for the year, you should open up with 20% capacity. We generally keep for short-term delivery items, which are shut down and others where there is an opportunity to earn a higher margin. So 80% of your annual turnover, if you start the year with, should be a pretty decent number. And just to reconfirm, we should be opening the year with an order book of 800 to 900 crores.

Speaker 9

Okay, my last point, sir, I missed it, that the CWIP closing balance for September is closer to 8 crores. So, this is all maintenance, capex type of work, the money that is spending, or what should we read this number to? 7.77 crores.

Reginwando D'Souza, CEO

So, this is on the current CapEx that is on, as I said, in Kheda. We are covering the Bay No. 1. So, that's the pending in progress, which we should wind up by December.

Speaker 5

Right, sir. Thank you, sir. All the best to the team. So, be probably a prosperous somewhat ahead. I joined the team, sir.

Reginwando D'Souza, CEO

Thank you, Sakit, and wish you two a very happy Diwali.

Operator

Thank you. I remind you to all the participants in my press jar and want to ask questions. The next follow-up question is from the line of Mohit Surana from Monat Network. Please go ahead.

Mohit Sarana, Analyst — Munat Network Capital

Thank you for the opportunity again. Sir, if you can give some understanding of our Middle East exposure, I think the Q1 was the period when we faced the most impact. And one of the reason was our exposure to the Middle East. So just wanted to understand how much is our exposure currently, and how are we looking to further diversify so as to insulate us from future geopolitical concerns.

Reginwando D'Souza, CEO

Yeah, so just to clarify, I don't think a Q1 was because of exposure to Middle East, because as you know, largely our contracts are FOB India Port. The movement from India port to the site is generally the customer's responsibility. So largely, if you look at our annual turnover and historical numbers also, Middle East generally account for about 30% of our revenue for the year. And it's an important reason. In fact, we are focusing on growing that vertical still further because of a lot of opportunities in that region for gas project especially. And in Middle East, generally, we are working with only two... Broad-based customers. One is Saudi Aramco, and the second one is Aetnog, Abu Dhabi National Oil Company. These are the only two focus areas which are more secure and consistent in terms of the business. The other part to your question of how are we trying to grow this further, so as I explained, we have a very focused approach on expanding geographically. Now, which are the regions? Of course, the United States is a very strong part, which we want to take about 30% of our exports coming from the United States, and some parts of Africa, which is Nigeria and Kenya. These are the two strong regions where we are focused on expanding our business going forward.

Mohit Sarana, Analyst — Munat Network Capital

Understood, sir. So next question is with respect to our order book. So we have a strong inquiry pipeline. Can you give a sense of what has been the historical conversion rate for these inquiry pipelines and what kind of conversion rates are expecting going forward?

Reginwando D'Souza, CEO

So, our historical conversion, Mohit, has always been 15 to 20 percent of the total inquiry pipeline, and that has been our intent, too, because we can have a higher conversion by compromising our margin. So, that has never been our intent. We want a larger funnel, and we can choose from them. So, obviously, our intent was 15 to 20%, but with the strategic intent now of moving into more and more complex and critical product, the conversion would be a little better. Based on our numbers, our conversion should be about 25% going forward. Up by about 5% from the historical.

Mohit Sarana, Analyst — Munat Network Capital

Understood. So the last quarter, you also mentioned that we are moving up the value curve and picking up slightly higher value projects. And there was also some comments on the competition. Can you give us some outlook this time? How is the competition shaping up for you? And how are we gearing? Are we making ourselves ready for that?

Reginwando D'Souza, CEO

So broadly, our strategy has been, you know, you're right to move into the niche segment, which is nothing but more and more proprietary and licensed products. This gets us into directly the Tier 1 competition, and if I have to name in India, the Tier 1 competition would be LNG, Godrej, Ishek, and this would be the three competitors which I can name, along with Anup Engineering now being part of that league.

Mohit Sarana, Analyst — Munat Network Capital

Got it. In our effort to, you know, increase the order book and also take up orders for the licensed products, those licensed products orders comes with lower margins or how should we look at it? Because I think I'm sure we must be paying some royalty to our licensing fee for those kind of products, right?

Reginwando D'Souza, CEO

Yeah, we do pay royalty, but having said that, that royalty is applicable to all the competitors. So, it's a level playing field and it's built up into a cost when we estimate. So, it is not negated from our margins. It is a built up of a cost and equal playing field with all the competitors.

Mohit Sarana, Analyst — Munat Network Capital

Right. So, even in these kind of products, we can expect some very close to 20% kind of EBITDA margins.

Reginwando D'Souza, CEO

So, I would reframe by putting a number of Mohit directly on 20%. See, as I explained earlier, what does these products do is that they give you larger value for equipment, right? And since this being critical, generally the material component in this will be fairly higher than your normal carbon steel. Whereas your value art would always remain the same. What this kind of product does is two things. One is with the same sonnet, it helps you to build a higher revenue and a higher absolute EBITDA, right? So EBITDA growth is much higher from the same capacities you have in place. And also, it lowers down the competition with three or four in the world, where your chances of winability are much better. And we, as a new entrants in this league into this product, would always be very competitive as compared to the well-settled established players. So percentage, EBITDA percentage per se would be lower. But it will help you to get higher absolute EBITDA for a particular turnage of conversion, which I think I have explained even in the past. I hope I have clarified that.

Mohit Sarana, Analyst — Munat Network Capital

Yes, sir, that is clear. So, one last question from my side, just for clarity's sake. You know, most of the concerns that we faced in the past, and not just you, many other tap goods companies have faced, this time the gross margin erosion has been there because of the increase in raw material costs, increase in shipping costs. Mostly related to the increase in oil prices and the geopolitical concerns. So for us, the H1 was not great, but what has changed or what new strategy are we adopting in order to, you know, improve our performance in H2? You may have answered this question, but some more clarity on this will be, I will really appreciate that.

Reginwando D'Souza, CEO

Oddly, Mohit, what I would say is that the projects or the PO orders that we took in the later part of the year, that is Q4 of last year and Q1 of this year, which is lending up into the execution for Q3 and Q4, were at a much improved margin profile because we could actually estimate the latest cost, which is, of course, an elevated raw material cost, and we could build into our estimation model. So the margins are much improved margins because we could actually estimate the cost. Whereas in H1 of last year, that is Q1 and Q2, two things happened. One was, of course, you know, there were trade tariffs which lowered down the complete order intake. And since we had to take orders to keep our capacities going, we had to take a conscious call to take approximately about 250 to 300 crore kind of an order booking. Much, much aggressive margin. So it was a conscious call because of the scarcity of orders in the market at that point in time, which lended up into the execution in H1 now. And what is lending up?

Puneet Lanphai, Chairman

The order scarcity and starvation in the first half of last year is a bigger contributor to the challenging performance. Then the raw material and geopolitical impacts. Both have compounded, but that is the bigger component, and that scarcity is no longer there, which is what is giving us confidence. Plus, The raw materials hit us because we were midway through our procurements when all the escalations happened. Now, the world is readjusting to the new raw material environment. So, while, you know, going back to historic EBITDA margins is still challenging, we are getting very close to that in the new order intake.

Mohit Sarana, Analyst — Munat Network Capital

Understood, sir. I think this was very helpful. Thank you so much.

Reginwando D'Souza, CEO

And to add to that, Mahesh, like what we are now quoting for the inquiries, we are already building in the actual cost, which is a much elevated raw material cost as of today. So that covers up more certainty in terms of the margin.

Mohit Sarana, Analyst — Munat Network Capital

Understood, sir. Thank you so much. That's all from my side. I'm wishing you the best.

Reginwando D'Souza, CEO

Thank you, Mahesh.

Operator

Thank you. The next question is from Dalarino Samir Dhakur from Ambed Private Council. Please go ahead.

Samir Dhakur, Analyst — Ambed Private Council

Hi, thanks. I joined the call a bit later. It could be a bit, but I just wanted to know, just thinking about three, four years down the line, in terms of capabilities, where do you select new product launches or where do you want to get into new industries, new geographies? So what is the plan? Long-term plan. I know you're getting into technical services trend, that is doing well, but apart from that, any new rut launches, new geographies, and diversification you are thinking of, that would be helpful.

Reginwando D'Souza, CEO

Yeah, so looking at three to four years, Samir, of course, our strategy is very clear that for the conventional legacy old product, we will move up the ladder in terms of value chain, that is building more and more proprietary and critical equipment. That's one. Second, of course, as you rightly said, the Anup Technical Service is something which we want to grow because this is a very profitable margin as for us. So we wish to take that bucket to about 200 crores in the next three years. The third bucket would be diversifying into precision components in a sense of making more and more machined items. We have right now on the shop floor, for the cause of confidentiality, I can't disclose the customer name, but we have right now one execution on the shop floor, which is on the turbine machining components. So that's another vertical that we wish to move forward. And the fourth one would be our skids and modules. As you know, we've mentioned that we want to get into the package. Currently, we are doing only the components or the products. We wish to get into making the entire package. Of course, we are doing two skids at this point in time, but we would like to make it at a mass scale, maybe three years to four years down the line and make more modules than equipments. That would be the plan for organic growth.

Samir Dhakur, Analyst — Ambed Private Council

Okay, thank you. So, any inorganic plan also you have? Any acquisitions you are trying to have to diversify into different geographies, etc?

Reginwando D'Souza, CEO

Yeah, we do. We wish to get into manufacturing in the other zones. Maybe Middle East is one that we are looking at. Not that something has been firmed up as of now, but we surely are exploring. And also capability acquisitions in terms of technology. That's something that we are working on. And maybe something that transpires, we will surely come back and provide the information. But this is something that we are looking at going forward in terms of acquisition. So as I mentioned earlier, Anup, now next two to three years, the agenda would be the acquisitions would happen only for capability built up and not more so from capacity perspective.

Samir Dhakur, Analyst — Ambed Private Council

Okay, thank you. Any size you have meant that that would be bullet-on acquisitions or any bigger acquisitions you are planning?

Reginwando D'Souza, CEO

Yeah, so we would like to have something close to our core rather than moving out completely away from the core. And also from the newest technology, like for example, if there's something which is coming up in AI data center cooling system, which is very close to our heat exchangers, we would definitely like to move forward with that. So we are exploring currently on the acquisition side for technology. So I believe I would say that we are in the exploration mode for inorganic at this point in time.

Samir Dhakur, Analyst — Ambed Private Council

Okay, thank you. Just, I'm not sure whether it's a repeat, but I mean, the guidance for this year, I think we had mentioned 5 to 10% growth and around 15% EBITDA margin. So, that is intact or just wanted to check on that.

Reginwando D'Souza, CEO

Yes, so the guidance that we have provided is a top-line revenue of 840 to 860 crores with an EBITDA of 120 to 128, which is roughly about 14 to 15 percent range. This is based on the products and the POs on hand. So as long as we are able to execute, the numbers are intact.

Samir Dhakur, Analyst — Ambed Private Council

Okay. Thank you. Thanks. That was all. I'll get back in to you.

Operator

Thank you.

Operator

Thank you. The next question is down the line of Raveen. An individual investor, please go ahead.

Raveen, Analyst — Individual Investor

Hello, am I audible?

Operator

Yes, please go ahead.

Raveen, Analyst — Individual Investor

Hello, sir. Thank you for the opportunity. So, I just have a couple questions. One is you mentioned that the current capacity that we have can cater to 1,200 stores. So, does that include the technical services part also or that is in addition to this?

Reginwando D'Souza, CEO

So, the technical services as of now utilizes the resources from our existing capacity. So, as of now, it is part of the 1200.

Raveen, Analyst — Individual Investor

Okay. Okay. Thank you. And so, thanks for the detailed explanation on the raw material cost and how it impacted. So, I just wanted to understand from a medium term perspective also, I know the geopolitics situation is still not completely resolved and we may again get into such a raw material. Right hike in the future also. So, is there a plan that we can mitigate this so that we don't get into a situation like what we had in Q1, where there is an increased raw material cost all of a sudden, and we are in the middle of a procurement cycle with right hike?

Reginwando D'Souza, CEO

So just to clarify, the major profitability impact in quarter one was because of the shortfall in revenue, and as I explained earlier, because of the lower absorption of the fixed cost. Nevertheless, there was an impact of raw material. If you see, the raw material was elevated at about 6%. Going forward, of course, what we do is the current order book that we take in, we build in the current elevated raw material prices in our estimation. And what we understand today based on the current situation, this probably is a situation which is the worst. It can't get too worse than this. It may only improve going forward. So this is the way we look at it currently. And in terms of mitigating this going forward, what we are trying to do is keep the supply chain as close to us as possible, even if it means that we pay a little more and get the supply chain in India, we are trying to do that. So that's the card that we are playing at this point in time. But of course, for some items... Where the sourcing in India is not possible, we have no choice but to get it from the other parts of the world, maybe in China and Europe. But we are keeping a very close watch on how the commodities move.

Puneet Lanphai, Chairman

The Reggie and team have been sort of jetting around the world to develop new vendors, so a lot of focus on vendor development, a lot of focus on qualifying newer companies to service our needs, and a lot more agile organization to ensure that ordering, et cetera, happens as efficiently as possible. But even if you do everything well, if there are these force-measure type of movements, then I don't think any business can fully insulate against all of these things. But whatever effort is needed to try and de-risk ourselves, I am quite satisfied that the team is putting it in.

Raveen, Analyst — Individual Investor

Thank you, sir. Thank you for the effort. I just had one follow-up, just in case there is a bit in the raw material place, does that impact us positively?

Reginwando D'Souza, CEO

So, if there is deep and raw material from where it is today, and if we are building that in our product order book position today, it will surely help us.

Puneet Lanphai, Chairman

But what we try and do is we try and close the raw material as soon as possible. So, if we have closed the raw material, then the prices get locked in, and then only the phrase movement, etc., can actually affect it. When you have, only when you have very fast increase or very fast decrease, is there scope of that, you know, within the two, three weeks it takes to do the ordering. In that window, you know, if there are big movements, only then they can either hurt or help you. Unfortunately, that happened, you know, when the war broke out. It's a very rare thing, actually. So, it's not something that, as business as usual, it impacts you.

Operator

Okay, thank you. Thanks and appreciate your greetings to the team.

Operator

Thank you. Ladies and gentlemen, as that was the last question for the day, I will now have the confidence over to Mr. Eduardo de Souza for closing comments. Over to you, sir.

Reginwando D'Souza, CEO

Yes, so thank you all for your interest and very interesting questions. And I hope we were able to clarify. In case if you have any further queries, please feel free to contact us and we would be happy to respond. I take this opportunity to thank my team at Anup for being resilient in these difficult times. I am sure the effort would yield results soon. Thank you all to our stakeholders and well-wishers for your trust and support as always. I wish you all a very happy Diwali. Take care. Stay safe. Thank you.

Operator

Thank you. On the behalf of Anoop Engineering Limited that controls this council, thank you for joining us and you may not disconnect your lines. Thank you.