Buy Thermax; target of Rs 770: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal is bullish on Thermax and has recommended buy rating on the stock with a target of Rs 770 in its February 2, 2013 research report.
 
“Thermax, Revenue declined 17% to INR10.5b, against our estimate of INR11.6b. EBITDA declined 18% to INR1.1b, in line with estimate, led by better than expected margins. Standalone PAT declined 20% YoY to INR764m, against our estimate of INR784m. Surprisingly, EBITDA margin at 10.7% (flat YoY) was significantly higher than our estimate of 9.9%, which is commendable, particularly in light of the poor fixed cost absorption.”
 
“Order intake during 3QFY13 was INR12.8b, up 118% (against a low base of 3QFY12), and was marginally better than expected. 3QFY13 saw a large order worth INR5b for a captive power plant from NMDC. Subsidiaries reported a net loss of just INR7m in 3QFY13, lower than INR147m in 1Q / INR37m in 2QFY13. The subsidiaries' losses pertain to cost overruns in Meenakhshi project, losses in Chinese subsidiaries, etc, and have largely stabilized now. There are signs of improvement in order intake, given the expected finalizations in segments like Oil & Gas, Steel, Captive Power Plants, Cement, etc. Exports (overseas business) have been identified as an important focus area, with the management targeting 33% revenue from overseas (up from 25% in FY12).”
 
“We have recently upgraded our recommendation on TMX to Buy, and expect acceleration in revenue growth, driven by improvement in GFCF (particularly in base industries) and interplay of several structural trends. TMX's revenue has been largely stagnant over FY11-13, impacted by macroeconomic volatility. Maintain Buy with a target price of INR770 (18x FY15E EPS),” says Motilal Oswal research report.

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