Hold Thermax; target of Rs 5200: Sharekhan

Sharekhan's research report on Thermax

Company reported Revenue/operating profit/Adj. PAT of Rs. 2,764/273/190 crore, a growth of 19.6%/36.6%/22% y-o-y respectively. Industrial products/Industrial infrastructure/Green Solutions segments posted a good growth of 23%/17%/72% y-o-y, while the chemicals segment had a de-growth of 8% y-o-y. PBIT margins improved in Industrial products and Green solutions and remained stable in Industrial Infra and Green solutions. Order inflow for the quarter was weak at Rs. 2,309 crore (+2% y-o-y). There was an absence of large order inflow. Company hopes to see it pickup in 1HFY25. The outstanding orderbook is also soft currently at Rs. 10,111 crore (+4% y-o-y).

Outlook

With weak orderbook visibility and premium multiples, we maintain our Hold rating on the stock. The future growth prospects related to company’s investments in green energy are already factored in the stock price. The stock is currently trading at ~76x/63x its FY2025E and FY2026E EPS.

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