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Anup Engineering Ltd
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Ladies and gentlemen, good day, and welcome to the Q2 FY '25 Earnings Conference Call of 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 company have uploaded the results, press release, investor presentation and also the outcome of the Board meeting on the website of stock exchanges and website of the company.
I now hand the conference over to Mr. Reginaldo Dsouza, Managing Director of the company. Thank you, and over to you, sir. Mr. Dsouza, you may go ahead.
Am I audible?
Yes, sir, we can hear you. Please go ahead.
Yes. Hello, everyone. A warm greetings from team Anup. I sincerely thank you all for your presence on this call. I'm glad to share our quarter 2 and half year results for this financial year 2025 and also would like to briefly share on the business outlook.
On the stand-alone basis, revenue for quarter 2 was INR 187.9 crores, a 34% growth quarter-on-quarter with an EBITDA of INR 42.9 crores. That's 22.9%, a growth of 37% quarter-on-quarter. The PAT was at INR 32.3 crores at 17.2%, a growth of 48% quarter-on-quarter. Please note this is our best-ever quarter on revenue.
On the consol numbers, that is with Mabel Engineers, our 100% subsidiary, quarter 2 revenue stands at INR 193.1 crores, a growth of 38% quarter-on-quarter. EBITDA is at INR 43.3 crores that's 22.4%, a growth of 38% quarter-on-quarter. PAT is at INR 32.5 crores, that is 16.8%, a growth of almost 50%. So if one looks at the period ending September, the consol numbers for H1 is revenue at INR 339.1 crores, a growth of 28% year-on-year with an EBITDA of INR 76.3 crores, again a growth of 28% year-on-year. And the PAT stands at INR 56.6 crores, a growth of almost 40% year-on-year.
The working capital was healthy at 4.1x. The exports for the year also has been encouraging and is at 52% H1 with pure exports at 47%. The sectorial revenue for the quarter has also been interesting. We have oil and gas and petrochemicals at 61% share of revenue, hydrogen at 30% and fertilizers and others at 9%. This clearly shows that other sectors have started to contribute.
The product-wise revenue share is in line with our expectations with 72% coming from heat exchangers, 24% from vessels, reactors and columns and 4% from others. This clearly shows the contribution coming from our new Kheda facility. There have been some good developments during this period, and I would like to share a few.
First, our Kheda Phase 1 with two manufacturing base are now completely operational. This phase is equipped to deliver INR 200 crores revenue per annum. Second, we have signed a collaboration agreement with Graham Corporation, USA. This is a U.S.-based company and are providers of vacuum and heat transfer systems for refinery and petrochemical projects. With this, we are now the exclusive manufacturer for their global projects. In short, we have the first chance for refusing.
The third development is that we have made the decision on expanding our capacities further. We have started construction activities on Phase 2A where we will add one additional manufacturing base. We expect to commission and start manufacturing from third quarter in the next financial year, that is FY '26. This means we will have two quarters of execution from this added bay for the next financial year. With the addition of this bay, we will have three manufacturing base at Kheda plant, which can deliver revenue anywhere around INR 300 crores to INR 400 crores based on the product mix per annum.
Fourth interesting development has been the Mabel Engineers, our newly acquired unit in Tamil Nadu, I must say, is also doing well. We have bagged a good order for supply of silos to be delivered in this financial year. With this, Mabel should be able to deliver on planned revenue for this year. And the fifth development is our Vadodara design office, which is well stabilized now, and we plan to grow this further. This is helping us debottleneck our design activities as we grow.
A few moments on the future outlook. The pending order book period ending September stands at INR 882 crores, interestingly, with about 68% exports. And just for your information, as we speak, as on date, the pending order book position stands at INR 932 crores, which means that we have about INR 500 crores order book for next financial year, that is FY '26. This sets things very positive for us for the next year.
On the market, domestic sector, which was subdued over the last few quarters, seems will start with opportunities from third quarter end, we are seeing few already. Exports continue to provide opportunities. The inquiry pipeline continues to be around INR 900 crores to INR 1,000 crores. And at the same time, we are also seeing some aggressive market competition.
On the sustainability initiatives, with the 1 megawatt rooftop solar at our Ahmedabad plant and with a windmill, we operate, approximately 60% of our power requirement in Ahmedabad plant is through renewable sources. With the Kheda roof top expected to complete this quarter, we will have about 75% of our total power requirements through renewable sources.
So to conclude, we have had our best quarter performance and the momentum created will surely help our 30 growth -- 30% growth guidance for this financial year and with an EBITDA of around 22%. Our healthy pending order book with some interesting opportunities ahead gives us a more certain visibility into this year and also the coming year. I am confident that with a more certain business visibility into the year and at the strength of a strong capable team at Anup and with the continued support from our reliable partners and suppliers, we will be able to deliver on our plans. My sincere thanks to all our hard-working, committed team members, our partners, our suppliers and all our shareholders for standing by and trusting in us. We are grateful for your trust and support.
Thank you all for being on this call and for your patient listening. I'll be happy to have your questions. Thank you.
[Operator Instructions] First question is from the line of [ Vikram ], who is an Individual Investor.
First of all, congratulations on yet another fantastic quarter. Hello?
Thanks Vikram. Go ahead.
Okay. Sorry. Okay. So I think just a couple of questions. First one, as we look at FY '26 and '27, given that we said we would like to be close to INR 1,000 crores in FY '26. I think we've done a lot of fundamental work to get there. I just want to look a little ahead into '27 and '28 and see any kind of insights that you can provide at this stage? And secondly, around the Graham collaboration, just want to understand what it means for the company in terms of potential? And what are the next steps that we can expect on that?
Thanks, Vikram, for the question. So to answer your first question, so our guidance for the next 2 to 3 years remains the same that we wish to grow at 25% to 30% growth year-on-year in the next 2 to 3 years. How we are going to do it? As I explained even in the last call, twofold. One, of course, we will keep expanding our capacity. Timing is correct. Like what we did for Kheda now. You would have heard me on the call, last call, saying that we would take a call somewhere in November, December this year. But I think we've preponed it a little and taken a call to start building this capacity because we will need it for the next year.
So we have a further base plan for Kheda that is -- with this, we will be completing 3 bases. We would have another space for 4 more manufacturing base, which we will in time as we progress since each base takes roughly about 11 months for us to execute. At the same time, as I said, we are also looking at opportunities like Mabel on the cards. We are in discussions. And if something materializes, we will surely come back and announce those developments.
On the Graham, it's a collaboration. It's a U.S.-based company, where Anup becomes the exclusive manufacturer for their products. Graham is not new to us. They are our customer. They have been our customer. And even today on the shop floor, we are executing some jobs or some equipments for Graham Corporation. It's only that we are moving the relationship one level higher being the exclusive manufacturer. So we get the first chance for refusal and more certain volume of work in the year. So that's the arrangement. It's all about getting our capacities filled in a more certain way year-on-year. We will look for more such opportunities in the market.
And just to add, is there a sense of what Graham will mean for us in FY '26? Or is it too early?
Of course, it will be an estimate. So the estimate that we are looking at is anywhere between INR 30 crores to INR 40 crores kind of revenue that can be bought in FY '26. That's only for the Indian market we are looking at. This opens up the door even for their international market, which I'm sure we will get more visibility in the quarters ahead.
Got it. And in terms of Mabel, any numbers for '26?
For '26, as I said, we maintain Mabel will double the turnover to INR 100 crores in FY '26.
Next question is from Jaiveer Shekhawat from Ambit Capital.
Congratulations for a great execution this quarter. My first question, we have been seeing a lot of initiatives that you've been taking to diversify your revenue streams across industries, across the product line geographies as well. So looking three years out, I mean, how do you see, one, your end user contribution? And then also with respect to your products as well? I mean, if you can paint a picture to the investors about that.
Yes. Thanks, Jaiveer, for the question. So first, let me take on the product side. So we see the product portfolio at Anup being on an average, 60% to 40% kind of a ratio. That is heat exchangers taking about 60% kind of a shape and vessels, reactors and columns at 40%. Strategically, as I mentioned earlier too, our heat exchangers will be focused at our Ahmedabad facility and reactors, columns and other products would be focused at Kheda facility, given the sheer size of the plant and the location. That's on the product side that we look at.
On the customer segment, we see oil and gas and petrochemicals stabilizing at about 50% to 55% kind of a revenue share. And hydrogen, as we are already at 30% hydrogen and fertilizer will take up larger shares to close to about 40%. The regions that we look at the spread is largely into U.S. and Canada. Basically, we see the blue hydrogen opportunities out there. In Abu Dhabi, Saudi Aramco and that area, we see the gas projects. And on the Australia, Nigeria side, we are seeing some good traction on the fertilizer side. So this would be the broad breakup.
Sure. That's helpful. Second, just in terms of technology. I mean, are there discussions internally to sort of develop or do technological tie-ups for say even things like paint heat exchangers, which can possibly support even the generation aspect of green hydrogen, where possibly you're not present at the moment?
Yes. So as we grow, we -- the strategy is very clear that we are going to consolidate on our current existing product portfolio through building capacities and at the same time, diversify into futuristic products. So we are already in talks with some of the technology and design companies. As it materializes, we will surely come back and announce. But a direct answer, yes, we are looking for collaborations and support on the technology and design side with companies and established players in the world.
Sure. And in terms of the capacities, if you could also give light in terms of where your capacity stands currently across all the 3 locations and then what is the kind of capacity utilization you're running at? And then after the manufacturing bay at Kheda gets commissioned next year, I think where would those capacities go up?
So when we talk about capacities, if it's in metric tonnes. As I said earlier, our Ahmedabad facility is completely built up. That has got a capacity of anywhere between 10,000 to 12,000 metric tonnes per year. That's kind of a capacity at Ahmedabad. Kheda with those 2 manufacturing base in place, it has got a capacity of close to about 5,000 to 6,000 metric tonnes. With one more bay getting added up, it would add another 3,000. So Kheda with 3 manufacturing bays once completed somewhere next July, we should be having a capacity of close to 18,000 to 20,000 metric tonnes -- sorry, 8,000 to 10,000 metric tonnes.
And Mabel, currently, with the capacity in place, they have a capacity of 2,000 metric tonnes. So let me repeat, Ahmedabad 10,000 to 12,000 metric tonnes. Kheda, once the next phase is closed, it will be 8,000 to 10,000 metric tonnes and Mable at 2,000 metric tonnes. In terms of the revenue, the current capacity in place, that is Ahmedabad, Kheda and Mabel that's good enough for INR 1,000 crores turnover.
Right. And could you also call out what capacity utilization you are running at new Kheda facility because you've been also shifting a lot of your heat exchanger production there? Is it running at almost full capacity utilization and then Kheda is more opened up?
So heat exchangers is all in Ahmedabad. We don't make any heat exchangers in Kheda. Kheda is broadly making vessels, reactors and columns. And the capacity utilization currently that the Kheda is at 75%.
Sorry. You mentioned Kheda or Odhav?
Kheda, Kheda is at 75%.
And what about the Odhav facility? Is there -- you have a lot more head room?
No. So in Odhav, it's completely utilized. So we don't have much of head room there, probably 85% to 90% is the utilization at the moment. So we have 5% to 10% kind of a leverage.
Right. I think see the disconnect is with respect to the revenues that you've already clocked. And then, I mean, for you to go to almost INR 1,000 crores in scale. And even if you were to not include the new bay that you're adding, and that should be sufficient to take you to about INR 1,000 crores in revenue which you had earlier guided in the call as well. So I'm just trying to sort of reconcile the numbers here, if you're saying Odhav is fully utilized and the Kheda facility is already 75%, I mean how do numbers go up to INR 1,000 crores in terms of revenues? And please correct if there is misunderstanding here.
No, that's correct. So let me just explain. So in FY '26, when you look at FY '26, Ahmedabad facility will be at INR 600 crores. Kheda facility next year because it will have 2 quarters of the new additional bay that we are building in will be at INR 300 crores and Mable will chip in at INR 100 crores. So that's INR 600 crores, INR 300 crores and INR 100 crores and that's the kind of turnover that we are looking at.
Understood. Understood. I think this is very helpful.
The next question is from Chetan Vora from Abakkus Asset Managers.
Congratulations for your great set of numbers. I wanted to ask few questions adding to the questions asked by the previous participant. As you mentioned that the Kheda will be having INR 300 crores of revenue, and it is at utilization of 75%. But that 75% is the first bay of the phase one, right? The second bay has recently got operationalized isn't it?
So right now, both the bays in Kheda are operational. That is 2 full complete manufacturing bays are operational.
Okay. So both of them are being utilized at 75%?
Yes, that's correct.
Okay. And the expansion what you have kicked off recently, this will be getting commissioned when?
So this will be commissioned in July, August next year, the construction would close, and we will kick start the production in Q3 of next year, that is FY '26.
Okay. And the revenue...
It will deliver revenue for 2 quarters into the next year, Q3 and Q4.
Got it. And then the execution of the order book is INR 890 crores and as of date which is close to INR 930 crores, we have got a strong visibility for this year as well as next year. But what is EBITDA margins that we are making currently in terms of profitability?
We are looking at the -- as I said, we are looking at the same margin of 20% plus, so anywhere in the region of 20% to 22% would be the EBITDA.
Right. I observed some accrual on the balance sheet front, the debtors have increased quite sharply for the first half like INR 220 crores, which was INR 127 crores as of year-end. Any comment on that debtors spike?
Yes. So that's purely -- what has happened is there were some equipments meant for exports where customer has -- since the site is not ready has asked us to put it on store, so we have actually stored those equipments in Kheda, and it will be delivered somewhere in December end of this year.
So you mean to say that [indiscernible] so why the debtors are up, you said the delivery will be in December.
Hello, Chetan, can you just -- your voice is humming. You asked debtors?
Yes debtors. I was not able to get what you said as to why the debtors have popped up?
So the equipments which -- because we get the advances, right, which is roughly about in the region of 25% to 40% depending on which order is. And the balance is at the point of dispatch. So unless you dispatch we will not be able to raise the commercial bill. So this was supposed to get dispatched, so they will be getting dispatched somewhere in the month of December.
Okay. So the billing has not been done, but this is unbilled invoice you are saying that?
That's correct. That's correct.
And what should be the amount for that? What is the amount -- you said -- what should be the billing amount, I mean the unbilled amount?
That should be close to about INR 60 crores, INR 65 crores.
Okay. So even after excluding INR 60 crores, INR 65 crores of unbilling part, the debtors comes to around close to INR 160 crores, and the [ company sales ] are about INR 190 crores?
That's correct.
So is it fair to assume that the dispatches would have been at the fag end of the quarter?
Yes, that's correct.
Can you throw some light why the taxes have been so low for the 3 quarters consistently, quarter 1 and quarter 2. This quarter, the taxes was about 15%?
Nilesh, can you chip in?
Yes. Chetan, can you just repeat the question? The same way like your voice was humming so I could not hear that.
Sorry for that. I was asking why the taxes have been low?
Tax?
Tax rate.
Yes. So in this quarter, there was an exercise of ESOP of roughly -- if you look at the notes of our standalone, the number of ESOPs exercised by the staff was INR 1,01,500 for the quarter. That's the reason why there was a ESOP-related expense which sits in the balance sheet -- sorry, P&L, tax P&L. That's why the tax amount is quite low, quite low. That is the only reason. And probably except ESOPs granted to the [ raisee ] there were certain ESOPs which were granted to the ex-CEO, Mr. Rishi Roop Kapoor, who has exercised most his ESOPs in last quarter. Now almost all those ESOPS are granted. So in the long run, we can expect the tax rate of 25% but this was the only reason why tax rate was so low in this particular quarter. We take that number of ESOPs granted in the notes of standalone as well as consolidated for this financial year.
Next question is from Kunal Shah from Carnelian Capital.
Congratulations on good set of numbers. I had the same question on receivables. Actually, I could not hear properly. So our receivables have gone up from INR 127-odd crores to INR 229 crores, that's almost by about INR 100-odd crores in the 6 months. So I mean, what is the reason for that? I mean our receivable cycle has gone up? Hello, hello. Am I audible?
Yes, Kunal.
Yes. Yes. I had a question on receivables.
Please go ahead.
Our receivables, which were at about INR 127-odd crores in March '24, has gone up to about INR 230 crores in September '24. That's almost an increase of INR 100-odd crores. So is it that our receivable cycle in the current half year has gone up?
Yes and no. One reason is, of course, as I answered earlier, it is because of the unbilled revenues. And the second is, as we have more and more exports now coming in, the last 10% payments are on the documentation part. That is where it's taking a little longer term, but it's in the cycle, like it takes about 45 days to 60 days for us to encash the last 10% of the payment, which is reflecting in this and the dispatch is happening through the later part of the quarter.
But unbilled revenue should be sitting in inventory, not receivables, right? Correct me if I'm wrong, right, if it's recorded as sales.
Kunal, so unbilled revenue, so here in this case of an equipment which is billed, revenue recognition point would be the moment when the IRN is received mostly when the goods is accepted by them. Because as per accounting standard, there are various portion wherein we don't have alternate use of this particular product, and it has very limited chances of getting rejected because it goes through the customer quality point at every stage. So at that point in time, when the IRN is ready, we recognize the revenue. If you look at the last 2 year balance sheet even there you will find considerable amount of receivable which is shown under the unbilled.
But this time, there is one of the consignment where customer has asked us to stop the supply and store at our end, and they'll also give us the storage charges. So for that particular shipment, you find a bit higher data, it's normal in equivalent to the increase in the overall business.
Okay, got it.
Kunal, what I mentioned is today, if you actually come and see in our Kheda facility today, there is a huge separate storage area created for these finished goods. They have been moved from our Odhav facility to Kheda for storage. And that's precisely because customers have requested us to store it for additional 3 months, and we are being paid for those storage charges additionally than the equipment as well. As I said towards the later part of this December, the shipping would be -- these are export orders going to U.S. and Canada and other parts. Towards the end of December, the shipping would be arranged. Shipping is in the scope of customer. Our scope is incoterms are only up to FOB. So once the shipping is arranged, all these equipments would move.
Okay. Got it. Got it. And the other question that I had in the current quarter, we have done sales of about INR 45-odd crores for towers and reactors, right, which was on an average about INR 5 crores in the previous quarter and about INR 15-odd crores in the quarters before that. So if you could help understand this is largely to do with Kheda coming onstream and how should we see that? And also the end users where this is getting used basically?
Yes. So you're right. These are largely reflecting Kheda contributing into the revenue. So as I said, all the vessels, reactors, columns would be actually made in Kheda. So almost 90% to 95% of the revenue that will be clocked by Kheda will be from this product. And as I said, strategically, at a macro level, heat exchangers should be around 60%, and these other products should be around 40%, largely coming from Kheda and Mable.
Got it. Also, if you could help understand the end user industry basically that would help understand a little bit more on this product piece?
This is both for petrochemicals and gas projects largely, the orders that we are executing today. So that will be a set of heat exchangers and vessels needed. Heat exchangers are being executed in Odhav for the same project, and the vessels are being executed for the same project in Kheda. So these are same conventional projects, but more focused towards petrochemical and LNG.
Got it. Got it. Got it. Got it. And what would be our CapEx spending amount for the remaining half of the year? How much do we plan to spend in the coming 6 months for the construction of the additional bays at Kheda?
So the added bay at Kheda would be at a CapEx of about INR 50 crores, INR 40 crores to INR 50 crores inclusive of the machineries, which we plan to commission in Q2 of next year. And there would be about INR 15 crores of regular CapEx for upgradations of our machines of latest technology.
Got it. Got it. Got it. And just wanted to understand on this order inflows, like they have been pretty robust in the current quarter and the closing order book also. So by year-end, how we should look at -- I mean, there is ample visibility for the next year. But how should one look at that? What's your sense? I mean, how is our order pipeline looking like presently? Will we be able to kind of utilize the capacities that we are building up and also basically speed up the additional capacities to kind of utilize from third quarter of the next year? So if you could just provide a little bit visibility on how the order book visibility is looking like for the remaining 6 months?
Yes. So the average inquiry pipeline looks to be the same region of INR 900 crores to INR 1,000 crores, which has been over the last probably 3 to 4 quarters, which is quite encouraging. But of course, having said this, the largest chunk comes from exports. So by the end of the year, as I said earlier, we wish to open the year with almost a full complement of our order book -- of our plan for next year. So by March end, we should open up the year, first of April with close to about INR 900 crores kind of a pending order book executable in next year.
The next question is from Amit Jain from Citi Advisors.
My question is already answered.
We will move to the next question. Next question is from Abhishek Singhal from Naredi Investors.
Wishing you Happy Diwali in advance to Anup team. I had only one question. Is there any plan to monetize the facility in Ahmedabad because there is a problem in transporting the big project? So this capacity transfer to Kheda, so any plan to monetize Ahmedabad facility?
So Amit (sic) [ Abhishek ] not really. And that is the strategic choice that we have made of making heat exchangers in Ahmedabad. Now heat exchangers generally are smaller in sizes. They don't pose much problems in transportation. And the limit for us in Ahmedabad is about 5.5 meters diameter equipment that can be moved out from Ahmedabad with ease. And most of the heat exchangers would be below that. So that is a precise reason why we have decided to have heat exchangers being manufactured in Odhav and we wish to continue that. And Kheda will expand to the master plan of 7 bays, making vessels, reactors and larger-sized equipments because of its sheer location on the National Highway.
And also added to that, we have the complete machine shop needed for machining of heat exchangers built at Odhav. So we wish to be there for heat exchangers. And also, the location is very strategic because as I've said in my earlier calls, too, the most important raw material for heat exchangers is tubes. And all the world renowned tube manufacturers are around probably at 40-kilometer radius from our facility in Chhatral area. So the location is ideal for heat exchangers manufacturing.
Next question is from Ajinkya Jadhav from Kris PMS.
My question revolves around this Graham arrangement. If you can throw some light on what is the role of Graham in this arrangement, like kind of product portfolio, the deal with them and the application? This is the first part.
So Graham Corporation has been a pioneer in heat transfer and vacuum systems, which are used in refineries, petrochemicals and any other process plants. So they have been doing business in India for a long time. They have been our customers for a long time. As I said, even today, we are executing some projects for our IOCL projected in India. So they will -- they were our customers. Now we have become strategic partners, wherein we become their exclusive manufacturers now.
So in simple terms, if Graham wins an order in India or globally, we should have the first chance for refusal for executing that project. So it's sort of a volume guarantee of business for us.
Okay. And how is the business arrangement like? Are we going to pay them the royalty? Or how is it?
No, there will be no royalty. It's an exclusive manufacturing agreement. So we will be their exclusive manufacturer. There is a rate contract, which has been agreed, fixed for the year and with some clauses. And every year, we will review that rate depending on the commodity pricing.
And the margins will be similar to what we do in our core business?
That is correct. No compromise on the margin.
The next question is from the line of Aayush Rathi from Aditya Birla Money.
First of all, congratulations on a strong set of numbers. And most of my questions have already been answered. Just on the strategy side, sir. Sir, you mentioned in your opening remarks, we are looking for any opportunities as it comes up. Can you throw some more light on what kind of opportunities are we looking at? Is it on the collaboration part? And like if on the collaborations, which -- like is it on something that will boost our existing product portfolio or anything else? Can you throw some light on that?
Yes. So the collaboration that we are looking at or acquisitions that we are looking at is not on the capacity side. So as I mentioned earlier, anything to do with capacity expansions in our existing product portfolio, we would prefer to do it in Kheda since we have a land and we can expand. So whatever opportunities that we are looking at is more on the strategic side in a sense of getting additional product portfolio other than the products that we have today or on some technology acquisitions, that is where we are looking at.
So it should give us a parallel product portfolio. It should give us a futuristic product portfolio in terms of something into green energy or even a design tie-up. So that's the area that we are looking at. Nothing on the existing -- no capacity addition in the existing product portfolio that we are looking at for tie-ups.
All right. Got it. Sir, another question on the order book side and inquiry pipeline, in fact. So we are seeing a lot of orders from the export side as well. We can see it in the export order book as well, the contribution from export side. So just wanted to understand because of the global scenario, which is right now going on, do we see any challenges? Do you foresee any challenges in the coming years? I know you have been quite optimistic with your remarks. But just wanted to understand that is there any risk on the execution part?
Yes. So you're right. The concern stands right considering the current geopolitical scenes, but as I said earlier too, we are very cautious of which countries or which projects we work with. So if you look at most of our -- in the export profile today, most of our orders and the projects that we are executing is for the U.S. and Canada. On the Middle East side, it is more to do with Abu Dhabi for ADNOC, that is Abu Dhabi National Oil Company and Saudi Aramco, which is in Saudi Arabia. These are the only 2 countries that we are doing in the Middle East.
And on the Southeast side, it's Australia. So we are very choosy about the countries and the projects that we work with, precisely the reason that you spoke about. And we select -- so if you see any of the disturbed regions today, we don't have any projects or any customers that we work with there. But having said that, yes, geopolitics is always a challenge when it comes to exports, and we are very cautious, and we do a lot of due diligence before we pick up any projects in the exports.
Next question is from Vikram, who is an Individual Investor.
My question is really around the fact that at the end of next year, we would have pretty much exhausted our entire capacity. So in terms of thinking through on the next round of CapEx, when would that be? And any initial thoughts on that? And the second piece really is around the fact that you did mention early on that there was some imminent competition that's coming in. So do you want to spend some time on what that means for us?
Thanks, Vikram. So on the capacity additions, the next decision that we would make is somewhere in the month of June, end of quarter 1 of next year, because that would be the right time for us to get the capacity additions. As I said, we will give this time now from now on to next June for us to look at opportunities in the market. If something comes well, we would definitely take it or else we will go ahead with the additions of the capacity in Kheda.
Similar to what happened today, if you look at -- we were holding on the decision for expansion of one more bay was only because we were looking at and exploring other opportunities. But then to time it right, we took this call so that we have enough capacity built in for FY '27. So this should be good enough to suffice our 25% to 30% growth guidance for the next 2 years. And we would add -- so a direct answer to your question, next June would be the decision on the next capacity additions.
On the competition, as you know, we play into the export market now, close to about 50% of our business is into exports. Domestic as last couple of quarters, it has been down. Of course, we see it reviving now towards the end of this quarter and moving forward, things should normalize but during this interim phase is where since most of our competitors rely on domestic orders, and there are not good opportunities right now on the table, the competition is a little steep. And that's where, I think, for us, fortunately, what has helped us is spreading geographically has helped us. So the competition is there in the domestic market, but exports is something that is helping us build up our order book position.
Next question is from Balkrishna [ Jajodia ], who is an Individual Investor.
Am I audible?
Yes, clearly, please. go ahead.
Congratulations for good set of numbers. I just want to know that you earlier mentioned that Graham Corporation that is price -- purely price-based contract for the 1 year. I want to know if any geographical changes and any uncertainty happens within a year, then what -- any clauses being added to the contract that can increase the margin -- increase the price so that not let go margin for the year? I just want to ask that one.
So we don't have any price variation clause in our contract and nor it is there in any of the contracts, by the way, that we execute for even our customers. The only thing that we have in this contract is the first chance for refusal. So we have and there are some clauses in-built because since we are partners together. Unforeseen circumstances like war or COVID or pandemics, any other situation that would abruptly take the commodity pricing to extreme, we definitely have amicable solutions within the contract. But variable price contract is definitely not in place. And just for information, we do not have that contract in any of our contracts that we execute. So that is where the forecasting models of our commodity and raw material pricing helps us during the estimation process.
Next question is from Mohit Surana from Monarch Networth Capital Limited.
Congratulations on the good set of numbers. Just one question. Can you give some insights on the overall competitive landscape and the total market opportunity for our products both in India and globally? Yes, that's it from my side.
Yes. So the competition profile remains the same. It has not changed for us. It's only that in domestic, the competition has got a little more aggressive because of lesser opportunities on the table as of now in the current interim period. But as I said, once the opportunities pick up towards the end of this quarter, things should normalize. In terms of the opportunities globally, of course, spreading geographically helped us. So as I said today, we are sitting on an inquiry bank of close to about INR 900 crores to INR 1,000 crores kind of an inquiry bank, largely fueled through exports and to be finalized in possibly the next 2 to 3 months kind of a window. So the inquiry pipelines are looking healthy. Domestic so once it picks up towards the end of the quarter, we should be in a much better position even on the competitive front. Did I answer your question?
Yes. Yes. Sir, just can you just give some number on the overall total addressable market for our products? Is there any kind of estimation that we have?
So the overall pie, it's based on the market analysis that we do. So overall pie for the product portfolio that we deal with as Anup Engineering and as Anup Engineering, we are interested in, the overall product pie is close to about INR 18,000 crores to INR 20,000 crores per annum. That's kind of a pie, and then we keep taking shares from that. So spreading geographically was one strategy where we could garner more exports share from the same pie.
Thank you very much. That was the last question. I would now like to hand the conference back to Mr. Reginaldo Dsouza for closing comments.
Thank you. Thank you, everyone. I once again take this opportunity to thank my wonderful team at Anup and to each and every one who supports and helps us deliver results. We thank you to all of you, our shareholders, for your trust and standing by our side always. Thank you. And on behalf of my team at Anup, I wish you all a very happy, healthy and prosperous Diwali. Thank you, and take care. Bye.
Thank you very much. On behalf of Anup Engineering Limited, that concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.n