Accumulate Thermax; target Rs 648: P Lilladher
Prabhudas Lilladher is bullish on Thermax and has recommended accumulate rating on the stock with a target price of Rs 648 in its February 01, 2013 research report.
February 06, 2013 / 11:51 IST
Prabhudas Lilladher is bullish on Thermax and has recommended accumulate rating on the stock with a target price of Rs 648 in its February 01, 2013 research report.
"Thermax, sales for the company were lower-than-expected at 17% YoY to Rs10.4bn due to slower execution on account of liquidity constraints resulting in slower off take by clients. Energy segment saw de-growth of 19% YoY and environment segment saw de-growth of 13% YoY. EBITDA margin for the quarter remained flat YoY at 10.7%. The company was able to maintain margin YoY and improve by 50bps QoQ due to various cost-control initiatives (limited intake of man power, lower factory expense, lower material cost etc). Adj. PAT was down 20% YoY to Rs764m.The company reported order inflow of Rs12.8bn (up more than 100% YoY). For the quarter, mining & metal contributed 49% of inflow, cement 10%, food processing 8%, textile 4 % and others 29%. Order book for the standalone entity stood at Rs46.4bn (down 9% YoY) and that of consolidated entity stood at Rs51.9bn (down 10% YoY). For FY14, the company expects sectors like Cement and Oil&Gas, domestic steel companies (Tata steel, JSW, Bhushan steel etc.) to start ordering and contributing to order inflows. TMX also believes that a huge demand for power and persistent shortage being faced in many states will compel the revival of captive power generation led by medium power consuming sectors like Tyres, Textiles, Chemicals and Pharma. In the international markets, it continues to be positive on African markets. It also expects order finalization to pick up in the Middle East market in the second half of FY14. It expects to grow order inflow in FY14 even on a strong base of FY13.Outlook and Valuation: The stock is trading at 17.9X FY14E earnings.. We expect the company to maintain strong run rate of order inflow, given its ability to grow base business orders and strong outlook on captive power market. We maintain 'Accumulate' rating on the stock with a target price of Rs 648," says Prabhudas LilladherBodies Corporate holding more than 50% in Indian cos 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.To read the full report click on the attachment 
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