Thermax - Order Pipeline Moderates, But Remains Stable: ICICI Securities

ICICI Securities Report

We believe Thermax Ltd. is a key beneficiary of the government’s increasing thrust on clean energy and de-carbonisation initiatives, as well as visibility on private capex.

Thermax’s strengths are in its technical expertise, strong balance sheet and prudent working capital management. Order inflow continues to be strong as seen from the 97% / 22% YoY growth in FY22 / H1 FY23, led by both base and large orders from inter alia refinery, steel, cement and flue gas desulfurization sectors.

However, going ahead, with enquiry pipeline plateauing in the large-order space (mainly from refineries), growth is likely to be driven by base orders from steel, sponge iron, cement (waste heat recovery), biomass energy, and sugar industries among others.

We believe, with increasing share of the base business, execution momentum is likely to sustain. We expect a revenue compound annual growth rate of 19% over FY22- FY25E.

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