Thermax

Thermax is on a roll. The capital good company declared an almost three times jump in net profit at Rs.86 crore for Q2FY15 v/s Rs.30 crore in previous quarter. Also at the same time, in previous Q2, the company had around Rs.29 crore which was provision kept for certain settlement with the income tax for a one-time settlement, which in itself subdued its net profit.

Its revenue jumped up 14% at Rs.1191 crore. The company has said that this spurt in performance was due to increased demand for its products in the domestic market, better order booking and a pickup of orders from the international market. Its order inflow for the quarter stood at Rs.1089 crore, which is a 42% increase on YoY and this was order coming in mainly from Thailand and Africa. Last week too, Thermax announced receiving Rs.321 order from a captive power plant in Africa.

The good news is that Capital Goods sector is slowly but surely bouncing back. Around 17 companies received a combined fresh orders amounting to Rs 28,170 crore from the state and the central government during the past month, September.  Of this, maximum orders went to the Capital Goods sector, clocking in Rs.23,448 crore or 83% of the total order. Thus there is no denying the fact that capital goods stocks are back on the “buy” radar. But mind you, the sector is not yet out-of-the woods as mentioned earlier. The current fancy for the sector is based on pure assumption that with the process of economic revival round the corner, power sector expected to get a priority, this sector will bounce back the fastest.