Thermax Ltd
Stock Snapshot
Price Performance
Vista Outlook
Basis of our Recommendation
Thermax Ltd's recent performance has been marked by significant challenges, particularly due to cost overruns on legacy government projects, which have pressured margins and profitability in Q1 FY27. However, management remains optimistic, highlighting a strategic pivot towards private sector orders and a robust order backlog of INR 140 billion, which is expected to drive revenue growth in the coming quarters. The company's focus on high-margin segments, such as specialized cooling solutions for data centers and green technologies, aligns with Vista's forecast of stable revenue growth despite current margin pressures. The anticipated recovery in execution efficiency and the completion of legacy projects are expected to support a sequential improvement in margins. While the industrial machinery sector is experiencing a favorable growth trajectory, characterized by increasing demand for automation and energy solutions, Thermax must navigate competitive pricing pressures and potential supply chain disruptions. Over the next 12-24 months, key opportunities include expanding its footprint in the US data center market and capitalizing on green energy initiatives, while watchpoints include execution risks in the Industrial Infra and Green Solutions segments
Why We Like This Stock
- Strong order backlog of INR 140 billion supports future revenue growth
- Strategic shift towards high-margin private sector projects and green technologies
- Management's focus on improving execution efficiency is expected to stabilize margins
Things To Watch Out For
- Current margin pressures due to cost overruns on legacy projects
- Execution risks in the Industrial Infra and Green Solutions segments may impact performance
- Competitive pricing pressures and potential supply chain disruptions could limit profitability
Key Parameters
Financial Snapshot
View Technicals Analysis →| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 9,323 | 10,389 | 10,694 | 10,744 | 11,811 |
| Profit Before Tax (Cr.) | 794 | 887 | 947 | 710 | 914 |
| PBT Margin | 8.5% | 8.5% | 8.9% | 6.6% | 7.7% |
| Net Profit (Cr.) | 599 | 587 | 697 | 518 | 667 |
| Earnings Per Share | 53.4 | 52.8 | 61.8 | 45.9 | 59.2 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Macguire | ► Neutral | 4,100 | 09-Sep-2026 |
| ICICI Securities | ► Hold | 4,100 | 03-Aug-2026 |
| Jeffries | ▲ Buy | 5,200 | 03-Aug-2026 |
| Moneycontrol | ▼ Underweight | nan | 03-Aug-2026 |
| Prabhudas Liladhar | ▼ Reduce | 3,952 | 03-Aug-2026 |
| Motilal Oswal | ▼ Sell | 4,000 | 01-Aug-2026 |
| UBS | ▲ Buy | 5,100 | 01-Aug-2026 |
| JPMorgan | ► Neutral | 4,335 | 31-Jul-2026 |
| Kotak Securities | ▼ Sell | 4,250 | 07-Jul-2026 |
| Geojit Financials | ► Add | 4,965 | 13-May-2026 |
| HDFC Securities | ▲ Buy | 4,175 | 10-Apr-2026 |
Company Overview
Show Company Profile
Thermax Limited provides energy, environmental, and chemical solutions in India and internationally. It operates in Industrial Products, Industrial Infra, Green Solutions, and Chemical segments. The Industrial Products segment offers manufacturing, installation, sales and services related to boilers and heating equipment, absorption chillers/heat pumps, air pollution control equipment/ systems, water & waste recycling, including associated services and engineering, procurement and construction. The Industrial Infra segment provides engineering, procurement, and construction (EPC) of power plants, infra projects, and flue gas desulphurisation projects, along with associated services and manufacturing, installation, sales and services related to boiler and heater plants. The Green solutions segment builds, owns and operates BOO models, energy management solutions, oil and gas-fired, green hydrogen projects and renewable energy (Solar/Wind). The Chemical segment offers manufacturing, installation, sales and services related to ion exchange resins, performance chemicals, construction chemicals, water treatment chemicals, oil field chemicals, paper and construction chemicals, and related services. It also operates cogeneration, waste heat recovery power, captive power, and independent power plants, as well as offers operation and maintenance services. In addition, the company offers steam boilers; waste heat recovery units; fired heaters and process furnaces; thermic fluid, hot air, and hot water heaters; and waste heat recovery. It serves automobiles, cement, chemicals and fertilizers, commercial/construction, dairy, distillery, paper and pulp, pharmaceuticals, plywood, power generation, food, refineries and petrochemicals, soft beverages, metals, sugar, textiles, and tyre industries. Thermax Limited was incorporated in 1966 and is headquartered in Pune, India. Thermax Limited is a subsidiary of RDA Holdings Private Limited.