Sell Thermax; target of Rs 3,100: ICICI Securities

ICICI Securities's research report on Thermax

Thermax (TMX)’s 4QFY25 performance reflected improved execution while order inflows remained weak. Its 4QFY25 revenue/EBITDA/PAT grew 11.6%/10%/5% YoY. Revenue and EBITDA growth was slightly better than estimates, while a higher-than-expected tax rate resulted in a miss at the PAT level. The industrial product division continued to outshine other divisions, while the industrial infra, and green solutions division remained hit by higher costs of low-margin legacy projects in FGD, Bio-CNG, and Sulphur recovery areas.

Outlook
Ordering remained adversely impacted by delays in inquiry finalizations, while the pipeline remained strong. We believe that lower ordering and continued cost pressures from legacy projects will have an impact on execution and profit growth for the company. We trim our estimates by 5% each for FY26/FY27. We reiterate our Sell rating with a TP of INR 3,100, based on core business valuation at 40x Mar’27E EPS and the addition of subsidiary valuations.

For all recommendations report, click here