Motilal Oswal's research report on Thermax
- SE Asia and Middle East accounted for largest share in export business; while TMX continued to make inroads in African market. Improved order intake is reflected in the case of Danstoker, as well.
- Key strategies to combat cyclical nature of project business: capturing the revenue spend of customers, growing standard products, selective internationalisation and development of new businesses and product portfolios.
- Investments made in product development have led to 11 new product lines commericalised in the last three years.
Valuation and View: "We believe TMX is uniquely positioned to benefit from the current trends, which will enable it to make a transition to the 'Big League' in the next economic upturn. We expect acceleration in TMX's revenue growth, driven by improvement in GFCF (particularly in base industries) and interplay of several structural trends. TMX to report earnings CAGR of 12 percent over FY13-15. The stock quotes at 23x FY14E and 17x FY15E EPS. We Maintain Buy, with price target of INR700 (upside of 18 percent)," says Motilal Oswal research eport.
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