Thermax (THERMAX) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 saw consolidated operating revenue rise 13% year-over-year to Rs. 2,184 crore, with profit after tax up 82% to Rs. 109 crore, reflecting recovery from last year's exceptional charge and improved margins.

• Order book remained stable at Rs. 10,681 crore, with no large orders booked in the quarter.

• Cash and investments stood at Rs. 2,955 crore.

• New manufacturing facility for water and wastewater solutions launched in Pune; 51% stake acquired in TSA Process Equipments to strengthen water solutions portfolio.

• Management expects normalization in industrial infra after significant one-time losses in bio-CNG and FGD projects, with growth anticipated in chemicals and industrial products.

Financial highlights

• Consolidated revenue: Rs. 2,184 crore (Q1 FY25) vs. Rs. 1,933 crore (Q1 FY24), up 13%.

• PAT rose 82% year-over-year to Rs. 109 crore; PBT increased 77% to Rs. 161 crore.

• PBT margin improved to 7.4% from 4.7% in Q1 FY24; PAT margin rose to 5.0% from 3.1%.

• Q1 included a total hit of INR 45 crore for bio-CNG projects, INR 8 crore for FGD, and INR 20 crore for a sulfur recovery unit, impacting EBIT and margins.

• Excluding these one-offs, EBIT could have been INR 60 crore positive for the quarter.

Outlook and guidance

• Management is bullish on large project order inflows over the next 2-3 years, especially in refining, petrochemicals, and power.

• Margins in industrial infra are expected to improve for the rest of the year, with no repeat of Q1's exceptional losses.

• Focus on expanding water and chemical solutions businesses, with new manufacturing and strategic acquisitions.

• International order pipeline continues to grow, with strong enquiry inflows in distillery, chemical, metal, F&B, biofuel, and power segments.

• Industrial products are expected to deliver double-digit growth, with further margin expansion anticipated.