Moneycontrol
Feb 14, 2017 06:24 PM IST | Source: Moneycontrol.com

Sell Thermax; target of Rs 781: Motilal Oswal

Motilal Oswal is bearish on Thermax has recommended sell rating on the stock with a target price of Rs 781 in its research report dated February 09, 2017.

Sell Thermax; target of Rs 781: Motilal Oswal


Motilal Oswal's research report on Thermax


Thermax’s (TMX) operating performance in 3QFY17 was below expectations. Sales declined 21% YoY to INR8.1b (est. of INR 9.7b), EBITDA was flat YoY at INR 806m (est. of INR 902m), EBITDA margin expanded 210bp YoY to 9.9% (est. of 9.3%) and net profit declined 11% YoY to INR 566m (est. of INR 614m).


Outlook


We marginally cut EPS for FY17E/18E by 3/2% to factor in prevailing weak ordering activity and muted outlook in terms of a pickup in ordering activity from the core sectors. We maintain Sell and roll over our TP to FY19 at INR 781 (25x FY19E EPS of INR 31, based on last 10-year average P/E multiple), given weak business outlook and rich valuations.

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