Thermax Ltd - Q4 FY21 Result Update - YES Securities

(Rating: ADD, TP: Rs1550, Upside: 6%)

- Revenue grew 19% yoy to Rs15.7 bn led by Energy segment which grew by 51% yoy while Environmental sales and Chemical segmental revenues grew by 13% and 24% respectively.

- EBITDA more than doubled to Rs1.4 bn and EBITDA margin expanded to 8.9%. The Company has passed through some cost in FY22 to offset the rising commodity prices. May see cost pressure in Q1 FY22.

Our view: Company delivered robust performance during the quarter driven by strong performance across verticals. While the orderbook stood flat for the year new big orders are expected to kick in as COVID situation improves. The margins which have been under pressure due to rising commodity price are expected to stabilize as Company passes through the cost to end users in coming quarters. Demand outlook stays positive in segments like cement, oil and gas and specialty chemicals. The EBIT margins of chemicals likely to sustain at ~25% levels due to its rising demand. We have marginally increased our estimates for FY22/23 to factor in strong Q4 performance and improved outlook. We retain our ADD rating on the stock for target price of Rs. 1,550 (40x FY23e EPS).

Shares of THERMAX LTD. was last trading in BSE at Rs.1465.95 as compared to the previous close of Rs. 1460.65. The total number of shares traded during the day was 4745 in over 614 trades.

The stock hit an intraday high of Rs. 1479.6 and intraday low of 1430.6. The net turnover during the day was Rs. 6911856.

Source : Equity Bulls

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