Thermax - Q2FY21 Result Update - ICICI Direct

Consolidated revenue was at Rs. 1141.2 crore, down 28.9% YoY (below our estimate of Rs. 1191.9 crore) on slower execution. Energy segment revenue (contributing ~77.5% to revenue) fell 33.9% to Rs. 885.8 crore YoY while environment segment revenue fell 13.5% to Rs. 155.9 crore, chemical segment revenue was at Rs. 114.5 crore, marginally up 3.6% YoY. However, EBITDA margin was better-than-expected at 7.0% (vs. our estimate of 3.6%) posting a decline of mere 120 bps YoY. Reported PAT came in at Rs. 31.2 crore, up 21.5% due to tax adjustments in base quarter and impacted by exception items. Consolidated adjusted PAT (excluding exceptional items) comes to Rs. 48.7 crore, up 89.4% YoY due to tax adjustments in base quarter.

Valuation & Outlook

Thermax' weak execution performance was a reflection of subdued order inflows, order backlog, muted capacity expansion in majority industrial sectors while margins improved QoQ due to better mix and favourable margins in chemicals segment amid disrupted business activities. Expected orders in pharma, chemicals, food processing, cement and refinery sectors orders would aid order inflows and order backlog. However, strong balance sheet, prudent working capital management provide a competitive advantage despite challenging environment. We expect adjusted revenue, EBITDA CAGR of -1.3%, 3.1%, respectively, in FY20-22E. We revise our target price to Rs. 810 (30x on FY22E EPS) and maintain HOLD.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Thermax_Q2FY21.pdf

Shares of THERMAX LTD. was last trading in BSE at Rs.790 as compared to the previous close of Rs. 754.4. The total number of shares traded during the day was 3166 in over 552 trades.

The stock hit an intraday high of Rs. 794.9 and intraday low of 740. The net turnover during the day was Rs. 2464974.

Source : Equity Bulls

Keywords