Thermax
Thermax
Capital GoodsKey Fundamentals
MidcapElectrical EquipmentCapital GoodsTapetide Score
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Key Insights
Weaknesses
3- Stock is trading at 7.22 times its book value
- Company has a low return on equity of 11.5% over last 3 years.
- Earnings include an other income of Rs.331 Cr.
Growth Rate
AI Analysis — Bull vs Bear
Thermax Ltd is an energy and environment solutions company with a market capitalisation of about Rs 40,494 Cr. It trades at a P/E of 68.7x and a P/B of 7.31x. Sales have compounded at 18% over 5 years and 10% over 3 years, but TTM sales growth has slowed to 5% and TTM profit has fallen 18%. Return on equity has stayed in a narrow 10-12% band over 3, 5 and 10 years, and earnings include Rs 331 Cr of other income.
- Revenue has compounded at 18% over 5 years, well above the 10-year sales CAGR of 8%, which suggests demand in its core segments picked up over the recent cycle.
- Profit has also compounded at 18% over 5 years, matching sales growth. This shows the company converted top-line expansion into earnings across that period.
- The stock has delivered a 20% CAGR over 5 years and 15% over 10 years, a long record of value creation for shareholders.
- Sales still grew 10% a year over the last 3 years, so the business kept expanding at double digits even as the growth rate eased from the 5-year level.
- ROE has held steady at 10-12% across the 3-year (12%), 5-year (11%) and 10-year (10%) periods. Returns have been stable rather than volatile, and the 3-year figure of 12% is the highest of the three.
- Rs 331 Cr of other income points to a meaningful treasury or investment base. This gives the company balance-sheet flexibility to fund capex or working capital in energy transition businesses.
- The 0.59% dividend yield shows the company returns cash to shareholders while still reinvesting for growth.
- At a P/E of 68.7x, the valuation leaves little margin for error, especially when TTM profit growth is -18%.
- TTM profit fell 18% while TTM sales grew 5%. The gap suggests margin compression or execution problems in recent quarters.
- The stock trades at 7.31-7.40x book value while 3-year ROE averages about 11.5%. That is a large premium relative to the returns the company earns on its equity capital.
- TTM sales growth of 5% is well below the 5-year CAGR of 18% and the 3-year CAGR of 10%, a sign that top-line momentum is slowing.
- Other income of Rs 331 Cr makes up a notable share of reported earnings. Core operating profitability may therefore be weaker than headline profit suggests.
- The stock returned only a 4% CAGR over 3 years and 8% over 1 year, far below its 5-year CAGR of 20%. Recent shareholder returns have been subdued.
- Over 10 years, sales grew at an 8% CAGR and profit at 7%. The strong 5-year figures may partly reflect a cyclical upturn rather than a structural rise in growth.
- The 0.59% dividend yield offers limited income support if the valuation multiple compresses.
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
- Q1 profit plunges 83% YoY Sep 4
Thermax's first-quarter profit fell 83% year-on-year, mainly because of cost overruns on a legacy government project. The profit drop is the clearest sign of weak execution in the current period.
- Shipping and steel cost pressure Sep 4
Shipping costs went up because of the Gulf conflict, and steel prices also rose, squeezing Q1 margins. These input-cost pressures could keep weighing on profitability if they continue.
- 10+ bio-CNG plants annually planned Sep 4
Thermax expects to commission more than 10 bio-CNG plants a year over the next 2-3 years, up from 4 plants it runs now. MD and CEO Ashish Bhandari said this could bring in ₹1,000-1,500 crore in annual order inflows, helped by government price hikes and Gobardhan scheme incentives.
- Order backlog above ₹14,000 crore Sep 4
Thermax's order backlog is over ₹14,000 crore. Management expects the revenue run-rate to get stronger through the rest of the financial year.
- Data centre and thermal tailwinds Sep 4
Data centre-linked orders make up 5-10% of the order book, and the US is the biggest opportunity. Bhandari also compared India's current thermal power capex cycle to the 2008-2012 power boom.
- Botswana sub-subsidiary incorporated Sep 15
Thermax's subsidiary TECC has set up a wholly owned unit called Thermax Botswana Proprietary Limited. This gives Thermax a corporate presence in Botswana.
- SBI MF trims stake to 5.6% Sep 5
SBI Mutual Fund sold 7,776 Thermax shares in the market on September 3, 2026, bringing its holding down to 5.5957%. The sale is small and does not point to a major change in institutional sentiment.
TL;DR: Thermax's near-term earnings are under real pressure: Q1 profit fell 83% YoY because of legacy project cost overruns, higher Gulf-linked shipping costs and rising steel prices. Demand still looks solid, with an order backlog above ₹14,000 crore and three named growth drivers: data centres, India's thermal power capex cycle and bio-CNG, which could add ₹1,000-1,500 crore in annual orders. Earnings are weak right now, but the medium-term order pipeline is getting better. Whether the stock recovers depends on how well legacy project issues are wrapped up and whether margins improve over the rest of FY27.
Quarterly Results
| Particulars | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 1,933 | 2,302 | 2,324 | 2,764 | 2,184 | 2,616 | 2,529 | 3,046 | 2,158 | 2,474 | 2,635 | 3,428 | 2,303 |
| Expenses | 1,801 | 2,098 | 2,137 | 2,491 | 2,044 | 2,338 | 2,340 | 2,747 | 1,933 | 2,302 | 2,380 | 3,054 | 2,234 |
| Operating Profit | 132 | 204 | 187 | 273 | 141 | 278 | 188 | 300 | 225 | 172 | 255 | 374 | 69 |
| OPM % | 7% | 9% | 8% | 10% | 6% | 11% | 7% | 10% | 10% | 7% | 10% | 11% | 3% |
| Other Income | 2 | 66 | 185 | 55 | 84 | 60 | 32 | 78 | 66 | 85 | 121 | 56 | 68 |
| Interest | 13 | 20 | 27 | 28 | 27 | 29 | 29 | 31 | 30 | 32 | 34 | 42 | 35 |
| Depreciation | 29 | 33 | 36 | 50 | 36 | 42 | 35 | 45 | 49 | 51 | 53 | 54 | 60 |
| PBT | 91 | 217 | 309 | 251 | 161 | 266 | 156 | 301 | 211 | 174 | 289 | 334 | 42 |
| Tax % | 34% | 27% | 23% | 25% | 32% | 26% | 27% | 32% | 28% | 31% | 29% | 27% | 48% |
| Net Profit | 60 | 159 | 237 | 188 | 109 | 198 | 114 | 206 | 151 | 119 | 205 | 244 | 22 |
| EPS in Rs | 4.94 | 13.24 | 20 | 15.97 | 9.72 | 16.54 | 9.73 | 17.27 | 12.79 | 10.04 | 17.14 | 20.5 | 2.12 |
Profit & Loss
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 5,304 | 5,145 | 4,483 | 4,465 | 5,973 | 5,731 | 4,791 | 6,128 | 8,090 | 9,323 | 10,387 | 10,774 | 10,839 |
| Expenses | 4,842 | 4,712 | 4,049 | 4,088 | 5,516 | 5,331 | 4,435 | 5,715 | 7,489 | 8,526 | 9,477 | 9,736 | 9,970 |
| Operating Profit | 462 | 433 | 434 | 377 | 457 | 401 | 356 | 414 | 601 | 797 | 910 | 1,038 | 870 |
| OPM % | 9% | 8% | 10% | 8% | 8% | 7% | 7% | 7% | 7% | 9% | 9% | 10% | 8% |
| Other Income | 73 | 118 | 95 | 115 | 60 | 105 | 54 | 135 | 156 | 307 | 250 | 317 | 331 |
| Interest | 82 | 12 | 10 | 13 | 14 | 15 | 21 | 25 | 38 | 88 | 117 | 139 | 144 |
| Depreciation | 134 | 72 | 82 | 82 | 92 | 117 | 115 | 113 | 117 | 148 | 159 | 208 | 218 |
| PBT | 319 | 467 | 438 | 397 | 410 | 375 | 275 | 410 | 603 | 869 | 884 | 1,008 | 839 |
| Tax % | 54% | 31% | 36% | 42% | 21% | 43% | 25% | 24% | 25% | 26% | 29% | 29% | — |
| Net Profit | 148 | 282 | 216 | 231 | 325 | 212 | 207 | 312 | 451 | 643 | 627 | 720 | 591 |
| EPS in Rs | 17.6 | 23.69 | 18.72 | 19.48 | 27.31 | 17.83 | 17.34 | 26.21 | 37.79 | 54.15 | 53.25 | 60.47 | 49.8 |
| Div. Payout % | 40% | 24% | 30% | 29% | 24% | 37% | 38% | 32% | 25% | 21% | 25% | 3% | — |
Balance Sheet
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 24 | 23 | 23 | 23 | 23 | 23 | 23 | 23 | 23 | 23 | 23 | 23 |
| Reserves | 2,123 | 2,394 | 2,515 | 2,692 | 2,992 | 3,005 | 3,229 | 3,470 | 3,846 | 4,417 | 4,914 | 5,527 |
| Borrowings | 688 | 195 | 136 | 234 | 240 | 230 | 328 | 368 | 831 | 1,277 | 1,718 | 2,353 |
| Other Liabilities | 3,255 | 2,554 | 2,371 | 2,980 | 3,535 | 2,693 | 2,921 | 3,598 | 4,137 | 4,424 | 4,728 | 5,339 |
| Total Liabilities | 6,089 | 5,166 | 5,044 | 5,929 | 6,790 | 5,951 | 6,500 | 7,458 | 8,836 | 10,141 | 11,382 | 13,242 |
| Fixed Assets | 1,431 | 827 | 811 | 973 | 1,312 | 1,283 | 1,242 | 1,195 | 1,248 | 1,906 | 2,806 | 3,048 |
| CWIP | 43 | 60 | 141 | 103 | 40 | 56 | 24 | 44 | 434 | 525 | 563 | 1,442 |
| Investments | 822 | 1,050 | 1,083 | 1,472 | 829 | 875 | 234 | 1,477 | 1,626 | 1,765 | 1,699 | 1,784 |
| Other Assets | 3,793 | 3,228 | 3,009 | 3,381 | 4,609 | 3,737 | 4,999 | 4,742 | 5,528 | 5,945 | 6,315 | 6,969 |
| Total Assets | 6,089 | 5,166 | 5,044 | 5,929 | 6,790 | 5,951 | 6,500 | 7,458 | 8,836 | 10,141 | 11,382 | 13,242 |
Cash Flow
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | 311 | 253 | 335 | 534 | -115 | 326 | 769 | 325 | 460 | 247 | 1,080 | 542 |
| Investing | 80 | -127 | -99 | -507 | 266 | -140 | -627 | -420 | -664 | -514 | -1,257 | -565 |
| Financing | -351 | -112 | -126 | -20 | -65 | -232 | 77 | -21 | 349 | 285 | 123 | 248 |
| Net Cash Flow | 39 | 13 | 110 | 7 | 85 | -47 | 220 | -115 | 144 | 19 | -55 | 224 |
| Free Cash Flow | 282 | 120 | 216 | 333 | -270 | 278 | 686 | 241 | -190 | -471 | 180 | -401 |
| CFO/OP | 98 | 98 | 114 | 188 | 16 | 114 | 243 | 103 | 102 | 54 | 139 | 86 |
Ratios
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 122 | 95 | 84 | 102 | 84 | 88 | 94 | 85 | 80 | 83 | 70 | 75 |
| Inventory Days | 55 | 39 | 46 | 57 | 56 | 54 | 58 | 76 | 60 | 53 | 45 | 60 |
| Days Payable | 135 | 126 | 162 | 161 | 150 | 114 | 164 | 153 | 118 | 107 | 107 | 135 |
| Cash Conversion Cycle | 42 | 7 | -32 | -3 | -10 | 28 | -11 | 8 | 21 | 29 | 9 | -1 |
| Working Capital Days | -20 | -12 | -7 | -40 | -4 | -7 | -50 | -44 | -39 | -24 | -36 | -40 |
| ROCE % | 14% | 18% | 18% | 15% | 17% | 12% | 10% | 12% | 15% | 17% | 14% | 14% |
Insights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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64 extracted metrics + investor summaries across FY03–FY27.
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Company Information
Thermax Limited offers solutions to energy, environment and chemical sectors. The Company’s portfolio includes boilers and heaters, absorption chillers/ heat pumps, power plants, solar equipment, air pollution control equipment/system, water and waste recycle plant, ion exchange resins and performance chemicals and related services. [1]
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