Sharekhan's research report on Thermax
Our meeting with Thermax’ CFO – Mr. Rajendran Arunachalam provided us insights into company’s strategy to scale up its green energy offerings through existing verticals as well as opex based model in solar and biomass. Order backlog is at Rs. 9,859 crore and order intake expectations for small to mid-sized orders are high given strong enquiry flow from chemicals, pharmaceuticals, sugar, distilleries and water segments. OPM would improve led by better operating leverage, favorable product mix (more of products and services) and stability in commodity prices.
Outlook
We maintain a Buy on Thermax with an unchanged PT of Rs. 2,790, valuing the stock on its September 2024E EPS given multiple growth levers, healthy working capital cycle and balance sheet.
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