Thermax Q2 PAT seen down 17% to Rs 84 cr

Thermax's profit after tax is expected to go down by 17.3 percent year-on-year to Rs 84 crore in the quarter ended September 2012.

Net sales are seen going down by 9.4 percent to Rs 1,181 crore from Rs 1,303 crore during the same period.

Earnings before interest, tax, depreciation and amortisation (EBITDA) is likely to fall by 14.5 percent YoY to Rs 120 crore for the quarter.

EBITDA margin is expected to drop 60 basis points YoY to 10.2 percent.

Analysts say weak / muted ordering activity in the past two quarters will keep the topline growth under check. They expect some bit of pressure on the margins due to negative operating leverage on account of rising costs.

Execution of low margin orders is expected to add further pressure on the margins. Falling revenue and margin contraction are expected to result in YoY fall in PAT.

Order book

Analysts expect order inflows of Rs 1,120 crore for the quarter, down 5 percent compared to a year ago period.

Consolidated order book was down 26 percent YoY to Rs 5,040 crore in the June quarter.

Thermax derives more than 75 percent of its revenues from the energy segment. Analysts feel issues related to fuel (coal) and increasing competitive intensity (in the BTG space) are an overhang on order inflows and margins for the company in the long term.