Hold Thermax; target of Rs 815: Sharekhan

Sharekhan's research report on Thermax

In Q4FY2020, Thermax’s performance remained weak due to COVID-led shutdown impacting margins and net profit. Weak order inflow, which was largely on expected lines, and lower execution during the same period helped in lower depletion of the exit order backlog to 0.9x FY2020 consolidated revenue. Management expects order booking in FY2021 to be lower compared to last year due to expectation of lower large ticket-size orders from segments such as steel, fertiliser, and cement; enquiry pipeline remains positive in food processing, FMCG, and pharma.

Outlook

We retain our Hold rating on Thermax with a revised PT of Rs. 815, factoring lower order booking and challenges pertaining to uncertainties related to execution and production.

Thermax 20062020-khan

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