Thermax - Result Review - Angel Broking

For 1QFY2014, Thermax's top-line and bottom-line performance were below our expectations as well as street estimates. The company reported 12.3% yoy decline in top-line to Rs.863cr (our estimate of Rs.944cr), mainly due to slow execution in energy segment (segmental revenue down by 17.2% yoy to Rs.634cr). On the operating front, OPM contracted by 36bp yoy to 9.4% (our estimate of 9.8%) on account of appreciation in cost of raw materials (due to rupee depreciation). Falling revenue and margin contraction led to yoy fall of 25.2% in the company's PAT to Rs.50cr. Order intake for the company is likely to remain muted as not many large orders are expected to be finalized during FY2014, thereby limiting revenue visibility.

Hence, we maintain our Neutral rating on the stock.

Source : Equity Bulls

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