Geojit's research report on Thermax
Thermax Ltd (TMX) is a leading energy and environment solutions provider. They offer integrated innovative solutions in the areas of heating, cooling, power, water & waste management, air pollution control and chemicals. TMX reported a robust revenue growth of 57% YoY during the quarter, led by strong execution in Energy (61% YoY) and Environment (62% YoY), while the Chemical segment grew by 22% YoY. However, due to higher commodity prices and the execution of legacy FGD order in Environment segment, EBITDA margin fell by 19bps YoY to 5.8%. Q1FY23 order book grew by 56% YoY (which is 1.4x TTM revenue), supported by 36% YoY growth in new orders. The company expects a gradual recovery in the margin profile due to a favourable mix in the chemical segment and a correction in commodity prices.
Outlook
TMX is currently trading at a P/E of 56x on a 1 year forward basis, which is well above its 1 year average P/E of 46x, implying limited room for further upside in the near term. Therefore, we revise our rating to REDUCE and value TMX at a P/E of 43x on FY24E EPS with a TP of Rs. 2,178.
More Info
At 11:40 hrs Thermax was quoting at Rs 2,396.70, down Rs 23.20, or 0.96 percent.
It has touched an intraday high of Rs 2,425.35 and an intraday low of Rs 2,392.40.
It was trading with volumes of 950 shares, compared to its thirty day average of 8,012 shares, a decrease of -88.14 percent.
In the previous trading session, the share closed up 0.04 percent or Rs 0.85 at Rs 2,419.90.
The share touched its 52-week high Rs 2,535.95 and 52-week low Rs 1,306.65 on 29 August, 2022 and 25 October, 2021, respectively.
Currently, it is trading 5.49 percent below its 52-week high and 83.42 percent above its 52-week low.
Market capitalisation stands at Rs 28,558.19 crore.
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