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Informist, Thursday, Jul. 31, 2025

By Eshitva Prakash

MUMBAI – Thermax Ltd. is expected to report a sharp on-year increase in its bottom line in the June quarter. Continued growth in the industrial product and chemical segments, a contraction in losses by subsidiaries, and a healthy industrial infrastructure segment order pipeline are expected to be the key contributors to the growth of the company's net profit.

The company's consolidated net profit for the June quarter is expected to be INR 1.40 billion, up 21% from the year-ago quarter but down 32% on quarter, according to the average of estimates from eight brokerages tracking the company. The highest estimate for net profit is INR 1.72 billion from Antique Stock Broking Ltd.  while the lowest is INR 1.18 billion from Elara Securities (India) Pvt. Ltd.

Thermax is expected to post consolidated net sales of INR 24.40 billion, up 12% from the year-ago quarter but down 21% sequentially. The company had posted net sales of INR 21.84 billion in the year-ago quarter. The highest estimate for the company's net sales is INR 24.50 billion from HDFC Securities Ltd. while the lowest estimate is INR 24.24 billion is from Prabhudas Lilladher Pvt. Ltd.

Analysts expect the company's revenue from the industrial products segment to continue to grow in double digits. This segment is expected to continue to outperform other segments, and contributed INR 14.30 billion to the company's revenue in the previous quarter, up 18% on year. Small boilers and heating units are expected to remain the most profitable products for Thermax while water and environment segments are expected to record high growth. The company expects high-teen growth in its order book, led by continued growth in its industrial product segment's order book.

Thermax had been struggling with a softer order-book growth due to weak order inflows in the previous quarter in industrial infrastructure and green energy segments. "Quality of orders, along with moderation in large-ticket orders remain key challenges," Nuvama Research said. Two deferred orders for industrial infrastructure projects from the trailing quarter were closed early in the June quarter, the company said.

The near-term demand for steel, power and waste-to-energy segments is expected to help the industrial infrastructure segment of the company grow. This segment contributed to nearly 45% of the company's top line in the previous financial year and has seen a muted growth in the share of Thermax's revenue due to high cost, low margin legacy projects of bio-CNG, sulphur recovery, and flue gas desulfurization. "The current FGD (flue gas desulfurization) project backlog stands at INR 4.50 bn. Of this, INR 3.50 bn is expected to be liquidated in FY26, with INR 1 bn potentially slipping into FY27," LKP Securities said.

Analysts expect margins for the green solution segment of the company to improve. The company's subsidiary First Energy Pvt. Ltd. had posted a large loss in FY25, which is expected to come down significantly in FY26, ICICI Securities said. The company plans to grow business through continued investment in the green hydrogen space.

Thermax has taken a cautious approach with new projects, according to analysts. The company decided to not bid for Bio-CNG projects in FY25 and hopes to break even in this segment in the June quarter. "Both Thermax and Praj would see uptick in bio-CNG ordering from 1HFY26 (first half of FY26)," Kotak Institutional Equities said.

The chemical segment of the company is expected to post a higher bottom line for the current quarter with the company targeting high-teen margins for the segment. "The product mix in chemicals is changing to newer construction chemicals, floorings and other new segments that the company has entered and looks to increase the growth," ICICI Securities said.

The company's earnings before interest, tax, depreciation, and amortisation are expected at INR 1.99 billion, according to the average of estimates from seven brokerages. The highest estimate for EBITDA of INR 2.22 billion is from Antique Stock Broking whereas the lowest estimate of INR 1.60 billion is from Elara Securities.

Thermax will detail its earnings Thursday. Analysts are monitoring the finalisation of inquiry pipelines and execution of deals. Performances of the company's subsidiaries, First Energy Private Ltd. and Thermax Onsite Energy Solutions Ltd., are among the key factors to watch.

At 1228 IST, shares of Thermax Ltd. were trading at INR 3,860 on the National Stock Exchange, up slightly. The stock has risen 17% since the announcement of its March quarter earnings.

Of the eleven brokerage reports on the company available with Informist, five have a 'sell' recommendation on the stock with an average target price of INR 3,283. Four brokerages have a 'buy' recommendation with a target price of INR 3,878 while two brokerages have a 'hold' recommendation.

Following are the June quarter earnings estimates for Thermax Ltd. based on reports from eight brokerages in descending order of estimate of net profit:

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Edited by Deepshikha Bhardwaj

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