Thermax Ltd. share price target

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....

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...

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...

PAT declined 62.3% to revenue/EBITDA/PBT increased 22%/28%/8% YoY, while Adj. PAT Energy segment grew 17% YoY to INR13.4b, supported by healthy execution. Environmental segment revenue declined 11% YoY to INR1.5b with EBIT margins at 4.7% (+190bp YoY). Chemical segment revenues came in at INR1.1b (+6% YoY) with EBIT margins at 17.9% (+290bp YoY). However, on account of strong execution depicted over the past six quarters, dependency on new order wins is even higher. TMX is focused on revenue growth, but wont do it at the cost of margins or at the risk of working Margin improvement in current market condition looks difficult, more so in the project business since competition is very aggressive. Over the past few quarters, Thermax has demonstrated its strong execution capability with robust revenue growth. Over the past few quarters, Thermax has demonstrated its strong execution capability with robust revenue growth.

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...

TMX reported a robust Q1FY20 revenue growth of 35% YoY aided by strong execution in energy segment (45% YoY). While EBITDA margin improved by 42bps YoY to 7.1% due to drop in employee cost and other expenses . Improved operating margin and lower tax rate of 30% (vs 36% Q1FY19) increased earnings by 28% YoY. But order book de-grew by 18% YoY (OB to sales at 0.8x TTM...

Thermax Q1 earning came in higher than our estimates on account of better execution and deferred tax asset on account of TBW consolidation.

Thermax reported standalone revenue of | 1167.7 crore, registering robust growth of 37.5% YoY (on a proforma basis, including B&H; business), while consolidated revenue grew 34% to | 1392 crore YoY predominantly led by 45% growth in domestic and 9-10% growth in the international business. Proforma EBITDA came in at | 71.2 crore, up 21.4% YoY (vs. our estimate of | 68.9 crore) while the EBIDTA margin declined 80 bps owing to a morethan-expected increase in total operating expenses. PAT came in at | 49.9 crore, up 11.1% YoY. The consolidated order inflow for the quarter was at | 1217 crore (| 1652 crore in Q1FY19), down 26% YoY due to ongoing...