Improving ordering pipeline

Company
18 Nov 2024
5 Min read 
  • Thermax's 2QFY25 results were ahead of estimates, with revenue, EBITDA, and PAT growing by 13%, 36%, and 25% YoY respectively.
  •  Order inflow for the quarter jumped 70% YoY to INR33.5b, resulting in an order book of INR116b, up just 13% YoY.
  •  The company is experiencing an improved pipeline of large projects across steel, mining, and refining sectors.
  •  Estimates for FY25/26/27 were cut by 4%/1%/1% to factor in the 2Q performance.
  •  The stock is currently trading at 79x/60x/49x FY25E/FY26E/FY27E EPS, with a revised TP of INR4,900 based on 55x Dec26E EPS and the value of investments in Green Solutions at 1.5x P/BV.
  •  Key risks include a slowdown in order inflows, a sharp rise in commodity prices, slower-than-expected revival in private sector capex, and increased competition.
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