Thermax (THERMAX) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 saw consolidated operating revenue rise 13% year-over-year to Rs. 2,184 crore, with profit after tax up 82% to Rs. 109 crore, reflecting recovery from last year's exceptional charge and improved margins.

• Order book remained stable at Rs. 10,681 crore, with no large orders booked in the quarter.

• Significant one-time losses in the industrial infra segment, mainly from bio-CNG and FGD projects, totaling over INR 70 crore.

• Management remains confident about improved performance in subsequent quarters, with most engineering challenges addressed and a conservative approach to future risks.

• New manufacturing facility for water and wastewater solutions launched in Pune; 51% stake acquired in TSA Process Equipments to strengthen water solutions portfolio.

Financial highlights

• Operating revenue increased 13% year-over-year to Rs. 2,184 crore; PAT rose 82% to Rs. 109 crore; PBT increased 77% to Rs. 161 crore.

• PBT margin improved to 7.4% from 4.7% in Q1 FY24; PAT margin rose to 5.0% from 3.1%.

• Losses in industrial infra driven by INR 45 crore hit in bio-CNG, INR 8 crore in FGD, and INR 20 crore in a sulfur recovery unit project.

• Excluding one-time items, EBIT for the quarter could have been INR 60 crore positive.

• Cash and investments stood at Rs. 2,955 crore.

Outlook and guidance

• Management expects normalization and improved margins in coming quarters, with most major project losses now front-loaded.

• Enquiry inflows remain strong in distillery, chemical, metal, F&B, biofuel, and power segments; international order pipeline continues to grow.

• Focus on expanding water and chemical solutions businesses, with new manufacturing and strategic acquisitions.