Kotak Institutional Equities has retained buy rating on Thermax and revised fair value down to Rs 870 from Rs 1,140.
Shares of Thermax ended down 0.6 per cent at Rs 757 on Monday while the BSE Sensex closed 1375.27 points down (-4.61 per cent) at 28,440.32.Thermax Ltd., incorporated in 1980, has a market cap of Rs 9020.73 crore.Investment RationaleThermaxs recent concall suggests a virtual shutdown of operations, constraints to restarting work and a demand profile that may take long to stabilise, the brokerage said.
From a competitive perspective, the brokerage takes comfort from(1) large cash position and commitment to prioritise cash over revenues, (2) recent entry into new markets and (3) ability to scale-up execution as seen over the past few quarters.
FinancialsThermax's key products/revenue segments include Sale of services which contributed Rs 323.47 crore to sales value (9.13 per cent of total sales); Export Incentives which contributed Rs 35.69 crore to sales value (1.00 per cent of total sales); Scrap which contributed Rs 9.45 crore to sales value (0.26 per cent of total sales); Commission which contributed Rs 3.17 crore to sales value (0.08 per cent of total sales); Royalty Income which contributed Rs 2.85 crore to sales value (0.08 per cent of total sales) and Other Operating Revenue which contributed Rs 1.52 crore to sales value (0.04 per cent of total sales) for the year ending March 31, 2019.
For the quarter ended December 31, 2019, the company reported consolidated sales of Rs 1410.05 crore, down -12.19 per cent from last quarter sales of Rs 1605.85 crore and down -1.85 per cent from last year same quarter sales of Rs 1436.60 crore.
The company reported net profit after tax of Rs 84.96 crore in latest quarter.