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.