Kotak maintains Reduce on Thermax

While the project-based revenues have slowed down, the company's standard product orders continues to enjoy healthy demand from sectors like Foods and Pharmaceuticals. The company expects to largely maintain EBITDA margins at FY12 levels, though there is a risk of 100-150 bps loss in EBITDA margins in this fiscal.

- The company's manufacturing facility for supercritical boilers is running as per schedules and commissioning is expected before the end of CY12. The company has not bagged any order for the supercritical boiler facility though negotiations have been on for some time. The company is hopeful of taking orders in due course.

- Given the backdrop of weak project investment scenario in the country; valuations are not supportive at current levels and there is scope for correction. We maintain REDUCE with an unchanged target price of Rs 450.

Source : Equity Bulls

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