Thermax

The market expected a 18% jump in net profit and it actually fell 17% and the stock price tanked one way – downwards. There was a fall all around – topline, bottomline, margins, orders and consequently stock price. The market had expected the company to post good numbers as it had expected a reversal but this performance shows that it has yet started percolating to capital goods companies. especially those which are linked with power companies.

Thermax registered an operating revenue of Rs.840 crore, lower by 3% (YoY) and net profit was down 18% at Rs.41 crore. EBITDA margin came at a 20-quarter low of 6.9% v/s 9.4% in previous Q1. On a consolidated level, Q1 revenue was Rs. 1010 crore (Rs.1051.7 crore) and net profit was Rs. 17 crore (Rs.53 crore). The most disappointing part – order book is down 6% at Rs.5206 crore and order inflow tumbled almost 70%. Until the boiler turbine segment improves, which depends on the power sector, this lag will continue.