Accumulate Thermax; target of Rs 645: PLilladher
Prabhudas Lilladher is bullish on Thermax and has recommended an accumulate rating on the stock with a target of Rs 645, in its May 23, 2013 research report.
June 08, 2013 / 16:29 IST
Prabhudas Lilladher's research report on Thermax (TMX)
"Thermax (TMX) reported sales de-growth of 13 percent YoY to Rs14.6bn (PLe: Rs12.7bn). The faster-than-expected execution in the energy segment led to better sales for the company. EBITDA margins came in at 11.4 percent (PLe: 10.4 percent), up 40bps YoY and 70bps QoQ. Lower RM percent sale by 110bps helped improve margins. TMX attributed improvement in margins to lower commodity prices and benefits of cost reduction measures it has been taking. PAT was down 11 percent YoY to Rs1.1bn (PLe: Rs942m).""TMX surprised the street with order inflow of Rs48bn on a standalone basis and Rs56bn on a consolidated basis (up ~20 percent YoY) in a difficult environment. Export orders were up 56 percent and domestic orders were up 12 percent in FY13. For the quarter, order inflow was up 42 percent YoY on a standalone basis to Rs11.5bn (up 40 percent YoY). In Q4FY13, orders from international markets contributed largely to inflows. TMX highlighted that most of the enquiries are from small/medium sized projects from sectors like Food processing, Pharma, Healthcare etc., while enquiries for large size plant/projects are limited. It also highlighted that overall enquiry levels are lower at the beginning of FY14 than they were in FY13 in domestic markets. However, export markets are better in terms of enquiries, especially South East Asia, Middle East and Africa, where the enquiries are quite encouraging. TMX expects to grow order inflow by double digits in FY14 and will try to retain double-digit margins.""Outlook & Valuation: TMX's ability to bag base orders of ~Rs7-8bn per quarter, increasing market share and strong management pedigree gives us confidence that it will be able to tide the slowdown and participate in the upturn of the cycle meaningfully and continues to surprise positively in terms of order flow. We believe TMX will continue to benefit from continued power shortage and strong product portfolio. The stock is trading at 19x FY14E earnings. We continue to maintain 'Accumulate' on the stock with a target price of Rs 645," says Prabhudas Lilladher research report.Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. 
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