Prabhudas Lilladher has given Accumulate recommendation for Thermax with a target price of Rs. 1633 in its research report issued on Nov 13, 2021

Prabhudas Lilladher’s research report on Thermax

Thermax Ltd (TMX) reported healthy Q2FY22 performance, as execution momentum continued across Energy/Environment/Chemical and grew 19.4%/101.2%/12.4% YoY. Healthy ordering momentum in Refinery, O&G, chemical, F&B, pharma, cement etc, resulted in order inflows of Rs18.6bn (up 67% YoY). During the quarter TMX received its 1st order to set up Bio CNG plant, based on rice straw as a feedstock. Management indicated strong demand scenario across the sector, thereby providing healthy order inflows visibility going forward. Order book stands strong at Rs65.2bn (1.2x TTM revenue) providing good revenue visibility for next few quarters.


TMX is well placed to capitalize on reviving economic activities in the long run given its 1) strong balance sheet, 2) prudent working capital management and 3) steady order inflows with strong tender pipeline. The stock is currently trading at 47.6x/37.3x/33.2x FY22/FY23/FY24E. We roll over our TP to Sep’23 and maintain ‘Accumulate’ rating on stock with revised TP of Rs1,633 (Rs1,559 earlier).

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