Thermax Ltd. share price target

Thermax reported strong beat across all key parameters in Q4FY17. Revenues were higher than estimates on better execution while the EBITDA margin was driven by the former and lower input costs. However, one offs marred profitability Revenues came in at | 1342.8 crore, down 3.8% (I-direct estimate: | 1156.8 crore). For FY17, revenues fell 13.1% YoY to | 3973 crore vs. | 4573 crore in FY16. Order backlog was at | 3618 crore, lower than FY16 backlog of | 3747 crore. Energy segment revenues were at...

The outlook fails to impress: The proverbial systemic delays continue to plague. Be it (a) contractual delivery delays; and (b) slow-moving projects, conventional quarters of mainstream capex are yet to show the signs. The order book, thereby, is down by 14% YoY at Rs39.6 bn. We expect the inflows to be no greater than high single digits. Also, we are concerned on International orders. After all, the nature of international ordersfrom execution to margins has always negatively surprised us. We continue to believe TMX will be beneficiary from compact linear Fresnel reflector in domestic market. Further, we expect South Asian geography to contribute more towards the base orders. Yet, in the grander scheme of things, they don't...

Thermaxs (TMX) 4QFY17 result came in below our estimates. Growth in the Environment segment ( 18% YoY) was compensated by decline in the Energy segment (-3%), resulting in flat revenues in 4QFY17. Stiff cost control measures resulted in EBITDA margins improving ~280bps YoY to 11.6%.

Q3FY17 order inflow at Rs 11.9 bn (up19% YoY) beat consensus/our estimates,driven by higher export orders (up 74%) though domestic orders (down 5%) remained subdued.

ICICI Securities Ltd | Retail Equity Research Thermax reported a lower-than expected performance in Q3FY17. The key miss came in on the revenues front while margins were ahead of estimates. The key silver lining was a decent order inflow in Q3FY17, which led to a flattish order backlog QoQ Revenues came in at | 813 crore vs. our estimate of | 1025.8 crore. The miss was on account of slower execution on a lower order backlog. Energy segment revenues were at | 583 crore, down 30.3%...

Even after penciling in near term orders from cement, waste heat recovery, and middle-east, the energy/environment segment will not qualify for around, we fear. Further, higher exposure to international orders poses a risk. From margins to pace of execution, there are multiple variables that could adversely impact. We maintain REDUCE....

Thermaxs (TMX) 3QFY17 result was below our estimates. The company continues to report a decline in revenues (-20% YoY for 3QFY17) on the back of a muted order book. 3QFY17 also saw the impact of demonetisation, in the absence of which revenues would have been higher by 4-5%. Surprisingly, gross margins improved 730bps YoY (better mix) which led to EBITDA margins of 9% ( 210bps YoY).

ICICI Securities Ltd | Retail Equity Research Thermax reported a weak set of Q2FY17 results where revenues and EBITDA were below estimates. However, higher share of other income led PAT to come in line with estimates Reported revenue fell 17.6% YoY to ~| 870.8 crore (vs. I-direct estimate: | 973.3 crore). Revenue miss may be largely due to lower carry of order backlog of previous years. In terms of segmental performance, energy segment revenue fell 22.2% YoY to | 652 crore...

Thermax reported a decline in revenue (-13% YoY) and EBITDA (-17% YoY) was on expected lines as it began FY17E with a muted order book. Led by higher other income ( 48% YoY) and profits in B&W JV, PAT decline was restricted to 5% YoY (Rs 708mn). Large order finalisations continue to be elusive leading to a sequentially flattish order book of Rs 45.8bn.

Top takeaways from 1QFY17: Thermax’s 1QFY17 standalone earnings (Rs 452mn; ?10% yoy) were materially below our and consensus estimates. The company disappointed on all metrics.Order inflow declined 19% yoy to Rs 8.2bn on weak domestic end markets coupled with certain deferrals in the international market, which should flow through in 2Q. Management highlighted that the outlook on large domestic orders from key sectors such as metals, power and cement continues to be weak over the next 12 months but expects ordering in the hydrocarbon sector to pick up pace in FY18. Current orders are driven by noncore sectors such as food processing and paint.Phillip Capital maintain Sell rating with a target price of Rs 700 (Rs 615 earlier), as the current stock valuations at 33x FY18 PE look expensive considering a modest 10% CAGR in FY16?18 earnings and RoE’s of 11?12%.