Girish Pai

Nirmal Bang

Equity Bottom-Up

<p>4QFY21 Result Update</p>
<h2>Thermax</h2>
<h3>Outlook remains uncertain, rich valuation</h3>
<p>Thermax posted 4QFY21 consolidated revenue of Rs15.7bn, up 19% YoY, broadly in-line with consensus and 13% below our estimates. Topline was aided by healthy growth across all the three segments. Energy/Environment/Chemicals segment sales rose by 12%/52%/24% YoY to Rs11.8bn/Rs3bn/Rs1.2bn. Gross margin fell 130bps YoY to 47.8%. EBITDA jumped 120% YoY to Rs1.4bn, led by lower staff cost (flat YoY) and lower other expenses (up…</p>

<p>3QFY21 Result Update</p>
<h2>Thermax</h2>
<h3>Execution in-line; Double-digit margins unlikely to sustain</h3>
<p>Thermax posted 3QFY21 consolidated revenue of Rs14.1bn, flat YoY and 6%/3% above our/consensus estimate. Energy/Chemicals segment sales declined by 5% YoY each to Rs10.7bn/Rs1.1bn. Environment segment sales grew 28% YoY to Rs2.5bn. Gross margin jumped 230bps YoY to 46.7%. EBITDA grew 30% YoY to Rs1.5bn, leading to a healthy operating margin of 10.5%, up 250bps YoY, led by healthy volume, better product mix…</p>

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<p>2QFY21 Result Update</p>
<h2>Thermax</h2>
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<h3>Tepid execution, profitability and order inflows</h3>
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<p>Thermax posted 2QFY21 consolidated revenue of Rs11.4bn, down 29% YoY and 4%/11% below our/consensus estimate. Energy/Environment segment sales declined by 34%/14% YoY to Rs8.9bn/Rs1.6bn. However, Chemicals segment sales grew 4% YoY to Rs1.1bn. Gross margin was down 80bps YoY at 44.7%. EBITDA fell 39% YoY to Rs793mn, leading to an operating margin of 7%, down 110bps YoY. EBIT margin was weak in the Energy…</p>
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<p>1QFY21 Result Update</p>
<h2>Thermax</h2>
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<p><strong>Lockdown affects performance; Topline growth a challenge</strong></p>
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<p>Thermax posted 1QFY21 consolidated revenue of Rs6.6bn, down 52% YoY and 12%/10% below our/consensus estimates due to disruption in business activities of Thermax and its customers amid COVID-19 lockdown. Energy/Environment/Chemical segment sales declined 57%/43%/14% YoY to Rs5bn/Rs839mn/Rs843mn, respectively. Gross margin rose 380bps YoY and 60bps QoQ to 49.7%, led by lower commodity costs and…</p>
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India

Thermax Ltd manufactures equipment and machinery used to both produce and to conserve energy. The Company operates through a number of divisions, including Boilers, Heat Recovery Steam Generators, Water Treatment Plants and Air Pollution Control Equipment. In addition, Thermax  produces steam and gas turbines and diesel gensets through a number of strategic alliances.

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