Thermax (THERMAX) Q4 01/02 earnings summary

Executive summary

• FY02 marked an operational turnaround: net profit was Rs 2,402 lacs versus a Rs 1,322 lac loss in FY01; EPS was Rs 10.32 versus negative Rs 5.69.

• Restructuring narrowed the portfolio to core energy and environment businesses; revenue held near prior-year levels despite a weak engineering market.

Financial highlights

• Total income was Rs 50,292 lacs versus Rs 50,446 lacs; profit before tax and extraordinary items was Rs 3,816 lacs versus a Rs 755 lac loss.

• Reported PBT after extraordinary items was Rs 3,075 lacs; PAT was Rs 2,402 lacs. Total income included Rs 609 lacs accrued from the TWTL amalgamation.

• Exports excluding trading rose 12.65% to Rs 10,521 lacs from Rs 9,340 lacs.

• Consolidated FY02 revenue was Rs 65,627 lacs and PAT after minority interest was Rs 2,761 lacs; EPS was Rs 11.87.

Outlook and guidance

• FY03 was positioned as a year of growth, with priorities including dealer-channel development, building services as a business and applying engineering expertise to new initiatives.

• Process Heat expected turnover to increase 10% through value-added services, export growth, improved customer reach and localised manufacturing.

• Water and Waste Solutions expected higher FY03 volumes as order backlog improved; municipal sewage treatment and targeted exports were growth opportunities.

• Absorption Cooling expected a stagnant domestic market but stronger activity in the US, Europe and Middle East; distributed-generation chiller demand was expected to grow at a double-digit pace over three years.

• Captive-power demand was expected to remain limited near term; slow power-sector reforms and restrictive captive-power policy were identified as constraints.