Thermax (THERMAX) Q2 24/25 earnings summary

Executive summary

• Secured a large international order in Botswana for the Large Boilers division, contributing to a 70% year-over-year surge in order booking and a 13% increase in the order book to ₹11,593 crore.

• Operating revenue for Q2 FY25 rose 13% year-over-year to ₹2,612 crore, with PAT up 25% to ₹198 crore, aided by a ₹66 crore government incentive.

• Notable business wins and project commissions in industrial products, infra, green solutions, and chemicals, including new international projects and facility foundations.

• Board decided not to bid for large supercritical government projects in India due to risk and historical profitability concerns.

• Base orders have remained steady in the INR 2,000-2,500 crore range over eight quarters, with growth in Industrial Products and Chemicals segments.

Financial highlights

• Consolidated margin (excluding subsidy) reported at 8.3%; PBT margin improved to 10.2% in Q2 FY25 from 9.4% a year ago.

• PAT margin rose to 7.6% from 6.9% year-over-year; cash and investments stood at ₹2,639 crore, down 2% year-over-year.

• Revenue and PBT include ₹66 crore incentive income from a government scheme, expected to recur periodically over the next three years.

• Industrial Infra segment margins under pressure, with incentive income boosting results; underlying margins remain weak due to legacy projects.

• Order book at quarter-end: ₹11,593 crore; order booking for Q2: ₹3,353 crore.

Outlook and guidance

• Pipeline for large projects in refining, petrochemicals, steel, and international markets is developing, with expectations for more opportunities in Q4 and next year.

• Industrial Products and Chemicals segments expected to continue double-digit growth, with Chemicals showing order momentum despite revenue impact from freight issues.

• Green Solutions (FEPL and TOESL) expected to see continued investment and top-line growth, though TOESL order inflow has lagged internal plans.

• Management remains confident in long-term growth, supported by robust order inflows and a strong order book.

• Bio-CNG business outlook is cautious in the short term due to unresolved performance issues, but medium- to long-term prospects remain bullish if sector viability improves.