Hold Thermax; target of Rs 830: ICICI Direct

ICICI Direct recommended hold rating on Thermax with a target price of Rs 830 in its research report dated June 20, 2020.

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June 22, 2020 / 07:57 IST

26 Aug, 2025 12:21

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ICICI Direct's research report on Thermax

Consolidated revenue came in at Rs 1323 crore, down 36.2% YoY (vs. our estimate of Rs 1300 crore) on the back of slower execution owing to Covid-19 lockdowns. Energy segment revenue declined 38.2% to Rs 1051 crore YoY while environment segment revenue declined 25.6% to Rs 199.1 crore and chemical segment revenue came in at Rs 96.3 crore, down 6.1% YoY. Consolidated EBITDA came in at Rs 63.6 crore, down 62.8% YoY, owing to higher employee expenses and other operating expenses. Consequently, EBITDA margin declined 340 bps to 4.8% YoY. Consolidated PAT came in at Rs 39 crore, declining 69.2% YoY, impacted by 24.7% YoY increase in depreciation and higher effective tax rate.

Outlook

We expect adjusted revenue, EBITDA CAGR of 1.6%, 2.5%, respectively, in FY20-22E. Consequently, margins are expected to improve in long term on the back of easing commodity pressure and product innovations in medium term. We revise our target price to Rs 830 (30x on FY22E EPS) and revise our rating from BUY to HOLD.