Thermax Meets expectations; Retain Accumulate :Emkay

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Thermax

Meets expectations; Retain Accumulate

ACCUMULATE

CMP: Rs 425                                       Target Price: Rs 495

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n     Meets expectations – (1) Revenue up 19% yoy to Rs13.0 bn (2) EBITDA% down 100 bps yoy to 10.8% - due to high RM prices (3) APAT up 19% yoy to Rs1.0 bn

n     Order inflow momentum sustains – amongst few in ECG universe. Bags Rs12.8 bn orders (YTD 49% of FY12E target). Order book at Rs65.3 bn

n     Shares not-encouraging outlook – (1) Pressure on EBITDA margins to continue (2) Subdued order inflows in near-term

n     Already factored above concerns in our earnings estimates. Trading at attractive valuations of 11.8X FY13E – but no near term re-rating catalysts. Have Accumulate rating. TP Rs495