Q3FY19 result highlights
Key positives: Strong execution
Key negatives: Weak margin profile, sustained losses at Danstoker
Impact on financials: No change - FY19E/20E EPS at Rs26.7/Rs32.6
Valuations & view
Thermax continues to focus on its core strength in products by widening product offering and expanded capacities. Further it has widened its presence in international markets by setting up a plant in Indonesia. We believe these steps will aid order wins. However, lack of broad based capex cycle recovery and competitive intensity is likely to drive muted growth in inflows. Accordingly, we believe valuations at 32.5x FY20E earnings captures near term earnings
Thermax is engaged in the manufacture and development of a range of products and solutions in heating, cooling and power generation. In addition, Co. is engaged in the provision of water treatment, waste management and air pollution controlling services and the manufacture of related fuel and water chemicals. Co., through its subsidiaries, is engaged in the manufacture and sale of industrial boilers suitable for various fuels, CFBC boilers for power plants; painting equipment; measuring, checking and pressure instruments; process control and regulating instruments; and provision of lease, hire purchase, bill discounting and other finance related services.
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