Motilal Oswal is bullish on Thermax has recommended buy rating on the stock with a target price of Rs 1240 in its research report dated February 11, 2019.
Motilal Oswal's research report on Thermax
Sales grew 29% YoY to INR14.4b (v/s our est. of INR13.4b). Gross margin shrank 220bp YoY to 45.2%. EBIDTA increased 12.4% YoY to INR1.1b (below our est. of INR1.2b), with margin contracting 110bp YoY to 7.5%. Adjusted net profit grew 11% YoY to INR652m (Adjusted for (a) INR0.9b of deferred tax for TBW recognized during the quarter, and (b) INR875m write-down for goodwill impairment in its Netherland subsidiary (our est. INR0.8b).
Outlook
We maintain our Buy rating with a TP of INR1,240 (30x December20E EPS in line with its 5-year average multiple of 30x, given the improving domestic end-market outlook).
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