11 Nov , 2021 By : Kanchan Joshi
Thermax Ltd, and energy and environment solutions company, has impressed the Street with its September quarter earnings.
A key positive takeaway for its investors was robust order inflows. Thermax's order inflows rose 67% year-on-year (y-o-y) to Rs1,860 crore and the order book improved 26% y-o-y to Rs6,520 crore. According to the company's management, this is the highest order booking in the last eight quarters.
Thermax has received a Rs293 crore worth of order for a refinery and petrochemical complex in India. Further, the management said enquiry pipeline from refinery, cement and metal sectors continues to be strong.
Reacting to the earnings, shares of the company rose 10% on the National Stock Exchange in opening deals on Thursday.
Another highlight of its Q2FY22 earnings was its in-line operating performance, analysts said. Gross margin was stable y-o-y at 45% and a strong operating leverage led to around 40% rise in Ebitda with operating margins at 7.5%, up 50 basis points y-o-y. One basis point is one hundredeth of a percentage point. Ebitda is short for earnings before interest, tax, depreciation and amortization.
As for other earnings parameters, revenue at Rs1,470 crore, up 29% y-o-y, largely met analysts' expectations. However, the two-year revenue CAGR stood at -4%, analysts at Motilal Oswal Financial Services Ltd said. CAGR is short for compounded annual growth rate.
Sharing demand outlook, the management said industrial sectors such as food, pharma, oil & gas refinery and chemical continues to perform well.
In Q2 2021, the enquiry pipeline in domestic operations improved across industry segments with an improving enquiry pipeline in export markets.
On the flipside, the management noted that the commodity prices stayed high and remains a key concern for the industry. Steel prices continued to remain high thus increasing input cost. Also, raw material costs, including those of chemical, stayed higher. Ocean freight have increased three to four times due to the rise in fuel prices and domestic diesel prices have also increased during the quarter, the management said.
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