Thermax has a buy rating and a target price of Rs. 3235 according to Sharekhan s research report from August 31, 2023, which is optimistic on the company.
Analysis of Thermax by Sharekhan
In the FY23 annual report, it is stressed that by diversifying its product line and broadening the breadth of its services and solutions, the company will be better able to capitalize on prospects in green energy on both domestic and international markets. In addition to the 2,000 crore rupee order backlog for the corporation, the domestic market’s mid-to-small order backlog is also promising in the near future. An order book worth Rs. 10,505 crore is maintained by Thermax. High profit, low capital intensive product and service businesses now account for 49% of order bookings, up from 38% in FY22.
Outlook
We continue to recommend buying Thermax with a revised price target of Rs. 3,235 because, in addition to its conventional business, we think that its new focus areas—the BOO model for wind and solar projects and new products in the chemicals industry—will produce returns over the long run. The revenue/PAT CAGR we include (FY23-FY26E) is 15%/29%, and we forward our forecasts to September FY25E EPS.
