Thermax Ltd. share price target

Energy segment performance supports margin improvement: Operating margin improved 40bp to 7.1%, supported by margin improvement in the energy segment. Margins in the Energy segment improved 90bp YoY to 6.0%. However, margins in the Environment and Chemical segment were under pressure. Environment margins slipped 100bp YoY to 2.1% and Chemical margins declined 50bp YoY to 11.7%. Order inflow declines sharply, but outlook for standard business stable: Order inflow declined 26% YoY to INR12.2b due to absence of large-ticket...

Thermax reported consolidated net revenue growth of 35% y-o-y due to a strong execution in its Energy division (up 45% y-o-y) which was above our estimates. Chemical and environment divisions remained muted. Despite strong execution, gross margins (down 418 bps) remained under pressure while OPM improved marginally (in line with expectation) led by lower employee and other expense (as a % of sales). Net Profit growth was supported by lower ETR despite higher interest, depreciation and lowers other income. Weak order intake over trailing two quarter...

Thermax Delivers Robust Q4: Thermax earnings was well above our and street estimates at Rs. 11.27. This wasprimarily driven by topline growth of 44% YoY to Rs. 20.7 Bn.

Strong order book, order inflows; key to revenue growth For Q4FY19, consolidated order inflows were at | 1157 crore, down 28% YoY owing to muted capex in several sectors. For FY19, order inflows comprise energy segment (| 4476 crore), environment segment (| 741 crore) & chemicals segment (| 415 crore). For FY19, order inflows were dragged by a decline of 28% in international inflows while domestic order intake was up 1% YoY. Order book was at | 5370 crore, down 6.0% YoY. We estimate order inflows of | 5850 crore, | 6480 crore for FY20E, FY21E,...

market is expected to see tendering from 2Q/3Q FY20 onwards. Sectors which are expected to witness ordering are Cement, Water recycling, Chemical, Textile, Agro Pharma etc. The company is positive on FGD and is L1 in couple of large orders which are expected to be received in FY20. On the international front, TMX sounded positive due to expected increase in demand in USA, Indonesia and Middle East. The execution of low margin order by Danstoker may continue in Q1FY20, however impact would be negligible in FY20. We expect TMX to report sales/PAT CAGR of 7%/15% over...

Operating performance ahead of expectations: Sales grew 44% YoY to INR20.7b in 4QFY19. EBIDTA increased 24% YoY to INR1.7b, as margin contracted 140bp YoY to 8.2%. Adj. PAT grew 64% YoY to INR1.2b, ahead of our estimate of INR979m, supported by a lower tax rate at 36%. Revenue growth to moderate due to lower opening order book: Weak order inflow (-12% for FY19) and healthy execution (+34% YoY) have led to a decline in order backlog (-6% YoY to INR53.7b). Thus, we believe revenue growth will moderate in FY20 (+7.7% YoY). However, with ordering activity showing signs...

Q3FY19 sales grew by 29% YoY due to strong execution in energy (30% YoY) and environment (23% YoY) segment . However, EBITDA margin declined by 108bps YoY to 7.5% due to rise in commodity prices and other expenses . Subdued growth in order inflow (5% YoY) due to tepid order conversion in core energy and environment segment . Adj. PAT increased by 11% YoY supported by higher other income (31% YoY) and lower tax . Core sector order inflow stand muted while rise in commodity prices is likely to impact operational margins in coming quarters. We maintain our Hold rating and value TMX at a P/E of...

For Q3FY19, consolidated order inflows came in flat at | 1480 crore (vs. | 1413 crore in Q3FY18) owing to muted capex in several sectors. Order inflows comprise energy segment (| 1153 crore), environment segment (| 212 crore) and chemicals segment (| 114 crore). The order book was at | 6475 crore, up 16.5% YoY. We estimate order inflows of | 5764 crore and | 6548 crore for FY19E and FY20E, respectively. We expect the order backlog at | 6331 crore at the end of FY20E. Going ahead, Thermax expects enquiries and order intakes in cement...

11 February 2019 Sales grew 29% YoY to INR14.4b (v/s our est. Gross margin shrank 220bp YoY to 45.2%. EBIDTA increased 12.4% YoY to INR1.1b (below our est. of INR1.2b), with margin contracting 110bp YoY to 7.5%. Adjusted net profit grew 11% YoY to INR652m (Adjusted for (a) INR0.9b of deferred tax for TBW recognized during the quarter, and (b) INR875m write-down for goodwill impairment in its Netherland subsidiary (our est.

Thermax reported a mixed Q2FY19 with standalone revenue at | 1188.4 crore registering robust growth of 37.6% (higher than our estimate of | 993 crore). The consolidated order inflow was almost flat at | 1344 crore, on a YoY basis EBITDA came in at | 83.6 crore, down 2.9% YoY (much below our estimate of | 99.3 crore), owning to a sharp increase in raw material expenses and other operating expenses, which increased 45.3% and 49.8% to | 706.4 crore and | 266.3 crore, respectively. Consequently,...