Thermax (THERMAX) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 consolidated operating revenue was Rs. 2,150 crore, a 2% decrease year-over-year due to project delays, early rains, and execution challenges.

• Order booking increased 7% year-over-year to Rs. 2,748 crore, with order balance also up 7% to Rs. 11,376 crore, driven by large Industrial Infra and Green Solutions orders.

• Profit before tax rose 31% year-over-year to Rs. 211 crore, and net profit increased 38-39% to Rs. 151 crore, aided by a one-time INR 56 crore government incentive.

• Cash and investments stood at Rs. 3,161 crore, up 7% year-over-year.

• Standalone operating revenue was Rs. 1,183 crore, a 10% decrease year-over-year; standalone net profit was Rs. 46 crore, down 47%.

Financial highlights

• Q1 FY26 operating revenue: Rs. 2,150 crore (down 2% YoY); PAT: Rs. 151 crore (up 38-39% YoY).

• PBT margin improved to 9.8% from 7.4% YoY; PAT margin rose to 7% from 5%.

• Margins improved by 1.2% year-over-year, excluding the government incentive.

• Industrial Products segment saw revenue and margin declines, but a strong backlog is expected to support future profitability.

• Chemicals business margins dropped to 9.3% from 12-13% due to new capacity, higher costs, and one-off items; expected to recover in Q2.

Outlook and guidance

• Management remains bullish for FY26, expecting steady and profitable growth in Industrial Products and a rebound in Chemicals, barring prolonged U.S. tariff impacts.

• Double-digit order inflow growth is anticipated, with a strong pipeline in Industrial Infra and international markets.

• New products (ZLD, heat pumps, electric boilers) now contribute about 20% of Industrial Products and are expected to drive growth above 15% CAGR.

• Manufacturing PMI averaged 58.1-58.4 in Q1 FY26, the highest in 14 months, indicating robust demand.

• Input costs for copper and aluminium rose 5-7% sequentially, but overall input cost impact was stable.