Q4FY19 consolidated result highlights
Impact on financials: Cut our FY20E/21E EPS by 4/10% to at Rs31/Rs38
Valuations & view
Overall, FY19 has been a strong year in a weak environment led by uptick in execution of large order wins in FY18. Thermax continues to focus on its core strength 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 (we expect a gradual recovery) and competitive intensity is likely to drive muted inflows (lack of visibility of large order wins). Accordingly, we believe valuations at 26x FY21E earnings captures near term earnings momentum (18% CAGR over FY19-21E). Maintain Neutral.​
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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