Thermax Ltd. share price target

in key domestic end markets. Revenue in the energy/environment segments fell 9%/13% yoy. EBITDA was almost 7% below our estimate margins in energy were down 10.3% ( 120bps yoy), but up marginally for the environment segment at 7.7% (+40bps yoy). The...

Karvy downgrades Thermax to HOLD from earlier BUY with a revised price target of Rs.896. We are scaling down our FY16E and FY17E on account of weak order inflows and shrinking revenue visibility necessitates for downward revision of estimates by 6.6%/12.2% leading to Revenue, EBITDA and PAT to Rs.52,651mn/4,540mn/2,681mn and Rs.55,641mn/4,820mn/2,875mn for FY16E nd FY17E leaving book-to-bill ratio below 1x during FY16E-17E. We value Thermax at 36xFY17E EPS (+1 SD of FY05-15 mean P/E) and by adding 1.5x book value of investments in JV transpiring to a target rice of Rs.896 with an upside potential of 5%.

Thermax's Q1FY16 results were just in line with our and consensus estimates at the operatingleveldespitestrongexecutionintheEnergydivision;thiswasmainlybecauseof lowerthanexpectedmargins.Managementreiteratedthatorderingactivitywillcontinueto...

Karvy initiates coverage on Thermax Ltd with a Buy Rating. Order book and revenues to grow at CAGR of 7% and 8.4% during FY15-17E. Boilers and Power EPC & services segment to contribute to over 60% and 20% of revenues by FY17E in the standalone business. Exports business to contribute 35% by FY17E and is setting manufacturing hub in Indonesia for operationalization by FY18. Going forward operating subsidiaries to become potential value creator in economic up cycle. Thermax - First Energy, synergistic effect to play out in long term. We initiate coverage on Thermax with a Buy' rating for a target of Rs.1,239 representing an upside potential of 16% based on standalone FY17E EPS of Rs.33.9 at 33.6x P/E (+1 SD on 1yr forward P/E during FY05-15) and added Book Value (BV) of investments in subsidiaries of Rs.41/share at 1x BV, subsidiaries could incur losses during FY16-17E.

Thermax reported below estimate operational results with EBITDA coming in at Rs 1.3bn (est. Rs 1.6bn). Miss was driven by lower than expected revenue growth and margins. PAT was in line but was aided by other income.

Thermax reported below estimate 3QFY15 PAT of Rs 762mn driven by lower than estimated other income. Operationally, results were in line. Order inflow of Rs 12.3bn (-10% YoY) was also in line with estimates.