Thermax (THERMAX) Q1 26/27 earnings summary

Executive summary

• Q1 FY27 was challenging, with profitability hit by a Rs. 91 crore cost overrun in a legacy government/Industrial Infra project, shipping delays, and losses in Green Solutions and Bio-CNG businesses.

• Order booking rose 2% year-over-year to Rs. 2,809 crore, and order balance increased 23% to Rs. 14,045 crore, driven by strong performance in TBWES, Industrial Products, and Green Solutions.

• Operating revenue grew 7% year-over-year to Rs. 2,303 crore, but profit before tax dropped 80% to Rs. 42 crore and profit after tax declined 85% to Rs. 22 crore.

• Management remains optimistic for the full year, citing a strong backlog, improving order pipeline, and expected margin recovery as legacy issues are resolved.

Financial highlights

• Revenue for Q1 FY27 was Rs. 2,303 crore, up 7% year-over-year, but profitability was sharply impacted by a Rs. 91 crore project cost overrun and losses in Green Solutions (Rs. 20 crore) and Bio-CNG (Rs. 8 crore).

• Profit before tax was Rs. 42 crore, down 80% year-over-year; profit after tax was Rs. 22 crore, down 85%.

• Cash and investments stood at Rs. 3,231 crore, up 2% year-over-year.

• Standalone revenue rose to Rs. 1,303 crore, but the quarter ended with a net loss of Rs. 18 crore.

• Industrial products segment faced margin pressure from commodity price increases and shipping delays.

Outlook and guidance

• Management expects Q2, Q3, and Q4 to show significant improvement as legacy projects wind down and shipping normalizes.

• Order inflow for FY27 is expected to exceed last year, with strong pipelines in industrial infra, international, and data center segments.

• Data center investments are accelerating, supporting demand for power, cooling, and efficiency solutions.

• EBITDA margin for industrial infra is targeted at 10%+ post-legacy project completion.

• Management expects improved operational efficiencies and profitability from ongoing restructuring and segment realignment.