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Anup Engineering Ltd
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Ladies and gentlemen, good day and welcome to the conference call for analysts and investors for post results discussion for quarter Q4 and full financial year 2019 and '20 of The Anup Engineering Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rishi Roop Kapoor. Thank you, and over to you, sir.
Thank you, [ Rehman ], and good afternoon, everyone, who has joined this call. And before I begin, let me share with you that I have with me our CFO, Mr. Rakesh Poddar.
Good afternoon, everybody.
And our Company Secretary. Mr. Chintan Patel. We appreciate you joining today for the -- for our fourth quarter earnings call for FY 2020. Before we proceed to the call, let me remind you that the discussion may contain forward-looking statements that may involve known or unknown risks, uncertainties and other factors. It must be deemed in conjunction with our business risk that could cause actual results, performance or achievements to differ significantly from what is expressed or implied in such forward-looking statements. Please note that we have mailed the results, the press release and also the outcome of the Board meeting, and the same are available on the company's website. In case you have not received the same, you can write to us and we would be happy to send the same over to you. We had our Board meeting yesterday to review the annual financial results of FY '20. As you all know, FY '20 per se has been a challenging year for many reasons. The overall economic scenario has not been too encouraging. But I'm happy to report that barring COVID-19 impact, in the overall, we had a decent performance on the financials of the company. And I hope that you have received the investor deck, which we have posted on the website to elaborate on the performances. I'll first briefly mention the highlights of the performance of the Q4 and the year as a whole, and then we will proceed in the remaining comments. As most of you have seen, the Q4 numbers have seen muted growth. This is primarily due to the fact that we had about 3 weeks of critical activities getting impacted because of the nationwide lockdown due to COVID-19. Therefore, Q4 FY '20 is not really comparable with Q4 FY '19. So in fact, what has happened, March being a very, very important month for the manufacturing industry and we are no exception, this has impacted our sales performance approximately by about INR 30 crores to INR 35 crores. All in all, we were progressing towards the target that we had initially planned. However, the impact has been significant to the extent I mentioned earlier. With regards to the numbers for Q4 FY '20, the revenue has been higher by about 8% at INR 70 crores compared to the corresponding period last year. But because of higher cost absorption and the overall sales loss that we had in Q4, EBITDA has been lower at 11% compared to the previous quarter of corresponding period from INR 18 crores to INR 16 crores, and at a margin of 23% compared to 27% last quarter. Adjusted for 3 weeks of production loss, the growth would have been something like 55% in Q4, where the revenue would have touched INR 100 crores as compared to INR 65 crores last year. Having said that, we are now happy to report that overall the year ended with revenue of INR 245 crores, which was higher by 11%, with an EBITDA of INR 69 crores, again higher by 13%. This is the highest ever EBITDA performed by the company and highest ever PAT of INR 43 crores as compared to the INR 39 crores of the last year. Going forward, we are confident that with our focus on conserving capital, balance sheet protection and management of our operating expenses should hold us in a good stead vis-à-vis the prevailing COVID-19 situation and the challenges that could spring up in the coming months. On the funds part of INR 44 crores as on 31st of March 2020, which has further strengthened by additional earnings of INR 21 crores translating to INR 65 crores as we talk today. We had an order book of INR 267 crores as of 1st of April 2020, which has been further strengthened, giving us a very robust visibility ahead. In fact, we are happy to report that since 31st of March, till now, we have booked an additional orders worth about INR 101 crores, INR 102 crores approximately, and our inquiry pipeline continue to remain strong with healthy opportunities for us to book orders during the coming months.On the CapEx front, as well, the 30-day extension at the company's existing facilities in Odhav have been completed successfully in the month of January. We were delayed by about a month or so, about 1 or 1.5 months. But this goes a long way in strengthening our manufacturing capabilities at Odhav. This would also help the company to execute larger and more complex equipment orders. Further, the company plans to ramp up its Kheda project to catch up on the lost time due to COVID-19, at the same time balancing the cash flows with a cautious approach precipitated by the pandemic. As far as the dividend is concerned, the Board has recommended a dividend at 70%, that is INR 7 per equity share of INR 10 each of the company for the year ended 31st of March 2020. Thank you very much for your patience, and we are now ready to address your questions.
[Operator Instructions] The first question is from the line of Rahul Jain from Credence Wealth.
Congratulations on a good set of numbers in the given conditions, sir. Sir, I have a couple of questions. So first is with regards to the order inflow. So quarter 1 has seen a wonderful [ quarter, additional orders ] were INR 89 crores as given in the presentation. So just wanted to understand 2 things. One is from what segments these orders have been received? And going forward, given the situation as we speak today, where do you expect traction to come in further order inflows? Which segments do you feel could -- the segments where we can have much better orders where the growth momentum of order would continue? And any of the segments where you see there might be some issues here and there? With regards to orders also, any deferment of any of the orders which is there in the order book? And the current order book, what kind of execution cycle do you have in terms of the time period?
Good afternoon, Rahul, and I think that was more than 2 questions. But let me begin by just updating you. Yes, INR 89 crores of order book has happened -- was there until 24th of June until the time we had, I think, posted that presentation. Then [indiscernible], further to that we got further orders of about INR 12 crores, so that takes the total number to about INR 101 crores. Currently, the orders have grown in -- I mean, from our -- from the refining sector with the new refineries, which are -- which is coming up in Barmer in Rajasthan. We've got orders from there. And plus the additional facility that is being created by HPCL in Vizag. These 2 have been the primary sources. Added to that, we have got some orders from export as well, and this also was from the refining industry. So in a way, the order mix that has happened in the -- these 3 months have been primarily from the refining sector. We got -- we did get a breakthrough order in the power sector and also from one of the coal-testing facilities of ISRO. So these have been like sectors which have been kind of new for Anup Engineering. So that takes our total order book to about INR 368-odd crores. And this is an all-time high for Anup Engineering. Look at the order mix. Yes, we have orders from refining sector, it continues to dominate. We do have orders from sectors, midstream, petrochemicals. And of course, a big chunk of orders are coming from relatively newer sectors like LNG, power sector, and like I said, coal-testing facilities, chemical sector. Paper and pulp industry, that is another different kind of a segment of the industry which we have entered into. And these are the primary business -- industry segments from where we have got the orders. If you were to look at the mix of export versus domestic, I think for the last year, the INR 245 crores is split about 12% export and almost 88% are domestic. As moving this bouquet of INR 368 crores, almost 23% to 24% is exports and 77% is domestic. Hope I have been able to answer all your questions.
Sir, this order will be -- what is the execution cycle for this order, the current order?
Typically, Rahul, these are static equipment, these are critical equipment and made to order. So these are not being the standard products. From each and every order, the engineering has to be there performed, followed by its own specific procurement, there are no standard materials that we can stock. So typically, the order cycles vary from, let's say, 7 months to anywhere up to 14 months or 15 months, depending on the criticality of the equipment and the material lead times.
Sure. Sir, just 2 more quick questions. One is with regard to this INR 44 crores of loans, which was given among our group companies. And as for the current balance sheet, currently, that appears to be 0, but we have about INR 20 crores in financial assets and about INR 24 crores in other expense segments, again as a part of investment. And your presentation does mention about some funds being invested into FD with State Bank of India. So can we know this investment of INR 20 crores and INR 24 crores, if you could share some details about this?
Yes. As of now, we have adopted a very conservative approach in line with the decisions at the Board level. And we have passed these funds as FD in the State Bank of India.
So this entire INR 44 crores now is with State Bank of India as an FD?
Yes.
Yes.
That's true.
So that's very nice that...
But it has now increased to maybe, as on date, it would be somewhere about INR 65 crores.
So this is quite good, sir. That means our intercorporate-related party transactions where we had advanced these loans to Arvind group company...
As we know, completely, this is now reduced to 0.
So that is so nice. And lastly, sir, there's a sharp reduction in other expenses in this quarter. We have been generally averaging about INR 13 crores, INR 14 crores of other expenses on -- in each quarter the last 4, 5 quarters. So this time, it has down to around INR 8.5 crores. Any specific reduction which we have done? And typically, given the current scenario, we are taking certain cost reduction measures so which could be sustainable?
So...
I'll -- Rahul, I'll let Rakesh answer this question.
So Rahul, in our other expenses, we are having freight expenses. Also, we are having labor expenses. We are having 4 buckets of raw materials and stock, employee emoluments and other expenses. So these other expenses is in the bucket of all those expenses, mainly pertaining to freight, labor charges and our other manufacturing overhead. So yes, as you rightly commented, we have been able to contain many of these expenses so as to reduce from INR 13 crores to INR 8 crores in the comparative quarter.
Sure.
But it also depends, Rahul, just to elaborate a little bit more on this is that the freight expenses tend to be -- like it depends on the site where our equipment has to reach and also on the scope of our company. So a lot of these orders, the freight was included in the scope of the customer, which is the reason why you see this as a sharp reduction as compared to the previous quarter of the last corresponding period.
[Operator Instructions] The next question is from the line of Kirthi Jain from Sundaram Mutual Fund.
Sir, congratulations for a phenomenal set of results and good order flow. My first question is with regard to -- in your presentation, you have highlighted that we have -- continue to have a strong pipeline. So in that regard, how you see the order flow in the rest of the 9 months? I know you actually achieved INR 100 crores plus in the first quarter itself. How do you see the order flow in the remainder of the period, given the strong order pipeline you see? And also, how you see the margin trajectory in the orders, which we have taken in the recent times? We see that -- whether we would be able to maintain the similar margin range which we have been doing. So these are the 2 questions from me, sir.
Yes. To answer the first question, I think the trend which has been set in Q1, I do not really see that ebbing in the coming months because we continue to have very strong pipeline of orders -- of inquiries. And again, we are in that position of like we are going to be maybe more selective. We'll have to take into consideration the kind of capacities that we have. Because the most important aspect of dealing with Anup Engineering that our customers have conveyed to us is our phenomenal on-time delivery records, and that's the kind of reliability that we have developed. And we would not like to dilute that because that's something which is very close to our heart. So order booking, as far as the availability of opportunity is concerned, is not a problem. Going forward, I don't see any different there. In terms of the margins also, we have been very pretty consistent in the kind of margins that we delivered. I mean, overall, if you look at the last year, we delivered a 38% EBITDA as compared to 27% in FY '19. And again, the process of evaluation of inquiries and the prices that we offer to our customers, the process of evaluation does not change at all. So we don't see any kind of changes in the margin trajectory in the months to come.
Sir, last question. Sir, what will be the CapEx outlay which is planned for FY '21? And what were the areas in which where the CapEx was spent in FY '20? That's the last question, sir.
So in FY '20, like we have mentioned, I think we have also presented in the -- in our presentation to the investors is that we have created this new bay. We have -- it is a kind of an extension of our existing Heavy Bay. So that itself is about INR 13 cores. And so this is the work that we have been able to do in Odhav. This is in the existing facility. Because of several factors, which included kind of extended monsoons in this area, we could not really work to the extent that was possible at our new facility, new land that we have purchased at Kheda. And the moment that we were regrouping and remobilizing our resources to take that work forward, we were hit by the COVID outbreak. So everything pretty much came to the standstill, and we were not really able to take it forward in Kheda. So the entire CapEx outlay of almost about INR 200 crores, that continues to remain in the pipeline, and we intend to maybe do it in the next 2 to 3 years. In this current year, we have started the work at Kheda in a limited manner. But at this moment, because of the uncertainties which are there because of COVID, it is not really possible for me to make a prediction as to how much we will be able to do in this year. Our intention is that we would like to at least create one bay in Kheda in this year and also create one clean room in our facilities that would help. So these are the 2 things that we are planning. We have like plans going of ahead in this current fiscal. Work has started. But then, again, like I said, there are several factors which are not really in our control. And as we move forward, we got to like balance out everything without taking too much of risk in terms of moving ahead on the CapEx. But we stay committed to the original plan that we have of developing the plant in Kheda, which will be a state-of-the-art facility comprising of total 8 bays, with like a lot of additional augmented facilities which will take us and propel us to a complete new product range in the pressure vessels and columns business. And also the clean room in Odhav is extremely important to -- I mean, strategically, it's very important because we want to position ourselves as a fabricator who is not limited by the kind of metallurgy that we can offer. So in that way, we will continue to make our efforts.
The next question is from the line of Apurva Shah from PhillipCapital.
Sir, my first question is with context to your opening remarks. So you said INR 30 crores to INR 35 crores of order was impacted because of the COVID situation. So just wanted your clarity, so that INR 30 crores to INR 35 crores will be reflected in Q1 or Q2? And as on March 20, the same number because that vessel or equipment might be sitting as an inventory in our balance sheet?
Yes. I think to an extent you can say that the equipment were in the final stages at that time, meaning that maybe the final joining or final assembly was remaining or the testing of the equipment, the final hydro test -- hydrostatic testing of this equipment was pending, and that is certainly going to reflect in the Q1 and Q2 sales.
Okay. So basically, that is not a revenue loss but it's a deferment. So maybe in Q1, Q2, that will be adjusted somewhere.
No, absolutely. It is not a loss of revenue, it is going to be like kind of spillover into March and into the next quarter.
Great. And sir, second question is related to like, it's heartening to see your order book at INR 368 crores. But can you just guide us through our user industry? Because our most of the user industry, which is like refinery or petrochemical, which is passing through double [ emission ] situation. So how do you -- what kind of feedback you are getting, sir, from your customers or consultants we are working with, because we are working with one of the top most consultants, so what is their expectation? And what they expect when this situation will be getting normalized? And have you seen any of the user industry CapEx getting delayed or canceled?
On the contrary, there are -- some of the -- a lot of these investments which are happening in India are in the refining sector and they are -- because of the environmental norms. And going forward, these norms are going to become stricter and stricter. And even in the developed world also, we will have the second or third wave of these norms. So even in the western countries, we will have the refineries who will have to upgrade in order to keep up with the emission norms, which those countries are going to adopt in the coming future. So it's not really that -- it's something which the refineries will have to do to stay in business and to keep producing. Similarly, in the fertilizer sector and most of these fertilizer plants, especially in India, they are coal-based and they would like to be converted into gas. So those kind of projects will continue to happen in the fertilizer sector as well. Plus we are seeing that a lot of power plants in India doing their power surplus, but still the main feed continues to be -- they are all coal-based and they will have to be -- we have abundance of coal as a natural resource. So that has to be -- maybe the coal gasification plants will strike a balance, which allow us the balance to find the best optimum use of this resource, very important resource that India has and convert these power plants from thermal-based to maybe gas-based. So these are the things that we are looking at. Plus, like I said, Anup Engineering -- at Anup Engineering, what we believe is that we are skillful with materials. We are skillful with metals, all kinds of metals. And we know how to cut them, how to form them, how to build them. And this is where our skill set lies. And our services are going to be available to any core sectors that will open up in the future. So that's how I would like to answer your question.
Great. Sir, just one related question to it. So out of this INR 368 crores of current order book, can you have the split across the user industries? First thing. And second thing, the split between domestic and export orders.
See, between domestic and exports, we have about 23% of exports and 77% of domestic. In terms of industry segmentation, if you were to look at it, we have almost 59% from the refining sector. We have fertilizer sector about 15%. We have midstream and petrochemicals about 7%, and the remaining comes from these kind of new areas for us, which are LNG, power, paper and pulp, maybe chemical sector, to that extent.
The next question from the line of Anand Bhavnani from Unifi Capital.
I have 2 questions. But before the questions, I would congratulate management for the very minority shareholder-friendly move of unwinding the transaction and putting it in FD. So my first question is about our broad expectations after COVID. Now if I were to refer to the last year Q4 FY '19 presentation, there, we distinctively envisaged that in 4, 5 years, we can touch INR 1,000 crores kind of top line. That was the ballpark kind of estimate we had. Now with COVID, how does that change? That is my first question.
So let me answer your question. See, broad long-term outlook does not change at all. We would like to view COVID as a short-term blip, though it is like going to -- has impacted us majorly in the past year and also continues to impact us in the current year. But hopefully, this is something that we will soon get by. It's all a question how soon, maybe in September, by end of this calendar year, we will have to wait and watch. But this will not really impact our overall strategic plan. On the long-term horizon of 4 years or so, 4 years or 5 years, we will -- we continue to aspire to achieve INR 1,000 crores. And it is to this sense that we are investing in our plants and facilities, to upgrade our capabilities and capacities. If you look at our asset base, currently, it's about INR 156 crores, with another INR 200 crores that we had planned outlays for. It's going to be about INR 350 crores. So if we were to even look at an asset turn, which is less than 3, we should be able to hit INR 1,000 crores, if we were to optimally utilize our capacities. So that's how I'd like to answer.
Sure. And secondly, with regards to our CapEx since the plan for new bay -- new development at Kheda is kind of currently postponed a bit just to one bay, wanted to understand, with our existing setup, what is the revenue potential possible? And would you be able to take all the orders? Or would it delay entry into certain newer segments because the Kheda plant is currently pushed back a bit?So in terms of our capabilities, any new capabilities which we will now have to start doing later because we don't have much space? From current capability, what is the revenue possible?
You are talking about the overall possibility, the potential that we have from the current capabilities?
Yes, current capabilities, the revenue potential from the fixed infrastructure that if you are to utilize to optimal level, what is possible?
That should be able to give us about INR 500 crores, anywhere between INR 500 crores to INR 600 crores. And that's the capability that we have built at.
And given that Kheda plant is now a bit delayed, does it in any way limit our entry into the newer product segments that we are planning, the process...
Not really because we have been able to strengthen our capacities in Odhav to quite a high extent. And this bay that we have created over here, which we had commissioned by end of January in Odhav, I mean, that is, again, one of the state-of-the-art kind of facilities with heavy lift capabilities. Not yet -- not to the extent of 800 metric tons, which we plan to achieve at Kheda, but here also, it is able to lift up to 500 metric tons. So to that extent, we will be able to take our initial steps in the direction of having a different kind of a product mix. And we already have orders which are quite different in the order bouquet that we have. There are equipment, which are heavy vol, heavy thickness which where we are going to utilize the facility that we have already created. Just to set the Kheda project line into a good perspective, we had initially planned that -- and I remember that what we had planned was the commissioning of the first bay at Kheda. First bay at Kheda was scheduled to be in the month of June or July in this year. So this stands impacted. But like I said, we are on the lookout, we are focused on that creating that infrastructure very fast. And if we get the opportunity, if we get a clear window, we will go ahead with that. So that also should -- like I'm not able to commit to you, not able to indicate to you the time line in which we will be able to do this because, of course, of so many uncertainties. And the prime focus right now is to do justice to the orders that we have, the strong order book that we have. And of course, keep making progress in Kheda to the extent possible.
Just a bookkeeping question. In last year's presentation, year ending presentation, you had given a split up of heat exchangers and pressure vessels and other smaller areas of the order book. So the INR 300 crores order book was split into 5 areas. Can you give that split for the order book as we have as of today?
More or less, it continues to remain the same because from Odhav, we are like -- our traditional product mix has been predominantly heat exchangers. But I would say that in the current fiscal -- from the order book that we have of INR 368 crores, I think, this year, we would be slightly higher on the vessels. I think maybe about from somewhere, I think, 22% last year. I think it would be more to the tune of about 30%. So 70% heat exchangers and 70% vessels services and columns -- 30% vessels and columns, sorry.
The next question is from the line of [ Adika Gupta ] from [indiscernible].
Sir, I wanted to know what is the kind of competition against which we won these orders for the coal-testing facility from ISRO fertilizers, the newer segments that we've entered into. Are we seeing like gate competition there? And are we seeing any realization pressure?
See, again, like I said, the kind of facilities that we have, the kind of engineering and manufacturing capabilities that we have, we are all -- I mean the battle is being fought amongst 3 or 4 of the leading fabricators in the country. So and you all know about those companies. So I think the -- and this was right there at the top one of the highest segment, highest end equipment with thicknesses very high in excess of maybe 6 inches. So that will limit our competition. It rules out a lot of other companies. So it was limited to that. But having said that, there is always -- the pressure from competition always drives us to be better and better. So we would like to, I mean, state that.
Okay. And how would be your current capacity utilization?
Of course, since the lockdown has ended in -- somewhere in the -- partially in the beginning of May in Ahmedabad, but still there were -- there's a lot of kind of other issues, which are -- which everyone is aware about, especially the safety protocols. The new way of -- the new normal, as we would call it now, has been pretty -- like it has taken some time for people to learn, and we have also taken kind of tentative steps towards ramping up our full capacity utilization. And I think we're still yet to achieve it because it was the 2 primary factors that have impacted. First is the COVID itself where it introduced a lot of protocols and a lot of administration guidelines that we had to adhere to. Working hours and the curfew timings, et cetera. It's only, I think, maybe about 15 days from the initial day that we really started to kind of partially started functioning maybe at the level of 30%, I would say. By the end of May, we were somewhere about 30% of our capacity. And at this moment, maybe we would be working about 55% kind of capacity.
Okay. And sir, do we see any impact because of the Indo-China tensions, like any of our raw materials, which we import from China because of that? Any of our orders could get delayed?
So here, I think, traditionally, the pressure of the industry has been quite skeptical of the Chinese material. So a lot of our projects, they bar us from using material from China. So to that extent, our dependence on China was less. In fact, in the last year, we were looking to explore new areas, and we did place a couple of orders, but then those orders have closed out. So as of today, there is no materials that we are importing from China. Whatever imported materials orders that we had ordered in China in a very limited manner, we have completed -- I mean we received that material without any problems. Going forward, of course, that -- how I emphasize is that we would be skeptical in ordering anything from China given the geopolitical situation that is prevailing in the region, of course. And even otherwise, if I look at it purely from a project perspective, I would not like to endanger the time lines by going ahead and ordering something in China and where the material gets stuck, and we have to relocate the orders. So as of now, we have decided that we will not order material from China. And in any case, in the past also, our purchasing from China was extremely limited. We were just beginning to kind of explore when this situation has emerged.
Okay. And sir, do we have -- have any of our orders, existing orders that we had received last year or the year before, has been canceled of late? Or any one...
We would like to -- in fact, pretty happy to report that none of our orders have been canceled. So none of our orders have been canceled. Yes, there could be limited holds on individual orders. But that, again, depends on a lot of technical changes, et cetera, et cetera.
Okay. And none has been renegotiated downwards for price either?
Not really, not really.
All right.
There's no justification for any negotiation. So I mean, that's something. In fact, I would like to maybe highlight that, in fact, last year, one of the achievements that we have made is that -- just in order to let you know about the kind of emphasis that we have on the project time lines is that we, in these times, in the month of, I think, in the Q4, in the period that we worked, I think, January and February, we were able to actually deliver 1 equipment to one of our end users and earned bonus on it. So that's something which we have achieved.
The next question is from the line of Abhilasha Satale from Dalal & Broacha.
Sir, it is just a continuation of the previous question. Like, we have said that INR 30 crores of order have been the -- I mean we couldn't book the orders -- sorry, the revenue couldn't book. So basically, I want to understand what is the reason for this. Is it from the client, this thing that they have delayed because our plants were shut, we couldn't deliver this order? And similarly, like as you said, our plants are operating at 55%. So will that impact also would aggregate in Q1?
Let me just clarify a little bit. You see the quarter 4 for manufacturing industry is always a very heavy quarter. I mean we tend to almost deliver almost maybe a high percentage, very high percentage, maybe 30% of what we do in the year is actually delivered in the Q4. And out of Q4, the month of March, especially, it's very, very important because by that time, we are hitting our peak in terms of manpower mobilization, in terms of capacity utilization, in terms of all our resource mobilization. So we -- that's the most productive month that we have in the whole of the year. So then the lockdown hit us and then this situation actually came into prominence. We were kind of taken by a surprise and it did start impacting us from 15th of March onwards when the client inspector -- there were restrictions on travel. So -- and people were not really knowing what is around. So there was a time in which there was a lot of skepticism and there are a lot of questions as to how things are going to pan out, and what exactly is this.So in that 15 days, we were not able to complete the orders, which were in the final stages of completion. So which means the final assembly, then followed by inspection activities, some of the NDT testing which is there and then hydrostatic testing and painting and finally dispatch. So these activities got impacted because of the last 15 days in March getting impacted because of the COVID. So that's how we could not build those equipment, as we had planned to do. And that has -- again, that has gone into the process stock for the -- as into the Q1 and Q2, of course. And then you will see those equipment, they are going to be now -- they will reflect the sales of Q1 and Q2.
Okay. Yes, yes. And depending -- I mean seeing the current order inflows and the visibility you have in terms of the opportunity size and all, this year, would you like to give any guidance in terms of top line? Because earlier, used to be 15%, 20% kind of guidance. So this year, would you stick to that number? Is there...
So it's very difficult for us to give any kind of a guidance. I mean based on the current situation of the -- we consider the situation to be stable and remaining like this across the remaining of the fiscal year. Maybe you'll say, we can be certainly expect double-digit growth. However, it is very difficult to make any kind of concrete predictions. Maybe the better time would be to evaluate and reassess at the end of H1. And that would be the time that a lot of contributing factors would have stabilized, and that is the time that we can perhaps say it more confidently.
The next question is from the line of Ronak Vora from AUM Advisors.
This is Saurabh Shah from AUM Fund Advisors. Question about sort of different kind of comments you've been getting. So it sounds like you have the highest ever order book for this -- as we stand today. Secondly, you mentioned that you'll have a bit of the rollover from the last quarter, the approximately INR 55 crores kind of gap between your budget and your top line, which will, as you said, will be carried forward in this year. And also, you seem to be having interesting new segments opening up. So it does look like your plots on the sales side, there is a good pipeline building up and there is a positive momentum on demand. And then you mentioned, I think, a few minutes ago that it is still very difficult, and you would look at potential double-digit growth here. I'm just kind of wondering between the 2, where should we sort of keep our mind at? It does seem a bit, just to comment on the number of -- for growth, there to be conservative relative to the other qualitative comments that you just mentioned. So could you give some more better...
Let me share with you. There are reasons for it because you see, the COVID impact is something that we will need to factor in. It's not just the [ rumors ] that we have lost. Practically, the whole of April and most of May was lost in COVID. So the damage has already been done for the year. And the more important factor that is -- that we need to look at is that restoring the plant capacity utilization. How soon we are able to do that is something which is what driving our efforts and our energies in that direction. So that's the reason why -- still, I mean, it's too early to make any kind of a firm kind of a projection because of the prevailing [ issues ]. There are quite -- I mean still, we are not like we are not having around the clock working. There are some few others that have to be factored in. And there is more than anything...
People involved and managing their...
Yes, of course. There is a human element which is involved here, where the people have really gone through a lot of trauma. So for us to really hit the levels, the pre-COVID utilization and the kind of momentum that we had at that time, I'm not really sure when we are able to get there. Plus, there are -- every day, you hear things like where the administration places restrictions on you by the ceiling of areas, ceiling of buildings. People tend to -- like, people could also be impacted because of that. So we will have to adhere to the various guidelines that come out from time to time. So keeping all that in mind, it is, yes, I am conservative as far as the projections go.
So I see. You're basically saying the execution could be addressed with the external factors in play and that's...
Of course, yes. We would like to further review and see how it goes in the next 3 months and then perhaps -- it's more from kind of a projection.
And the other part was regarding the investing in Kheda. So just wanted to clarify. So Kheda, what you're saying also on similar grounds, you're seeing good demand momentum. And the normal course with this demand could -- you would have liked to expect it as fast as possible, especially as you want to go with the clean room at current locations, more upstream products and all that. But because you have difficulty getting the CapEx executed, that's why it will be slow, and you will probably have this 1 bay ready? Or you're actually conserving because you see some order fall off?
No. See, let me just clarify. Kheda is not really just a short-term measure. So just because I'm having good demand right now, it's not going to be something which is driving me towards to do the work at Kheda. Kheda is expecting, even in the largest scheme of things, maybe on a longest span of 4 years or 5 years going forward, and that outlook doesn't change. It's only a short-term measure, where I -- in order to execute the project and raw materials, there are some practical issues which everybody is facing in getting the necessary permissions and the necessary manpower availability for executing the project. So to that extent, it is difficult. Of course, because of the uncertainties which are there, we would like to kind of move forward with a lot more confidence, past this COVID crisis has gone over.
Sure. But just to kind of play a bit of devil's advocate here. Say if you were to put Kheda into place with all the uncertainty, given that it is slightly ahead of the order execution, you would have to wait maybe a couple of quarters before it's good, right? It's not -- doesn't sound like it's going to be much more than that given you're already over pre-COVID utilization at the current location, right? So the question is...
So we are not really at the pre-COVID utilization. And at the same time, more than Kheda, what is -- right now, we are focusing is on the clean room, which happens at Odhav. That is something which will definitely commission in this year. That is something which is definitely going to be commissioned in this year. As far as Kheda is concerned, right now, the focus is really on execution. I mean that's something which is very important on us. So the work at Kheda will pan out to the extent the circumstances permit us. We are going to make effort, but at the same time, not able to really comment because in the past, whatever time that we've seen, in the last year, I mean we had monsoons which were extended. Right until December, we had showers, and we were not able to do the soil work, that we wanted to do there in Kheda. So that got extended. And then once we restarted it again, the COVID impact was there. And once again, we are in the monsoon period. So how much of that momentum we will be able to develop at Kheda is something which is -- but it does not change our plan or the intent to develop the plant in Kheda is something that is very much on the cards. And we are looking for opportunities, and we get a stable window, we will go ahead and do it.
[Operator Instructions] The next question is from the line of [ Shubham Agarwal ] from Equitas Consultants.
Sir, I just have one question left. I wanted to know if you have entered into any new technical tie-ups in the last quarter. And if you could also elaborate on the technology or assets that you are looking to acquire or any new product segment that you are looking to enter.
Yes. I'm very happy to actually share with you that we have -- if you remember, the last year, around the same time, we had entered into an agreement for a new technology. And I can now share with you that, that technology is called the EMbaffle technology, and we are entered with a Italian partner. If we are the sole licensees of that particular technology, it is for advanced kind of a heat exchanger. And we have been able to make a breakthrough in terms of bagging our first order based on the technology. And that happened in the month of March, the beginning of March. So from a refining major, we have been able to get that product. So that's something which is a very, very important breakthrough that we have been able to get. It proves, it kind of reinstates and reinforces our belief in the fact that going forward, we will have to keep reinventing the kind of product mix that we have, keep looking for equipment which are high technology-oriented and which are able to -- where we are able to kind of customize the solutions to our customers based on their specific requirements. At the same time, we have been able to begin our work of the power sector. For GE, we have been able to get our first order. And we have been -- we are going to execute that in the coming months. So that has been a breakthrough for us. Similarly, in terms of metallurgies, we have been able to add a couple of new kind of metallurgies in our product bouquet, something which is chromoly. We have been able to get those approvals for chromoly steels. For super duplex stainless steels, now we are amongst a handful of people who are approved in India for that kind of materials for Indian projects.So that journey, of course, it continues. And we will keep on enhancing the kind of approvals and the kind of capabilities that we have hand-in-hand going forward.
The next question is from the line of Dhwanil Desai from Turtle Capital.
Just one question. So I think you mentioned about -- you entered into new areas like LNG. So can you elaborate on the kind of products that we are making? Is it for the refrigeration cycle, heat exchangers that we are working on? Or it's like some smaller component of that?
It is actually high-pressure vessels that we are making.
It's a pressure vessel. It's not a heat exchanger that's used for...
No. It is pressure.
Okay. But are we -- do we -- I mean I understood from over the AGM that our aspiration is to move towards getting to that liquefaction cycle and the heat exchanges of that. So does that spend -- or do you think that there is some growth with...
That is very much the stance that we are committed towards. See, again, as far as we are concerned, with only the kind of capabilities that we have developed over the years, there find many kinds of applications across industry segments. So it's not just about LNG. LNG liquefaction, of course, it continues to remain there on our radar. And as far as our efforts goes, we are continuing in that direction. But of course, the kind of capabilities that we have, we will be able to do more severe kind of operating conditions, whether it is temperature, whether it is pressure. We will be able to make those kind of equipment, which are suitable for most severe of the applications. Because we need to understand that all these plants going forward, because of the environmental limits norms getting imposed, we will have to really evolve the way that they have configured their plants. And they will look to move towards more severe operating and design conditions, like pressure and operating temperatures, et cetera, which will involve usage of very, very high metallurgies and very different and high pressure kind of equipment. So we are gearing ourselves up, and we have been able to make a big breakthroughs on the kind of order bouquet that we have. It does contain those high-end equipment, the extreme high-end equipment.
But we can handle cryogenic, right? I mean is that capability already exist or is something that we need to...
We'll improve. The cryogenic is going to become a very close reality.
[Operator Instructions] We take last question from the line of [ Rani Jhaveri ] from JNJ Holdings.
Hello? Hello?
Yes, we can hear you. Go ahead, please.
Just can you throw some light on the working capital cycle going forward? Is there any deferment or pickup of the goods that's being manufactured? Or are the clients asking for some delay? If you can just throw some light on this aspect, please?
So Mr. [ Rani ], we are having a working capital turns of 2.5 as on the 1st of March '20. And we target our working capital turns of 3 by end of this fiscal. There has not been any increase where we are finding that there has been a delay on the pickup from the customers. As in fact, as Rishi have mentioned, we have been able to pre-prone our dispatches at 1 of our clients, where we were able to land up by getting bonus payments. So forgetting about postponement, there are cases of even preponement. So we think that we should be able to close the year with 3x of our working capital.
Well, thank you, everyone. And I think we can conclude the call.
Yes, sir.
Thank you. Thank you, everyone.
Thank you, everyone...
Thank you, everyone, for being on the call. Thank you.
Thank you very much. On behalf of the Anup Engineering Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.