Thermax - Q3FY12 Result Update - Emkay

Reco: HOLD
CMP: Rs 522
Target Price: Rs 495

Earnings Overhang; Downgrade to Hold

- Below estimates – (1) Revenue up 2% yoy to Rs12.7 bn (2) EBITDA% down 110 bps yoy to 10.7% (3) EBITDA down 7% yoy to Rs1.4 bn (4) APAT down 5% yoy to Rs955 mn

- Order inflows decline 42% qoq to Rs7.5 bn – lower than quarterly run-rate of Rs12 bn. Order book declines 11% qoq to Rs58 bn and order book cover deteriorates to 1.0X revenues

- Running weak order cover at 1.0X Revenues and ambiguity on near-term order inflows; Also investments in super-critical venture remains an overhang

- Cut earnings by 7% and 11% for FY12E and FY13E on reduced order book visibility. No near term re-rating catalysts + risks to earnings exist. Downgrade to Hold with target of Rs495.

Source : Equity Bulls

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