Thermax Ltd. share price target

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,...

Thermax Cautious on Near-term Outlook: Thermax Q2 revenue grew by 38% YoY and earning grew by 31% YoY. Earningsfor Q2 were higher than our estimate by ~ 13% primarily on surprise from higher treasury income, adjusted for the same earnings were in-line with our estimates.

Thermax Q1 In-line with Estimates: Thermax's consolidated revenue grew by 19% to Rs. 10.3 bn and EPS reached Rs. 3.8 in Q1 which is in-line with our estimates for Q1. The revenue growth came in on account of pickup in execution of projects and traction for standard products in the standalone business.

The subsidiary performance was a cause for concern with Danstoker A/S Denmark continues to report losses for the quarter due to cost overrun in some orders. Thermax' European operations underperformed with...

9 August 2018 improved 18.7% YoY to INR10.4b (est. Despite strong growth in revenue, EBIDTA of INR693m (-3.9% YoY) was meaningfully below our estimate of INR1.0b on account of a weak performance of subsidiaries. Net profit increased 21% YoY to INR0.5b (est. of INR0.6b), supported by higher other income (INR310m v/s INR241m in 1QFY18) and share of profits from JV/associates (profit of INR3m v/s a loss of INR67m in 1QFY18). TMXs revenue rose 19% YoY to INR8.5b, led by a weak base of 1QFY18 (INR800m sales loss on account of GST-led ambiguity, and impact to the tune of INR350m on exports revenue as the JNPT port was infected by malware).

After 3 consecutive years of contraction, Thermax (TMX) reported a sharp jump in order inflows (up 45% YoY) in FY18, but management guides for a cautiously optimistic outlook amid rising interest rates and the run up to the 2019 elections. Key takeaways from TMX's FY18 annual report are: a) a cautious outlook on order inflows, to be driven largely by 2 sectors: consumer-led industries (food, beverage, textiles, tyres and automobiles) and emission norm-related capex (power and oil & gas); b) expanding its manufacturing footprint through new facilities in Indonesia, Dahej and the acquisition of assets in Poland to counter cyclicality in sales; c) margin decline being restricted to 70bps in FY18 as projects' improved...

Over the past five years, Thermax has witnessed drying up of large orders from the core sectors (Power, Steel, Cement and Refining), leading to volatility in its sales. Thermax is primarily in absorption chillers. 2. Thermax is the market leader in the B2B segment but has <1% share in the commercial segment. It targets a double-digit market share in the commercial segment. 3. Rooftop solar (INR10b industry) is an emerging market and Thermax would be present in the industrial and commercial segments. Thermax intends to expand footprint and achieve double-digit profit in this segment. Enquiry pipeline for standard products (INR4b-6b quarterly) has improved in FY19 it is more widely spread across the end markets of tyres, auto components, F&B;, segment, there are a few projects in the pipeline, with orders likely to be placed in FY19. a few captive power plant orders are in the pipeline along with WHRG.

Thermax Ltd (TMX) is a leading energy and environment solutions provider. They offer integrated innovative solutions in the areas of heating, cooling, power, water & waste management, air pollution control and chemicals . Order book grew by 47% YoY to Rs5,302cr (1.4x TTM revenue) supported by 44% rise in order inflow. Q4FY18 sales & PAT declined by 2.4% & 5% YoY (below estimate), due to slower execution in environment & chemical business...