One of the mid-cap stocks engaged in providing sustainable energy and environmental solutions, including boilers, pollution control systems, and water treatment services, catering to industrial and infrastructure sectors globally. The stock jumped 3.82 percent after Jefferies gave a target of Rs. 6,100, which has an upside potential of 50.24 percent.
Stock Price Movement
In Thursday’s trading session, Thermax Limited’s share jumped to an intraday high of 3.82 percent from the previous close of Rs. 4060.15. The stock opened at Rs. 4116.80 and is currently trading at Rs. 4204.90, with a high of Rs. 4215.05 and a low of Rs. 4104.80. The market capitalization now stands at approximately Rs. 50,104.03 crore.
What is the news?
Jefferies has assigned a “buy” rating to Thermax Limited, with a target price of Rs 6,100. This target price reflects a 50.24 percent potential upside from the stock’s previous day close of Rs 4060.15.
Target Rational
Jefferies suggests that Thermax is well-positioned to capitalize on the increasing demand for captive power solutions, driven by a projected 13% compound annual growth rate (CAGR) in infrastructure and industrial capital expenditure from FY24 to FY27.
This growth contrasts sharply with the 6% CAGR observed from FY11 to FY20, indicating a significant shift towards enhanced energy independence and sustainability in industrial operations.
Products Offering
Thermax Limited’s key products include boilers, heaters, absorption chillers, power plants, solar equipment, air pollution control systems, and water recycling plants.
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Manufacturing Capacities
Thermax Limited operates 14 manufacturing facilities globally, with 10 located in India and 4 in countries such as Denmark, Germany, Poland, and Indonesia. These facilities are equipped to produce a range of products, including boilers, heat recovery systems, and air pollution control equipment.
Recent quarter results and ratios
Thermax Limited’s revenue has increased from Rs. 2,302 crore in Q2 FY24 to Rs. 2,612 crore in Q2 FY25, which has grown by 13.47 percent. The net profit of Thermax Limited has also grown by 24.53 percent, from Rs. 159 crore in Q2 FY24 to Rs. 198 crore in Q2 FY25.
Thermax Limited’s revenue and net profit have grown at a CAGR of 24.85 percent and 45.91 percent, respectively, over the last three years.
In terms of return ratios, the company’s ROCE and ROE should be 16.9 percent and 14.2 percent, respectively. The debt-to-equity ratio of the company is to be 0.32x, which shows the company is almost debt-free. Thermax Limited’s EPS is to be Rs. 62.2.
Company Overview
Thermax Limited was established in 1966 and headquartered in Pune, India. The company is a leading multinational engineering conglomerate. The company specializes in clean energy, clean air, and clean water solutions.
The company’s diverse portfolio includes boilers, heaters, power plants, solar equipment, air pollution control systems, water treatment plants, ion exchange resins, performance chemicals, and comprehensive services catering to the energy, environment, and chemical sectors.
Written By – Nikhil Naik
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