Thermax - Q1FY21 First Cut - ICICI Securities

(CMP: Rs. 749; MCap: Rs. 8,925 crore)

Thermax reported weaker Q1FY21 performance with substantial decline in revenue owing to muted order book and covid-19 impact. Consequently, it reported loss at EBITDA level and margins further deteriorated. However, order inflows and order book continue to remain key concerns amid slowdown in industrial activities.

Q1FY21 Earnings Summary

· Consolidated revenue came in at Rs. 665 crore registering decline of 52.2% YoY (Vs our estimate of Rs. 716.4 crore) on the back of slower execution owing to covid-19 lockdowns. Energy segment revenue (which contributes ~75% to revenue) declined by 57% to Rs. 500.4 crore, YoY while Environment segment revenue declined by 43% to Rs. 83.9 crore and chemical segment revenue came in at Rs. 84.3 crore, down 13.8%, YoY.

The consolidated order inflow for the quarter came in at Rs. 608 crore down 50% on YoY basis. While consolidated order book as on Q1FY21 stood at Rs. 5212 crore, down 1.0% on YoY basis.

The company has registered a loss of Rs. 11.4 crore at EBITDA level (Vs. EBITDA of Rs. 99.1 crore in Q1FY20), owing to higher employee expenses, other operating expenses and lesser booking of revenues.

Consolidated loss after tax came in at Rs. 15.3 crore (vs. PAT of Rs. 62.8 crore in Q1FY20), partially impacted by 6.8% YoY increase in depreciation.

Thermax' weak execution performance was reflection of subdued order inflows and order backlog and disruption in dispatches & execution amid lockdowns while margins further deteriorated due to higher operating expenses amid Covid-19.

We would be coming out with a detailed report post the conference call.

Shares of THERMAX LTD. was last trading in BSE at Rs.749 as compared to the previous close of Rs. 736.5. The total number of shares traded during the day was 11624 in over 3938 trades.

The stock hit an intraday high of Rs. 749.8 and intraday low of 735. The net turnover during the day was Rs. 8599556.

Source : Equity Bulls

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