Accumulate Thermax, target price Rs 2556: Prabhudas Lilladher

Prabhudas Lilladher has accumulate call on Thermax with a target price of Rs 2556. The current market price of Thermax Ltd. is Rs 2258.05.

Thermax Ltd., incorporated in the year 1980, is a Mid Cap company (having a market cap of Rs 26875.70 Crore) operating in Engineering sector.

Thermax Ltd. key Products/Revenue Segments include Sale of services, Export Incentives, Scrap, Commission, Royalty Income and Other Operating Revenue for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 2115.09 Crore, up 26.27 % from last quarter Total Income of Rs 1675.02 Crore and up 40.44 % from last year same quarter Total Income of Rs 1506.07 Crore. Company reported net profit after tax of Rs 109.36 Crore in latest quarter.

Investment Rationale
TMX is well placed to gain from increasing thrust on clean energy & de-carbonization initiatives and broad base visibility in private capex given its 1) technical expertise, 2) strong balance sheet and 3) prudent working capital management. Given strong order book, better execution and likely margin revival, the brokerage expects TMX to report, revenue/PAT CAGR of 15.2%/28.9% between FY22-25E. Stock is currently trading at PE of 57x/45.8x/38.3x for FY23/24/25E.

Promoter/FII Holdings
Promoters held 61.98 per cent stake in the company as of 30-Sep-2022, while FIIs owned 14.39 per cent, DIIs 15.34 per cent.