Q1FY21 revenue declined by 52% YoY owing to slower execution due to Covid led lock down. Reported EBITDA loss of Rs11cr due to non-absorption of fixed overhead expenses along with lower volume of turnover. Order inflow declined by 52% YoY due to subdued inflows in...

Lockdown affects performance; Topline growth a challenge Thermax posted 1QFY21 consolidated revenue of Rs6.6bn, down 52% YoY and 12%/10% below our/consensus estimates due to disruption in business activities of Thermax and its customers amid COVID-19 lockdown. Energy/Environment/Chemical segment sales declined 57%/43%/14% YoY to Rs5bn/Rs839mn/Rs843mn, respectively. Gross margin rose 380bps YoY and 60bps QoQ to 49.7%, led by lower commodity costs and favourable sales mix (higher share of Chemical segment). Lower revenue led to EBITDA loss of Rs114mn (vs. our/consensus loss estimate of Rs518mn/Rs489mn). Thermax posted a net loss for the first time in the past two decades at...

Consolidated revenue came in at | 665 crore, down 52.2% YoY (vs. our estimate of | 716.4 crore) on the back of slower execution owing to covid19 lockdowns. Energy segment revenue (that contributes ~75% to revenue) fell 57% to | 500.4 crore YoY while environment segment revenue fell 43% to | 83.9 crore and chemical segment revenue was at | 84.3 crore, down 13.8%, YoY. It posted a loss of | 11.4 crore at the EBITDA level (vs. EBITDA of | 99.1 crore in Q1FY20), owing to higher employee expenses, other operating expenses and less booking of revenue. Consolidated loss after tax came in at | 15.3 crore (vs. PAT of | 62.8 crore in Q1FY20), partially impacted...

Order inflows are expected to remain challenged in medium term as industrial/private capex would be on hold mode. Though the real magnitude of outbreak and economy lockdown is difficult to assess, we believe near to medium term business outlook will remain challenging. Thermax's strong balance sheet and strict working capital management style would help survive current economic environment. The stock is currently trading at...

Weak order inflows may impact near term execution... Thermax Ltd (TMX) is a leading energy and environment solutions provider. They offer integrated innovative solutions in the areas of...

an opportunity of increasing its international deal win share especiallyinmarketslikeEurope,LATAM&Africa. We derive comfort from TMX's proven ability to emerge strongeraftereverydownturnduetostrongcashflowcontrol...

Thermax posted 4QFY20 consolidated revenue of Rs13.2bn, down 36% YoY and 11%/17% below our/consensus estimates, as COVID-19 lockdown led to loss of sales worth Rs4bn-Rs5bn due to disruption in business activities of Thermax and its customers. Energy/Environment/Chemical segment sales declined 39%/26%/6% YoY to Rs10.5bn/Rs2bn/Rs963mn, respectively. Gross margin rose to 49.1% in 4QFY20 vs. 39.5% YoY and 44.4% QoQ. EBITDA fell 63% YoY to Rs636mn, leading to EBITDA margin of 4.8%, down 340bps YoY, much below our/consensus estimate of 7.4%/6.8%. EBIT margin of Energy/Environment segments fell 490bps/340bps YoY to 3.1%/8.2%. EBIT margin of the Chemical segment was up 200bps YoY to 18.6%. PAT declined...

Consolidated revenue came in at | 1323 crore, down 36.2% YoY (vs. our estimate of | 1300 crore) on the back of slower execution owing to Covid-19 lockdowns. Energy segment revenue declined 38.2% to | 1051 crore YoY while environment segment revenue declined 25.6% to | 199.1 crore and chemical segment revenue came in at | 96.3 crore, down 6.1% YoY. Consolidated EBITDA came in at | 63.6 crore, down 62.8% YoY, owing to higher employee expenses and other operating expenses. Consequently, EBITDA margin declined 340 bps to 4.8% YoY. Consolidated PAT came in at...

Thermax's consolidated net revenue reported a sharp decline of 36.2% y-o-y in revenue for Q4FY2020 (lower than our estimates) at Rs. 1,323 crore due to impact of lockdown (loss of revenue of Rs. 400 crore-500 crore), wherein the decline in revenue was seen across segments. Operating profit margin (OPM) declined by 343 bps y-o-y, led by lower absorption of fixed costs on lower revenue. Hence, operating profit fell sharply by 63% y-o-y to Rs. 64 crore. Further, lower other income (-41% y-o-y to Rs. 30.7 crore) and higher depreciation (+25% y-o-y to Rs. 30.8 crore) impacted PBT (-70% y-o-y) and adjusted PAT declined by 70% y-o-y...

We cut our FY21/FY22E EPS estimates by 28%/12% due to lower order 4QFY20 revenues declined 36% to INR13.2b and were 23% below our expectation. of overall revenue) declined 6% YoY to INR1.0b. Order inflow declined 18% YoY to INR9.5b for the quarter. Order book stood TMX is witnessing inquiries and order conversions in end markets like pharma, chemicals, refineries, food and food processing. PAT CAGR of 6%/15%/35% over FY20-22E, factoring in lower losses from Danstoker as well as the low base of FY20 as TMX saw disproportionate impact of COVID- Order inflow during the quarter was lower at INR9.5b (-18% YoY). Book to bill stood lower at Energy INR35.6b, Environment INR16b, There have been no order cancellations as yet. Order book in FY21 will be lower YoY as orders from Steel, Cement and Fertilizer sectors is expected to remain muted.

Companies like Larsen & Toubro and KEC with exposure to the Middle East and North Africa (MENA) region are expected to get impacted by the recent more than 60% fall in crude oil prices to US$22/barrel. This is expected to impact overall orders/awarding from the MENA region. Companies like Elgi Equipments, AIA Engineering, Thermax, Engineers India and Kalpataru Power with exposure to international geographies like Europe, Middle East, China for sales or essential raw material may get impacted. However, lockdowns in India, UK, Europe and other geographies due to Covid-19 are...

Supply chain disruption due to restriction on various movements. Around | 250-300 crore material ready for dispatches is lying at Mumbai, Chennai Port impacting Danghote order delivery. Also, this is impacting order execution. The supply chain breakage occurring since 50-60%...

TMX reported a de-growth in revenue by 1.8% YoY in Q3FY20 due to muted execution in energy & environment segment. While EBITDA margin improved by 56bps YoY to 8% due to drop in other operating expenses & better product mix....

Revival in orders & margin expansion key to earnings growth ACCUMULATE Thermax posted 3QFY20 consolidated revenue of Rs14.1bn, down 2% YoY and marginally below our/consensus estimates of Rs14.5bn each. While Chemical segment sales grew 5% YoY to Rs1.2bn, Energy and Environment sales fell 1%/8% YoY to Rs11.2bn/Rs1.9bn, respectively. Gross margin was down 80bps YoY at 44.4%. EBITDA grew 5% YoY to Rs1.1bn, leading to EBITDA margin of 8%, up 50bps YoY, above our estimate of 7.6%. Operating margin was aided by the Chemical segment as its EBIT margin jumped 930bps YoY to 24.7%, owing to higher share of specialty chemicals. EBIT margin of the Energy segment was up 40bps YoY at 5.8%...

Increase in order inflows (+9% YoY) was mainly on account of a large FGD order received from Jharkhand. Order book stood at INR54.4b (-16% YoY). EBITDA growth of 5.4% YoY to INR1.1b was in line with our est. while EBITDA margin PBT declined 6% YoY to INR1.1b (7% miss) due to higher depreciation and lower other income. Order inflow increased 9% YoY to INR16b (due to INR4.3b FGD order in Jharkhand). We roll forward our valuation on Sep21E EPS to arrive at TP of INR1,200 (unchanged target multiple of 30x) Order inflow during the quarter stood at INR16.1b (+9% YoY), led by a large FGD Order backlog stands at INR54.4b (-16% YoY), providing revenue visibility of 0.8x its TTM revenue, lowest in the last 11 quarters. Current order backlog stands at INR54.4b (-16% YoY), providing revenue visibility of 0.8x its TTM revenue, the lowest in the last 11 quarters.

For Q3FY20, consolidated order inflows were at | 1606 crore, up 9% YoY (considering the base effect of | 431 crore FGD order) owing to muted capex in several sectors impacted order inflows in the energy and environment segment. Consolidated order inflows comprise energy segment (| 799 crore), environment segment (| 162 crore ex-FGD) and chemicals segment (| 260 crore). Q3FY20 order inflows were dragged by decline in international inflows (| 266crore) while domestic order intake was up YoY (| 1266 crore). The consolidated order book was at | 5440 crore, down 16% YoY, a bit of a...

Thermax posted 2QFY20 consolidated revenue of Rs16.1bn, up 13% YoY and above our/consensus estimates of Rs15bn each. The topline was driven by the Energy segment, up 17% YoY at Rs13.4bn (82% of total sales), led by robust execution in the Dangote project (sales of Rs3.5bn-Rs3.8bn booked in 2QFY20). Gross margin remained flat YoY at 45.5%. EBITDA was up 18% YoY at Rs1.3bn, leading to an operating margin of 8.1%, up 40bps YoY. The margin was above our/consensus estimates of 7.6% each. Thermax has written down deferred tax assets worth Rs675mn as it has opted to shift to the new tax regime. This led to higher tax at Rs947mn (79% tax rate). Consequently, PAT fell 66% YoY to Rs257mn (our/consensus PAT estimate was...

Thermax posted 2QFY20 consolidated revenue of Rs16.1bn, up 13% YoY and above our/consensus estimates of Rs15bn each. The topline was driven by the Energy segment, up 17% YoY at Rs13.4bn (82% of total sales), led by robust execution in the Dangote project (sales of Rs3.5bn-Rs3.8bn booked in 2QFY20). Gross margin remained flat YoY at 45.5%. EBITDA was up 18% YoY at Rs1.3bn, leading to an operating margin of 8.1%, up 40bps YoY. The margin was above our/consensus estimates of 7.6% each. Thermax has written down deferred tax assets worth Rs675mn as it has opted to shift to the new tax regime. This led to higher tax at Rs947mn (79% tax rate). Consequently, PAT fell 66% YoY to Rs257mn (our/consensus PAT estimate was...

Consolidated net revenue grew by 12% y-o-y led by a 17% y-o-y rise in execution in the energy segment while the environment segment revenue declined by 11% y-o-y. Chemical segment revenue growth remained muted. Operating profit margin (OPM) expanded by 41 bps y-o-y on account of lower employee costs. Hence, operating profit grew by 19% y-o-y to Rs. 130 crore. Further reversal of deferred tax assets worth Rs. 70 crore (opting for lower corporate tax rate) and lower other income dragged down net profit by 66%. Order inflows...

For Q2FY20, consolidated order inflows came in at | 1723 crore, up 28% YoY (considering the base effect of | 471 crore FGD order) owing to muted capex in several sectors impacted order inflows in energy and environment segment. Consolidated order inflows comprise energy segment (| 980 crore), environment segment (| 162 crore ex-FGD) and chemicals segment (| 109 crore). Q2FY20 order inflows were dragged by a decline in international inflows (| 374 crore) while domestic order intake was up YoY (| 1349 crore). The consolidated order book was at | 5334 crore, down...