ICICI Direct has given Buy recommendation for Thermax with a target price of Rs. 1685 in its research report issued on May 27, 2021

ICICI Direct’s research report on Thermax

Consolidated revenue came in at Rs 1574.5 crore, up 19% YoY, 11.6% QoQ (above our estimate of Rs 1552.9 crore) aided by better execution across segments. Energy segment revenue (~74% of revenue) grew 11.8% to Rs 1175.3 crore YoY while it was up 10.3% QoQ. Environment segment revenue grew 51.6% to Rs 301.8 crore and chemical segment revenue came in at Rs 119 crore, up 23.6%, YoY. EBITDA came in at Rs 139.6 crore, up 120% YoY and down 5.4% QoQ, aided by cost control measures and better execution amid higher raw material cost. Consequently, EBITDA margin came in at 8.9% (vs. our estimate of 9.9%). Adjusted PAT came in at Rs 107.3 crore, up 3.4% QoQ partly aided by higher other income and lower effective tax rate.


We expect revenue, EBITDA CAGR of 18.8%, 33.4%, respectively, in FY21-23E, amid low base. We revise our target price to Rs 1685 (earlier Rs 1310), 42x FY23E EPS and revise our rating from HOLD to BUY.