ICICI Direct is bullish on Thermax has recommended buy rating on the stock with a target price of Rs 1170 in its research report dated May 24, 2019.
ICICI Direct's research report on Thermax
Thermax reported standalone revenues at Rs 1889.6 crore registering robust growth of 44.2% YoY (on a proforma basis) while consolidated revenues grew 43.7% to Rs 2073.7 crore on a YoY basis. EBITDA came in at Rs 175.7 crore, up 17.2% YoY (vs. our estimate of Rs 176.1 crore) while EBIDTA margins declined 215 bps to 9.3% on a YoY basis owing to more than expected increase in total operating expenses. PAT came in at Rs 112.9 crore, which grew 31.7% YoY while adjusted PAT grew 55.7% to Rs 133.5 crore. The consolidated order inflow for the quarter was at Rs 1157 crore (Rs 1599 crore in Q4FY18) on a YoY basis due to ongoing sluggishness in new investments in several sectors while standalone order inflow was at Rs 717 crore. Consolidated order book was at Rs 5370 crore, down 6.0% YoY.
With expected uptick in domestic order inflows and recovery in international order inflows through geographic diversification, order backlog is expected to improve further. Thermax may continue growth momentum on revenue front with expected CAGR of 10.3% in FY19-21E. Consequently, with expected margin recovery in medium term and normalization of tax rate, PAT is expected to grow at a CAGR of 21.6% over FY19-21E. We continue to maintain our BUY rating with a revised target price of Rs 1170/share.
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