Thermax (THERMAX) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 revenue declined 2% year-over-year to Rs. 2,150 crore due to project delays, early rains, and execution challenges, marking the first sequential drop in three years.

• Order booking increased 7% year-over-year to Rs. 2,748 crore, with order balance also up 7% to Rs. 11,376 crore.

• Profit before tax rose 31% to Rs. 211 crore and net profit increased 39% to Rs. 151 crore, aided by a one-time Rs. 56 crore government incentive.

• Growth was driven by large orders in Industrial Infra and improved performance in Green Solutions.

Financial highlights

• PBT margin improved to 9.8% from 7.4% year-over-year; PAT margin rose to 7% from 5%.

• Margins improved by 1.2% year-over-year, excluding the government incentive.

• Industrial Products segment saw both revenue and margin declines, but a strong backlog is expected to support future profitability.

• Chemicals business margins dropped to 9.3% from 12-13% due to new capacity, higher costs, and one-off items; expected to recover in Q2.

• Cash and investments stood at Rs. 3,161 crore, up 7% year-over-year.

Outlook and guidance

• Management remains bullish for FY26, expecting steady and profitable growth in Industrial Products and a rebound in Chemicals, barring prolonged U.S. tariff impacts.

• Double-digit order inflow growth is anticipated, with a strong pipeline in Industrial Infra and international markets.

• Manufacturing PMI averaged 58.1 in Q1 2026, up from 57.4 in Q4 FY25, indicating robust market sentiment.

• New products (ZLD, heat pumps, electric boilers) now contribute about 20% of Industrial Products and are expected to drive growth above 15% CAGR.