Thermax (THERMAX) Q3 24/25 earnings summary

Executive summary

• Q3 FY25 was challenging, with consolidated revenue rising 8% year-over-year to ₹2,508 crore, but profit after tax dropped 50%-52% to ₹114 crore due to the absence of last year's exceptional gain and lower margins in key segments.

• Order booking declined 8% year-over-year to ₹2,296 crore, with no large orders secured, but order balance increased 6% to ₹11,383 crore, reflecting a stable base and strong enquiry inflows.

• Revenue was impacted by delayed customer pickups and project execution challenges, particularly in FGD (Maithon project) and Bio-CNG, but stabilization is now visible.

• A reversal of INR 21 crores was made due to an income tax refund error, impacting the quarter's profitability.

• A strong Q4 is anticipated with improved backlog management, robust order pipeline, and additional safeguards in place.

Financial highlights

• Q3 saw a revenue miss of approximately INR 500 crores, with over INR 60 crores in associated profitability not realized due to backlog clearance delays.

• Profit before tax for Q3 was ₹156 crore, down 50% year-over-year; last year included a ₹126 crore exceptional gain.

• PAT margin fell to 4.5% from 10.2% a year ago; PBT margin for Q3 was 6.2%, down from 13.3%.

• Cash and investments stood at ₹2,782 crore, down 52% year-over-year.

• FGD project (Maithon) resulted in a negative impact of INR 16 crores this quarter, but no further losses are expected from this project going forward.

Outlook and guidance

• Q4 is expected to deliver revenues and orders north of INR 3,000 crores and profitability above 10%.

• For FY26, overall growth is anticipated, contingent on project inflows covering base costs of INR 80-100 crores; project inflow reversal is key to sustaining profitability.

• Enquiry inflows remain strong in distillery, metals, chemical, F&B, and power sectors, with an upward trend in biofuel segment enquiries.

• Export revenues are projected in the INR 2,000-3,500 crore range for next year.

• Industrial Infra segment is expected to see significant improvement next year as backlog rebuilds and government project exposure is reduced.