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Thermax reports decent Q2FY22 performance

News: Thermax reported decent Q2FY22 numbers. Consolidated revenue came in at Rs.1469.3 crore, which grew 28.8% YoY amid low base (above our estimate of Rs.1532.2 crore) aided by better execution in environment segment. EBITDA came in at Rs.110 crore, up by 38.6% on YoY aided by better business mix.  Consequently, EBITDA margin came in at 7.5%. Gross margins improved marginally by 30bps to 45% on YoY basis. Adjusted PAT came in at Rs.87.9 crore, up 80.5% YoY, partly aided by higher other income and lower effective tax rate.

Views: Thermax reported decent execution performance amid challenges. It reported decent order inflows witnessing broad based recovery in sectors ranging from cement, steel, food & beverages, refinery etc. While operating margins partly improved by favourable business mix despite higher commodity prices. However, order inflows came in decent improving the overall order book position to Rs.6516 crore as on Q2FY22 despite better execution. Going forward, strong balance sheet, prudent working capital management to provide a competitive advantage amid challenging environment.