Thermax - Q2FY21 First Cut - ICICI Direct

(CMP: Rs. 754; MCap: Rs. 8,989 crore)

Thermax reported muted Q2FY21 numbers on revenue front owing to subdued order book and challenging economic conditions. While EBITDA margins came in better than expected at 7.0%. However, order inflows and order books continue to remain key concerns amid continued slowdown in industrial activities.

Q2FY21 Earnings Summary

- Consolidated revenue came in at Rs. 1141.2 crore registering decline of 28.9% YoY (below our estimate of Rs. 1191.9 crore) on the back of slower execution. Energy segment revenue (which contributes ~77.5% to revenue) declined by 33.9% to Rs. 885.8 crore, YoY while Environment segment revenue declined by 13.5% to Rs. 155.9 crore and chemical segment revenue came in at Rs. 114.5 crore, marginally up by 3.6%, YoY

- The consolidated order inflow for the quarter came in at Rs. 1114 crore down 35% on YoY basis. While consolidated order book as on Q2FY21 stood at Rs. 5190 crore, down 3.0% on YoY basis

- EBITDA came in at Rs. 79.3 crore level, which declined by 39.1% on YoY basis impacted by higher employee expenses. However, EBITDA margin came in better than expected at 7.0% (Vs. our estimates of 3.6%) registering a decline of mere 120bps on YoY basis

- Reported PAT came in at Rs. 31.2 crore which grew by 21.5% on account of tax adjustments in base quarter and impacted by exception items. Consolidated Adj. PAT (after adjusting for exceptional items) comes to Rs. 48.7 crore, up 89.4% on YoY basis owing tax adjustments in base quarter

- Exceptional items worth Rs. 24.7 crore was on account of VRS scheme, impairment of certain assets of boilerworks properties (Denmark) and provisions toward German subsidiaries

Thermax' softer execution performance was reflection of muted capacity expansions in the majority of sectors which continued to impact the company's revenue and order book position. However, operating margins came in better than expected owing to reduction in operating costs.

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

Shares of THERMAX LTD. was last trading in BSE at Rs.756.5 as compared to the previous close of Rs. 755.45. The total number of shares traded during the day was 2398 in over 507 trades.

The stock hit an intraday high of Rs. 773 and intraday low of 748.95. The net turnover during the day was Rs. 1823136.

Source : Equity Bulls

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