Thermax eyes double-digit growth in FY15: Unnikrishanan

The stellar Q2 numbers posted by Thermax were mainly due to order intake going up by 42 percent in the quarter said MS Unnikrishnan, managing director, Thermax in an interview to CNBC-TV18's Latha Venkatesh and Sonia Shenoy. 

Looking at past trends he is confindent of a double-digit growth of around 10 percent for FY15.Q2 also saw an improved operational performance and some belt tightening activity, he said.For the first time the order intake came in more from outside India than domestic. However, he is upbeat on domestic growth going forward too. The current orderbook stands at over Rs 5000 crore and the carry forward orderbook at the group level is at over Rs 6000 crore.The company is seeing an upsurge in investment activities in Indonesia and African continent, said UnniKrishnan.

Thermax reported over two-fold jump in its net profit at Rs 86 crore for the quarter ended September 30, 2014. The company had posted a net profit of Rs 30.16 crore in the corresponding quarter of the last financial year.

Below is the transcript of MS Unnikrishnan's interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Latha: This is a very good growth in margins, 130 bps rise in margins and profits three times better than what you did year ago. Why was Q1 so under the weather and why is Q2 so much better? Is this that this is a lumpy business? So we should not expect this Q2 performance quarter after quarter?A: I don’t want to be commenting on whether it will be consistent here on but it is an improved performance. I would like to get a little more granular. The order intake has also gone up by around 42 percent. For the first time in the history of the company, a quarterly order intake is more from outside India than from India. We have been able to possibly garner more business from outside India knowing fully well things have not happened very well so far but will happen for the future.On the improvement in profitability, I cannot take the full credit for it because the previous year same numbers had approximately Rs 29 crore provision kept for certain settlement with the income tax for a one-time settlement. So if I were to offset that, still the profits are substantially better. This is an improvement in performance in operations and there is also a growth on the topline by 14 percent, which has helped us. So overall it is an improved performance.To answer your specific question, does it mean that we should be seeing positive ticks here afterwards, looking at the market scenario, I would believe that the full recovery is a little time away but there are signs and the green shoots visible that people will start concluding orders at least in the medium-term when I say couple of a quarters down the line.Sonia: The last time you had indicated that by the end of the year, by the end of FY15, you will see a revenue growth of 10 percent and margins will be stable. So I reckon around 10 percent or so. Would you still hold on to that guidance or would you change it?A: though it is not a guidance, I will stick to that. Looking at the first half, our topline has already grown by 7 percent. So in the second half, normally we are able to accrete the income. So looking at the past trends and if I were to project it for H2 also, double digit growth should be a practical number. We would certainly be struggling but we will try to sustain a double digit profitability also for the year-end.Latha: Where have the orders come from, which parts of the world and do those economies look like they can give you more in the rest of the year?A: One major project order is from the African continent for upcoming fairly large cement company and the India captive power plant which will be built by Thermax, which is more than Rs 300 crore. We have received another project order from Thailand for a captive power plant. It is limited to the boiler alone. We have had a fairly good intake of what is coming in from various parts of the world and even we have had couple of orders come from outside India. So it is not limited to one specific terrain but let me say south-east Asia and Africa predominantly in the current quarter. I see investments happening in the African continent, may not be very consistent to talk about the way we have in India. Similarly, there is an upsurge of activity visible in Indonesia and some of the other countries in the Southeast Asian continent. So I would expect that we should be able to continue to put in our efforts and focus there and get more orders going forward.