Thermax rallies 8% on strong Q4 results; stock nears 52-week high

Order book during the quarter jumped 57 per cent year on year at Rs 1,497 crore as against Rs 952 crore, aided by broad based industrial recovery

Shares of energy solutions firm Thermax rallied 8 per cent to Rs 1,526.95 on the BSE, in Wednesday’s intra-day trade, after the company reported strong earnings for March quarter (Q4FY21). Its consolidated profit after tax (PAT) more-than-doubled at Rs 107 crore as against Rs 39 crore clocked in Q4FY20. The stock was trading close its 52-week high of Rs 1,550, touched on May 7, 2021.

The management attributes the higher profit to higher sales, cost reduction measures taken across the group, and better margins in the energy segment. The previous year profit was impacted due to the outbreak of Covid-19, it said.

Meanwhile, the company’s consolidated operating revenue grew 19 per cent to Rs 1,575 crore from Rs 1,323 crore in the corresponding quarter of previous fiscal. Ebitda (earnings before interest, taxes, depreciation, and amortisation) came in at Rs 139.6 crore level, which grew by 120 per cent on year on year (YoY) basis but declined by 5.4 per cent on quarter on quarter (QoQ). Consequently, Ebitda margin came in at 8.9 per cent registering a decline of 160 basis points (bps) on QoQ basis.

Order book during the quarter jumped 57 per cent year on year (YoY) at Rs 1,497 crore as against Rs 952 crore, aided by broad based industrial recovery. The energy segment saw improved order booking at Rs 1,173 crore with increased thrust on sustainability, improved performance of the product businesses and channel business.

"Thermax’s execution performance was reflection of normalcy in operations across business segments. Order inflows suggest broad based recovery in sectors ranging from cement, steel, refinery, food & beverages. While operating margins were partly impacted by higher material costs despite controlled operating cost, the consolidated order inflow for the quarter was at Rs 1,497 crore (vs. Rs 1,565 crore in Q3FY21) aided by broad based recovery. Strong balance sheet, prudent working capital management would provide a competitive advantage despite challenging environment," ICICI Securities said in a note.

Additionally, the board has recommended a dividend of Rs 7 per equity share of Rs 2 each (350 per cent), for the financial year 2020-21, subject to approval of the shareholders.

At 10:27 am, Thermax was trading 6 per cent higher at Rs 1,494 on the BSE, as compared to a 0.42 per cent rise in the S&P BSE Sensex. Trading volumes on the counter jumped over four-fold with a combined around 402,000 equity shares having changed hands on the NSE and BSE till the time of writing of this report.