Thermax (THERMAX) Q3 25/26 earnings summary

Executive summary

• Q3 FY26 performance was mixed, with revenue and profitability below expectations due to customer delays and volume underperformance, but order booking rose 34% year-over-year to Rs. 3,080 crore, and the order book quality and backlog remain strong, especially internationally.

• Operating revenue increased 4% year-over-year to Rs. 2,635 crore, with PAT up 80% to Rs. 205 crore, aided by exceptional gains.

• Major order secured from Dangote Industries for utility boilers and systems for a Nigerian refinery and petrochemical complex, with significant revenue recognition expected next year.

• No new negative surprises in legacy projects; execution improvement continues in NRL, BioCNG, FGD, and FEPL categories.

• Management remains bullish on order inflows and expects a strong Q4, with a positive outlook for the next year.

Financial highlights

• Chemicals segment saw a significant contraction in profitability, with INR 50 crore lower PBT year-to-date versus last year, mainly due to new asset costs and lower volumes; PBIT margin fell to 4.6% from 13.8%.

• Industrial Products EBIT margin declined below 10% due to slower growth in the most profitable product line (heating) and a shift in mix toward water and Enviro; order booking up 14%, order balance up 15%.

• Industrial Infra order booking surged 68%, order balance up 9%, PBIT margin improved to 6.3% from 0.1% due to operational efficiency.

• Green Solutions: Order booking up 268% (due to reporting change), margin improved to 5.2% from -1.0%.

• International orders accounted for 50% of product business in the quarter, with INR 1,400+ crore in international order inflows.

Outlook and guidance

• Management expects Q4 to show a reversal in Chemicals and Industrial Products margins, with profitability improving toward double digits.

• Double-digit quarter-over-quarter revenue growth is expected in Q4, but not for the full year.

• Data center sector identified as a high-potential growth area, with two major wins (domestic and international).

• Export performance in the MENA region continues to improve.

• India’s manufacturing PMI remains strong, indicating continued factory growth.