Thermax Q1 net down 25% on low margin orders, weak rupee

Moneycontrol Bureau

Capital goods maker Thermax has reported around 25 percent year-on-year decline in profit during June quarter to Rs 50.2 crore as high margin orders were hard to come by.

Total income also shrunk over 10 percent to Rs 863 crore as demand from sectors like power in domestic market remained weak. The firm is looking to grow its international business to offset risks from its domestic business, which is under pressure due to a general slowdown.

Thermax has earlier stated that it will offset the impact of the cyclical nature of its business under which selective internationalisation is critical to ensure growth.

The Pune-based company said its operatig margins de-grew marginally to 9.4 percent versus 9.8 percent. Other income also slid 56 percent to Rs 8.1 crore. 

Shares of the company dropped marginally to Rs 588.55 post numbers announcement.

Meanwhile, in a recent interview with CNBC-TV18, MS Unnikrishnan, MD, Thermax had said that  large orders are not being awarded currentl and that it is tough for companies to pass on price hikes to consumers with the rupee fall. Even though margins may be under pressure due to high costs of raw materials such as steel, aluminium and copper, the capital goods major will aim to keep them in double-digits.he had said.  

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