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Anup Engineering Ltd
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Ladies and gentlemen, good day, and welcome to the Q1 FY '23 Earnings Conference Call of the Anup Engineering Limited. [Operator Instructions] Please note that this conference is being recorded.
Before we proceed to the call, let me remind you that the discussion may contain certain forward-looking statements that may involve known or unknown risks, uncertainties and other factors. It must be viewed in conjunction with our business risks that could cause actual results, performance or achievements to differ significantly from what has been expressed or implied in such forward-looking statements. Please note that the company has uploaded the results press release, investor presentation and also the outcome of the Board meeting on the website of Stock Exchange and website of the company.
I now hand the conference over to Mr. Rishi Roop Kapoor. Thank you, and over to you, sir.
Thank you. Am I audible? Thank you, and good afternoon to everyone who has joined this call. Before I begin, let me share with you that I have here with me our CFO, Mr. Bhavesh Shah; and Company Secretary, Mr. Chintan Patel. We are officially joining today for our con call for Q1 FY '23.
Let me begin by taking you through our numbers. For Q1 FY '23, the revenues at the same level at INR 52 crores, we have a very strong order book and WIP which provides good revenue visibility in the coming periods. EBITDA is at INR 9.4 crores, that is 18.2%. This is primarily because of the impact of high material prices.
We have an all-time high opening order book of approximately INR 537 crores. Also, we have booked orders worth almost INR 70 crore since 1st of July. To date, current year order booking till date is about INR 263 crores, including the highest ever order of INR 103 crores from a public sector refinery.
I'm happy to share with you that we are in advanced stages of discussions for a technological tie-up for more complex and advanced designs equipment. And we will be sharing the details with you once the collaboration, the agreements have been inked.
On the CapEx front, we were able to make significant progress by achieving some important milestones, including the new [ L1B ] with a lifting capacity of 150 metric tonnes along with the clean room facility, which should allow us to tap the exotic materials segment and upgradation of existing deals. We were also able to speed up the progress of construction in our new facility at Kheda. This will be as a cornerstone for the future growth.
Thank you, and I shall be happy to answer any questions that you may have.
[Operator Instructions] We take the first question from the line of [indiscernible] Shah.
Gentlemen, so I have the question that did we face any execution challenges during Q1? Because from what I understand is that during the Q4 call, we had an order book of, I think, INR 393 odd crores, and the management had guided a revenue of more than INR 400 crores for FY '23. Now that the Q1 is out of the picture and we just had more or less similar levels when compared to last year did we face any challenges in the execution side? That's question number one. The question two is does the management retain the guidance for INR 400 crores of top line for FY '23, now that the order book is just increasing? And my third and the last question is that we have seen an 18% margin for Q1. And now we have seen the commodity prices softening going forward. So can we expect the margin to go back in the range of 20% to 24% or so?
As far as the low revenue in Q1 is concerned, I think this is mainly a result of the selected revenue mix that we have with most of the deliveries which are reflated to happen in the subsequent quarters. That means that moving now onwards or quarter 3 onwards, quarter 2 onwards, will be the -- most of the deliveries of our -- for our revenue mix that we have selected for the year. Yes, we are trying to pull them forward as much as we can, but this is how it is. So there are no -- to answer your question, there are more operational challenges.
In fact, on the contrary, if you look at the closing WIP, it's an all-time high of about INR 85 crores. This is the level of WIP that we have opening for the quarter 2.
As far as the turnover, I think the revenue guidance that we have shared in the previous con call for the year, there is no change in that. Like I said, I think the revenue mix has been selected based on the deliverability and all factors have been considered. So we retain guidance of about INR 380 crores to INR 400 crores for FY '23.
As far as the margins are concerned, yes, it is an impact of the escalations in the material prices. And that, impact will continue to be there with us. However, we are confident that we will be closing the year with about a 4% or 5% hit on the EBITDA margin at about 20%.
We take the next question from the line of Saket Kapoor from Kapoor & Corporation.
[Foreign Language]. Sir, as during the -- yesterday AGM also and earlier also in your quarter 4 con call, you still guided for this INR 380 crore to INR 400 crore [ band ] and now the first quarter being a very soft quarter. So the run rate is definitely going to improve significantly if we are even nearing any way between INR 380 crores to INR 400 crores. Easily INR 100 crores plus run rate is envisaged just to reach this mark even on the lower side at INR 380 crores. So that understanding is correct that this is the bottom in terms of the execution cycle and now it is only the upward graph that we are expecting from September quarter from this quarter itself.
Yes, that is correct.
And in terms of margin profile, sir, for the year as a whole, we will be trending at 20% margin. What was our margin for the last year, FY '22?
I think for FY '22, it was about 24.5%. And we are looking at closing FY '23, we are expecting to close it around 20% mark, taking ahead of about 4% to 5% on EBITDA.
And Q1 was 19%.
Q1 was like 18%.
18%, correct sir. And you did mention that this is the -- the deliverable cycles from the client end are mapped in such a way that the delivery of -- the scheduled deliveries are post June. So that is the reason there is a buildup in inventory and the working capital progress has gone up INR 280 crores.
That is true. That is correct. Just to give everybody a sense of the whole comparison, in the previous year, if you look at the closing WIP for Q1, it was somewhere in the region of about INR 44 crores. And in the current year, it is about INR 85 crores. So that gives you an idea.
Sir, in your presentation, you have mentioned that for better synergy, fungibility and optimally utilize the capacity at Odhav and Kheda, you will be operating Kheda as a plant to the existing company rather than the subsidiary. If you could explain sir what are we trying to convey on here, sir.
Yes. So initially, we have decided to operate the Kheda facility as a 100% subsidiary to take the advantage of Section 115 BAB, which is at our subsidized taxation of 15%. But since there were certain clauses in that section, which restricted the fungibility between both the unit, so there were a lot of transfer pricing issue if we had to ship the material from our current premises to Kheda premises. So it was being decided to optimally utilize both the facilities. We will be operating Kheda as a plant rather than the subsidiary.
Okay. So the taxation would be at 25%.
Yes, 22% and plus surcharge, 25%, yes. Overall taxation will remain at 25%.
And sir, if you could throw some more light, I think our presentation is one of the best for an engineering organization. Majority of the questions are very well answered in your in the breakup of the presentation. So I'm very thankful to the team for preparing a very conclusive and exhaustive presentation. Sir, if you could explain to us the benefits that the company will derive in terms of revenue and the probability when the Kheda site comes on stream. And also, Roop sir, you mentioned in the last quarter 4 on call that you would be in a better portion to give outline how the business will move ahead of FY '23. So now with this order book and the business environment. So could you please give us some more color how are we looking ahead for FY '23 and beyond, if you have some color on the these 2 points.
So I think the -- there are main 3 drivers for our growth that we had decided when we started on this journey. And the first one, of course, was the CapEx and building of the Kheda plant which would give us a much needed capacity augmentation along with some exceptional capabilities which could be counted as one of its kind and the most state of the art, highly advanced kind of facilities for these kind of engineered equipment. So Kheda plant, once it comes on stream it is going to be done in 3 phases. The first phase is we are likely to complete in this in the current financial year. Sometimes in the beginning of -- sometimes in the -- in the beginning of Q4 is where we are likely to have this plant closer to completion and commissioning.
This is going to add about 100, 150 crores to the revenue, and we are talking about going ahead the next 2 phases once they are all completed. We will have almost INR 500 crores coming from Kheda in terms of the revenue contribution. It would be about INR 500 crores. And beyond the Phase 3, it will definitely when we look at INR 500 crores, it is not even full utilization. There is a good 5-year runway beyond that, which will allow us to enter new segments, new industry sectors and take the growth further beyond INR 1,000 crores overall. So I think that's where we are talking about the first pillar for this growth.
The second is, of course, we are reaching out to our customers. We are building references, getting the approvals, getting the technological tie-ups to get into more and more advanced designs of equipment, especially heat exchangers and other proprietary items. And I would be happy to share with you that from the current order book, almost about 60% would be contributed by these special design heat exchangers, which is in a way also responsible for us to be able to hold on to the margins. Yes, we are seeing a hit but still, if you were to compare with some of the other businesses which are impacted in this, I think it is a much better ground that we are holding on.
Sir, when we look at the breakup of the order book between domestic and exports, it is only 10% that we have garnered from the export segment. So any reason, sir, or is it the tough competition or the vulnerabilities that are involved in exports that we have only booked 10% of the total order booking? And also the addressable market, sir, I think the heat exchangers as per the order book review, we find it at the out of it the total order booking of INR 538 crores, INR 424 crores is toward heat exchangers. What is the total addressable market in the country? And also on a global basis, if you could give us some more color.
So I think the more proportion of heat exchangers is simply it's a reflection of the fact that we are currently -- the entire revenue is being contributed by Odhav. Where we -- going forward, we are going to focus on heat exchangers, shell and tube heat exchangers and exotic equipment. So that's the product mix that we foresee for the Odhav plant. For non-heat exchangers, the process equipment, which are falling in the non-heat exchanger category, that is the columns, reactors and pressure vessels, I think that is where we have envisaged Kheda to come in and allow that kind of a bandwidth to deliver the best of equipment and the most critical, most complex of those equipment in these categories. So that would be -- that would perhaps explain. As far as that, the proportion of export is concerned, we generally -- it's earlier reflection of the available opportunities. At this moment, India is a big market, which is happening. There is a global competition, which is being faced by a CRL India for Indian projects.
So it's a lot of action happening here with so much of investment happening in the refining sector, petrochemicals and chemicals. So it's clearly a reflection of that. Having said this, we have our sights set firmly on the international market. And whatever growth we are doing here in India, it is all with the free supplier with every dispatch that is happening. We're -- we are taking the -- our credentials a notch higher -- this is what has been the -- I mean, we have done consistently over the past 4 or 5 years, and we continue to do that. And this will hold us in very good position as far as the global market is concerned.
We are strengthening and augmenting our reach to go out to the customers and present to them and showcase to them our capabilities -- and we intend to do it in certain forums, including global multinational exhibitions as well as one-on-one meetings with the customers to focus to them to present in the market capabilities. And we have a very good track record, which will help us to win these customers to shop and get more export orders.
Sir, going ahead, how should this mix be looking later. Currently, it is totally domestic only, 10% here or there is not making a big difference. But going ahead, as you are seeking of the inroads to the export segment, if I'm -- correct me here, sir, in quarter 4, you also mentioned that there are people who would be garnering to our products, and they -- because of some constraint and won't be able to develop these products at their end? And also, I think the logistics part plays a bigger role here. So are these sectors are the ones that will give us -- that will give export growth opportunity? And going ahead how the percentage would likely to look like.
Sorry to interrupt. The participants are requested to restrict their questions to 2 per participants.
Ma'am, I have just completed my question.
I can take this question. Going forward, I think the proportion of export is going to normalize and perhaps it will be evenly divided. The revenue is going to be evenly divided between India and -- between the domestic and export sales. The prime reason is that we currently, I think Indian market is -- many opportunities are there, and I don't see that changing over the next 5 years. At the same time, we will be making, taking big strides in the international market. So putting these 2 together and considering the fact that we will be making more international customers as compared to what we have today, the international customers portfolio is going to grow. -- it will eventually settle somewhere about 50% exports and 50% domestic in 3 to 4 years time.
We take the next question from the line of Chetan Vora from Abakkus Asset Manager.
Yes. I wanted to understand the order book which we have right now of INR 540-odd crores. Maybe execute over what period of time? And why still we maintain the margins will be in the range of 20%. Because these orders have been booked since January and since January, the commodity prices had already gone up, and now we are seeing a downward trend. So why still we are maintaining a muted outlook on the margin front?
Chetan, I think this -- out of this order mix that we have today, if I consider INR 537 crores plus another INR 70 crores. Maybe that would be somewhere about close to INR 600 crores. I would think that, how much, around INR 270 -- I think INR 270 crores is what we will have for the next year. So that is going to be delivered in the next year. So that is an order book for FY '24.
Now talking about the new orders, I would think that whatever orders we have booked post, you can say, I mean, the last INR 100 crores, INR 150 crores orders that we have booked, these are all booked with the historical margins. And we have those now -- I mean we will be -- these are going to be traditionally where we were operating at about 25% EBITDA. These are those kind of orders.
So out of the INR 600 crores, what do you say, what would be the order book which has been booked at a historical margin level, sir?
I think maybe about INR 350 crores?
Yes, yes, so apart from the Q4 order book, mostly order book, so maybe about -- I would think that some in the region INR 350 crores. What we yes, INR 320 crores and INR 320 to INR 330 crores would be at historical margins.
Which is 25%, right?
So INR 320 crores out of let's say INR 600 crores.
Okay. I was going to the quarterly numbers. The gross margins Y-o-Y, have declined by close to 180 bps, but there is a dip in the margin by close to 400 bps. And on the Q2 level, there is an uptick on the margin front on the gross margin front. But still, we have seen a sharp down on the EBITDA margin -- so could you explain the divergence because of that?
Yes, Chetan, the other expenses which have gone up is to our execution are much higher than our revenue. If you see our WIP is up by, I mean, close to around INR 20 crores in the current quarter. So our execution has been much higher. So that's the other expenses have been at [indiscernible] at the WIP state. So our execution was much higher than our sales in Q1. So it should normalize, all that impact is because of raw material only in the current quarter.
So technically, so the margin should be improving sequentially, right? 18% is the bottom end though you are guiding on 20%, but still the margin should improve on Q-on-Q level, right?
See, as we move along, it will depend on because several of these orders that we have received recently are -- which we received maybe about 2 months back. They are still in the initial ordering stages, maybe the major raw materials would have been ordered, but still there is some of the peripherals that have to be ordered. So we'll come to know as we move on. But looking at the current analysis that we have done on the revenue mix, I think this is most likely we will close somewhere about 20%. There are going to be some orders which are there even in this year also where they have been booked at traditional profits. However, there were some orders where the impact was even higher than what we had envisaged. So more or less, it is coming down to somewhere about 20% is what we can tell you right now.
And sir, last question, the balance order book out of the INR 600 crores of which we used -- INR 320 crores has been booked at a historical margin, the balance of nearly about INR 280-odd crores will be -- would have been looked at what margin?
Gross margins.
Yes, so that would be the material cost of the orders which got impacted was to the tune of close to 56%. So yes, the gross margin at around 44%.
We take the next question from the line of Kunal from Chameleon Asset Management.
One was basically we received a very big order of INR 100-odd crores on account of 1 refinery -- so if you could explain the traction as to how the bid pipeline is going forward? And how should we see our order book ramp up from year on? Because if I understand correctly, from the current unit, we have the execution capability of doing about INR 450 crores, INR 500-odd crores, and then there is additional Kheda. So 2 part to this question is, I mean, how should we -- how will we order pipeline? That's the first part of the question. And secondly, the execution from the current facility.
Yes, the order book, I think order flows are continuing and we are expecting a similar run rate that we have experienced in the past maybe 3 to 4 months. So, we have a lot stronger [indiscernible] as far as the inquiries and the probable orders are there. And the second part of your question, please repeat...
Any sizeable orders, sir, to the tune of INR 100-odd crores, I think was quite sizable order considering the size of orders, the type of heat exchangers to the tune of about INR 3 crores, INR 4-odd crores per unit that we do. So anything specific out in this particular order? Is it a one-off kind of an order, or how should one look at that?
I think it's just it's a milestone of INR 100 crores. I mean that's in a way a first for us. But I mean, apart from this for us, it's not -- I mean, something very new because we had been knocking up orders in access of, let's say, between 50% to 70%. We have had several orders over the past, let's say, 5 years in this category, in this range. So as such, it was just INR 100 crores plus kind of a number, which was there in a single order. So that was the specialty here. And apart from the fact that it was another category of advanced heat exchangers. So that's where it was.
And do we see any sizable orders pipeline and the bid pipeline as well going ahead in the current year, possibility of getting converted into order?
I think this is going to happen because we are now amongst the leading 4 competitors in India for this work. And we will be in a country more of these launch of new orders.
Okay. And sir, on the execution part from this facility, how should one look at that?
This facility is -- I think it is typical of delivering anywhere about INR 500 crores to INR 550 crores going forward because we have completed the CapEx yield in a -- with the commission with the clean room, it is done now. So this is capable of delivering up to INR 500 -- INR 550 crores. And we are, like I said, I mean we are looking to set to grow at a CAGR of 25% hereon.
And sir, how much money we have spent in the current year for the Kheda facility so far? And how much we plan to spend for the Kheda facility considering that it will have a revenue potential of INR 100 crores to INR 150 crores in the first phase?
Yes, the total CapEx is INR 115 crores and INR 30-odd crores have been spent already in last year and current year we've spent around INR 25-odd crores, so INR 60 crores more to go in next 6 to 9 months.
And just one question on, sir, correct me if I'm wrong, sir. right, we see the competitive intensity kind of increasing in the space, right? So -- does that kind of also putting a pressure on the margins because if I could understand correctly, out of INR 600 crore order book, right? You mentioned that INR 330-odd crores order book, right, or probably INR 270-odd crore order book, which is to be executed in the next year would have margins of like 25-odd percent, right? But still the remaining if I see the movement of the order book from January to March, there's still like a good INR 150-odd crores post to which the prices have kind of cooled out -- so still, we are guiding only for 20% kind of margins wherein historically, we have been at 20% to 25-odd percent kind of margins. So somewhere to read through, is it because of competitive intensity as well.
Not at all. I think it's purely a reflection of the market -- the conditions where the prices shot up and you can't read the steel that we buy as a commodity is not categorized as a commodity steel. It's a specialty steel -- there's some very stringent requirements are there, and we have very few suppliers worldwide. So there, the impact was even higher. So it's purely a function of price escalation that happened. A lot of the materials a lot of the orders that we got were nickel bearing. And as you know, nickel has been extremely volatile, especially in the phase between February to May. It has been extremely volatile.
But historically, we have mentioned that as soon as we received the order, we have got back-to-back arrangements for booking on the raw material as well, right? So in that sense, our gross margins still should be protected in that sense, right?
Not at all these were exceptional situations, we had taken the orders, the customers because our prices were valid, our bids were valid, but our suppliers, they are not according similar kind of, you can say, a facility or a similar kind of a courtesy, they were -- they always -- if there is an exceptional circumstances like this, they can go back on their prices on their offers. We also had a choice, but we chose not to do that because we are in this for the long run, and these clients are our customers, and we didn't want the opportunity for taking the projects participating in the projects or delaying the projects in any case. So we went ahead and took the orders.
Just one last question from my side, sir. We mentioned that we would get done with the Kheda project by latest early Q4. So I mean the order booking for the same would, I believe, start only in FY '24. Would that be a fair understanding and our execution post that, there will be some lag for audit of those facilities and all of that as well, or how would we -- when should one start order book execution on account of Kheda facility building in our order book?
It was going to be a set of orders which we can start execution in Kheda once it is commissioned, once it is ready to be taken in for production. However, a lot of our customers, in fact, the majority of customers would like to visit the site. They would like to audit the facilities and whether it's -- they're at par with the existing facilities or not or better. So there are formalities that have to be completed. I guess that according to our estimates, if we commission the Kheda plant by the turn of the financial year by 31st of March, we should be ready for taking orders from there in the middle of the next year. Maybe somewhere in the quarter 2, we will have the orders specifically for Kheda.
So order book acquisition on account of Kheda would only happen from Q2 FY '24?
Yes.
And from the current facility, we have room for another INR 100 crores kind of execution if we close the year at INR 380 crores, INR 400 odd crore execution right?
And if you could listened to what Bhavesh had to say earlier that we are now developing this plant, it is like a -- it's an extension of our facilities. So that allows us to have some kind of a complementary existence between these 2 corporation, between these 2 facilities.
That will use a little bit more room for execution on the higher side.
Absolutely. It will definitely add to our capacity.
We take the next question from the line of Raghav Sony, an individual investor.
Sir, my question is on EBITDA margins. So going forward, since we have clocked the significant part of our order book, at historical level of EBITDA margin. So wouldn't it be higher than 20%, what you have guided. So this is my first question, sir.
No, it is not going to be -- it is going to be higher than 20% in the next financial year, that is FY '24. So most of these orders will flow over to the next year.
And sir, secondly, on the run rate from Kheda facility, so going forward, what type of run rate we can expect from Kheda facility? Because you have been mentioning that revenue CAGR, I'll repeat my question. Sir, my question is regarding the revenue run rate. So you have been guiding that revenue run rate would be close to 25% CAGR. So in the same line, I was just asking about the revenue run rate from Kheda facility, which is supposed to commission from H2 of the current financial year.
Yes, it will commission by the end of the financial year, yes. It will also see a similar kind of a growth rate. Both put together is what we are looking at a CAGR of 25% from here on. Both facilities put together.
We take the next question from the line of Ajit from Nisa Securities.
A few of my questions have already been answered. Just I wanted 2 clarifications. Sir, what is our current capacity utilization? And the second one is, sir, you told that we are among the top 4 leading competitors in India. So just wanted to understand who are our competitors in heat exchangers and pressure vessels, which are our major products. That's it.
Yes, capacity utilization would be to the tune of about 80%. And our major competitors could be heavy engineering division of Larsen & Toubro.
And is this capacity utilization similar to the previous year or -- is 80% standard or what, sir?
It has been on the -- I think it's similar to last year. Last year, we had 1 less day because the 1 day was not commissioned. So this year, we also have that day contributing.
We take the next question from the line of Yu Mehta from Scan Capital.
Congratulations on the record order book and the commissioning of the clean room. Sir, I just wanted to understand, given that you said that the export revenue would be contributing half, and the revenue potential from the Kheda site sir, would we be seeing a pull forward of the INR 1,000 crore guidance for FY '27?
Not really. I don't see that we'll be able to pull it forward, but I think we will be were on track.
All right, sir. And sir, just 1 more question. Sir, we had said that you are trying to get into fermenters and bioreactors and other capital goods in previous con call, sir. Any update on that front?
I can only say that the work is in progress. And I mean that's something which is very high on our agenda, and it's, in fact, increasing the customer portfolio. And also the product portfolio. So it's something which has been -- which have been resonated as key drivers of growth for us. So which is very high on my agenda and it's a work in progress.
Sir, 1 more question, sir. Actually, 2 more questions, sir. Just a little small question, sir. Sir, given that we are manufacturing heat exchangers and columns, reactors and pressure vessels, sir, -- we haven't seen a Nuclear Power Corporation of India Limited NPCIL. As one of our clients, sir, we haven't mentioned them. And I think we should be having orders from them, sir, given they require the equipment be produce, sir. Any update like any comments on that? And sir, 1 more question. Do we have -- do we track the turnaround time for any of the orders like the execution time for any of our orders for the machinery?
To answer your first question, NPCIL has seen one of our clients. And going forward, I think nuclear equipment is going to be one of the business segments that we will have, and Kheda is going to play a key roll over there, okay, so that is one. And the second question, if you could please repeat?
Sir, I was just asking like the orders we received from clients, do we track the turnaround time, the execution time to deliver to them? And has there been any progress on that front?
I can only say that we have the best track record when it comes to on-time deliveries. And we maintained our leadership sales position for the last 6 or 7 years consistently, and we retain that position. We are delivering upwards of 90% on time or before time.
Just 1 update, if you could add NPCIL in our client list because it isn't there in presentations or anywhere else, so that was a doubt. And sir, thank you for taking my questions.
We take the next question from the line of Ankit from Subhkam Ventures.
A couple of questions. Sir, with strong traction in order inflows, I mean you have already booked some INR 265 crores till July in 4 months, and you mentioned that this momentum will continue. So is it fair to assume that for the full year, your order inflows will actually cross around INR 700 crores mark?
I think it's too early to say. I can just tell you that we can definitely have something upwards to INR 500 crores for the next year order book, opening order book.
Opening order book of at least INR 500 crores is what you mentioned.
Yes, yes, yes.
And sir, second is, now with Kheda coming, where more complex and high-turn range of products would be manufactured. Wouldn't it have margins higher than your normal margins of 24%, 25% because the competition level would be less and those would be more complex products?
I think that is what we are heading towards. And that's the whole idea, as you see, we have made rapid progress in terms of the kind of equipment that we have been delivering. And every year, we have seen an improvement there. So of course, that is something which doesn't get reflected in the numbers that generally analysts analyze, but it is definitely something which has been very consciously being pursued by us, and we have been largely successful in that. And in the coming years and once Kheda is on stream, definitely it will be reflected in the bottom line as well.
Okay, and sir, last week, kindly give some more details on the technology type that you are seeking. I mean, how is it going to upgrade your existing skills, which area are you people have -- and looking for a tie-up and how can it scale up your addressable opportunity?
I think that is, again, we are working on all fronts on all product categories, whether it is any kind of process equipment, any custom built equipment or heat exchangers, the vessels, pressure vessels, reactors, columns. Everywhere, we are looking to scale at the kind of equipment that we are doing and one way to do it is of course, engaging with technology providers, something specialized. And we are being quite successful is what I can share with you at this stage. As we move forward, as we are when we get in a position to share with you more details, we will do that.
Okay. And just one small follow-up in this. The Kheda CapEx, what kind of asset turnover you are looking at in the Phase 1?
Although Phase 1 would be close to around 1.3x to 1.4x. But overall, it should be 2x.-- because in Phase 1 there will be a lot of [indiscernible] which has been developed [indiscernible] in initial phase it will be between 1.3x to 1.4x and going forward, overall, at the end of all the things of Kheda, it should be 2x.
Because to the best of what I could gather was that in Phase 1, it was 2x and on incremental CapEx, you people had mentioned it would be 3x. So has there been any change in that?
No, there has not been any change. I think we continue to have the similar run rate there.
3x on incremental CapEx at Kheda, asset turnover.
Yes, overall 2x setups.
2x, all right.
Due to time constraint, we take this as the last question. I would now like to hand the conference over to Mr. Rishi Roop Kapoor for closing commenting.
Well, thank you, thank you, everyone, for participating in the conference call. And I hope we were able to answer most of your questions. Thank you once again.
Thank you. On behalf of the Anup Engineering Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.