Stock to buy: Anup Engineering to benefit from buoyant capex cycle, says Anand Rathi; sees 19% upside

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Also Read: HUL share price drops over 2% after muted Q3 results; should you buy, sell or hold the stock? “We are of the opinion that the company is well-positioned to benefit from the robust capital expenditure cycle in the industries it operates, including petrochemicals, oil and gas, and green hydrogen initiatives. Also, the company is well positioned to take advantage of the export markets as well as diversification of its products," said Anand Rathi. The brokerage firm initiated a ‘Buy’ rating on the stock with a target price of ₹3,568 per share for a time horizon of 12 months.

Anup Engineering has a robust order book of ₹872.7 crore, with a record quarterly influx of ₹243 crore in October 2023. Geographically, 41% are from domestic markets, 48% from exports, and the rest from DE/SEZ. (Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) The company’s management aims to complete all current orders by FY25 end (17-18 months) and holds an inquiry bank of around ₹1,000 crore, with inquiries from both domestic and international markets, including the USA, Canada, and Louisiana.

By the end of FY24, it is anticipated that exports will make up 30% of the revenue, with a further increase to 40% in subsequent periods. Export orders are expected to contribute higher margins compared to domestic orders, Anand Rathi noted. Moreover, the company is also trying to diversify its portfolio by reducing its dependency on heat exchangers, which are its biggest revenue contributor at around 76% of revenue.