In Q3FY2021, Thermax’s overall performance remained mixed where revenues remained muted along with strong operational performance led by cost rationalization and higher gross margins. However exceptional loss led to PAT decline. Weak order inflow, which was largely on expected lines, and lower execution during the same period led to lower depletion of the exit order backlog to 1.2x TTM consolidated revenue. Expect order booking in FY2021 to be lower compared to last year due to expectation of lower large ticket-size orders from segments such as steel, fertiliser, and cement; enquiry pipeline remains positive in food processing, steel, cement, chemical and pharma.
OutlookWe retain our Hold rating on Thermax with a revised PT of Rs. 1350.
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