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News: Thermax reported a mixed set of Q2FY25 results. The key positive for the quarter was 70% YoY growth in order inflow at Rs 3353 crore (mainly led by a big order wind of Rs 1029 crore. The order backlog also grew by 13% YoY at Rs 11593 crore. Optically revenue and PAT came in at Rs 2612 crore and Rs 198 crore. But the same has exceptional one off to the tune of Rs 66 crore (incentive from government). Adjusted for the same, revenues grew by 10.5% YoY to Rs 2545 crore while EBITDA declined. Margins came in at 8.3% for the quarter, down 40 bps YoY. However adjusted PAT declined to Rs 148 crore vs. Rs 158 crore on back of higher finance costs.
Views: We like the business model and philosophy of Thermax in terms of bidding of profitable orders and adhering to working capital discipline. However with rich valuations the stock might consolidate in a range. Any sharp correction would be an opportunity to buy.
Impact: Neutral