Thermax Ltd, a leader in the energy, environment, and chemical sectors, has been on a remarkable journey. As we delve into Thermax’s share price predictions, it’s important to understand how its recent expansion and groundbreaking projects open doors for potential investors.
Thermax Ltd’s stock performance has been impressive, offering stability and long-term investment potential. Additionally, as the company ventures into new areas like renewable energy and the growing hydrogen market, it’s poised for a promising future.
Committed to clean energy and sustainability, Thermax’s recent projects and collaborations, including a government contract and international Memorandums of Understanding (MoUs), further highlight its role in a greener future.
This article explores the factors behind Thermax’s strong stock performance and offers insights for potential investors looking to join them on their promising journey. Specifically, we’ll dissect their expansion efforts, project successes, and the broader economic landscape to provide valuable predictions.
About Thermax Limited
Thermax Limited is a pretty versatile company, and they’re big players in the energy, environment, and chemical fields. They’ve got a whole bunch of things in their toolkit, like boilers, heaters, cool absorption chillers, power plants, systems to fight air pollution, water treatment solutions, and a bunch of performance chemicals.
Their energy segment is where the action is, raking in a whopping 71% of their revenue. They’re pretty famous for their vapor absorption cooling and heating systems. Not to mention, they’re the go-to guys for setting up power plants, with a whopping 3,500 MW already in action.
In the environment department, which makes up about 21% of their revenue, they’ve got you covered for air pollution control and water treatment solutions. They’re all about making the world a cleaner, greener place.
And they didn’t forget the chemicals! Their chemical segment chips in with about 9% of their revenue, and they’ve got specialty chemicals for all sorts of industries.
Thermax doesn’t just do business in India; they’re all over the place. They’ve got manufacturing facilities in 10 spots in India and 4 overseas, serving more than 90 countries. They’re not ones to sit still, always coming up with new stuff like Absorption Cooling and landing big orders.
They’ve even jumped into the renewable energy game by creating step-down subsidiaries to launch the renewable energy business of First Energy Private Limited (FEPL). It’s all part of their commitment to a cleaner, more sustainable future.
Thermax Limited Q1 FY 2024 Key Points And Summary
- Order Book: The Thermax holds a substantial order book balance of 10,505 crores.
- Operating Revenue: Thermax’s operating revenue for the current period is 2,567 crores. It has seen a 2% growth from Q1 FY 2022-23.
- Profit Before Tax (PBT): PBT for the same period stood at 1,933 crores, indicating improved profitability.
- Cash and Investments: The company maintains 142 crores in cash and investments, ensuring financial stability.
- Profit After Tax (PAT): PAT for Thermax reached 60 crores, with a 7% growth, though it was impacted by a 51 crore litigation provision.
- An increase in revenue was noticed across all of its business segments
Recent News
- Energy and environmental solutions provider Thermax took a significant step into the emerging green hydrogen market. It is an attempt to forge a strategic partnership with Australia-based Fortescue Future Industries (FFI). (10 March)
- Venturing into Sustainable Energy Solutions, Thermax Launches Open Access-Based Renewable Projects Across Gujarat, Tamil Nadu, and Maharashtra, with Approximately 250 MW in Various Stages of Development. (28 June)
- Promoters: Promoters consistently own the majority at around 61.98% in Thermax.
- FIIs: Foreign institutional investors (FIIs) saw fluctuations, reaching 12.54% in September 2023.
- DIIs: Domestic institutional investors for Thermax increased their stake to 15.46% by September 2023.
- Public: Public shareholding varied but remained in the 4.54% to 7.18% range.
- Others: Thermax’s “Others” category has stable shareholding, around 5.48% to 5.49%.
- Shareholders: The number of shareholders increased from 28,144 in March 2017 to 35,616 in September 2023, indicating growing interest.
The shareholding pattern reflects the stability of promoters’ control, varying trends in institutional ownership, and modest fluctuations in public participation. The increasing number of shareholders suggests a growing interest in the company’s shares, potentially driven by its performance and attractiveness to a wider investor base.
| When | Maximum Price | Minimum Price |
| November 2023 | ₹3,221.03 | ₹2,928.21 |
| December 2023 | ₹3,327.32 | ₹3,024.84 |
Over the last 2 -2-month span of November, and December 2023, the anticipated share price for Thermax Ltd shows an uptrend. Specifically, the Thermax share price oscillates between a peak of ₹3,327.32 and a low of ₹2,928.21 during this timeframe.
| When | Maximum Price | Minimum Price |
| January 2024 | ₹3,395.23 | ₹2,952.37 |
| February 2024 | ₹3,464.52 | ₹3,012.62 |
| March 2024 | ₹3,535.22 | ₹3,074.11 |
| April 2024 | ₹3,432.26 | ₹2,984.57 |
| May 2024 | ₹3,381.53 | ₹2,940.46 |
| June 2024 | ₹3,503.27 | ₹3,046.32 |
| July 2024 | ₹3,468.23 | ₹3,015.86 |
| August 2024 | ₹3,606.96 | ₹3,136.49 |
| September 2024 | ₹3,751.24 | ₹3,261.95 |
| October 2024 | ₹3,677.69 | ₹3,197.99 |
| November 2024 | ₹3,788.02 | ₹3,293.93 |
| December 2024 | ₹3,882.72 | ₹3,376.28 |
- In 2024, the expected maximum for Thermax’s share price for the year is ₹3,882.72.
- Conversely, the expected minimum share price for the year is ₹2,940.46.
In 2024, Thermax Ltd’s stock is projected to continue an uptrend, with the expected share price ranging from a maximum of ₹3,882.72 to a minimum of ₹2,940.46.
Investors should stay alert, as the share price is likely to fluctuate between these two extremes. Monitoring market factors and trends will be crucial, as the stock is expected to have its share of ups and downs in the upcoming year.
| When | Maximum Price | Minimum Price |
| January 2025 | ₹3,960.37 | ₹3,046.44 |
| February 2025 | ₹4,061.92 | ₹3,124.56 |
| March 2025 | ₹4,220.34 | ₹3,246.41 |
| April 2025 | ₹4,137.59 | ₹3,182.76 |
| May 2025 | ₹4,017.07 | ₹3,090.06 |
| June 2025 | ₹4,197.84 | ₹3,229.11 |
| July 2025 | ₹4,115.53 | ₹3,165.79 |
| August 2025 | ₹4,242.82 | ₹3,263.70 |
| September 2025 | ₹4,391.31 | ₹3,377.93 |
| October 2025 | ₹4,505.49 | ₹3,465.76 |
| November 2025 | ₹4,618.13 | ₹3,552.40 |
| December 2025 | ₹4,733.58 | ₹3,641.21 |
- In January 2025, Thermax’s maximum expected share price is ₹3,960.37, while the minimum is ₹3,046.44.
- In December 2025, the highest expected share price is ₹4,733.58, and the lowest is ₹3,641.21.
The year begins with Thermax’s maximum share price for January at ₹3,960.37, while the minimum is at ₹3,046.44. However, by December, the maximum share price is expected to reach ₹4,733.58, with the minimum at ₹3,641.21.
| Year | Maximum Price (₹) | Minimum Price (₹) |
|---|---|---|
| 2026 | ₹4,970.26 | ₹3,479.18 |
| 2027 | ₹5,467.28 | ₹3,827.10 |
| 2028 | ₹7,654.20 | ₹3,827.10 |
| 2029 | ₹6,627.01 | ₹3,313.51 |
| 2030 | ₹8,615.11 | ₹6,030.58 |
- In 2026, Thermax anticipates its shares to reach a maximum of ₹4,970.26 and a minimum of ₹3,479.18.
- As we move into 2027, there’s a further upswing, with the maximum share price hitting ₹5,467.28 and the minimum at ₹3,827.10.
- Fast forward to 2028, and there’s a significant leap in prices. The maximum price soars to ₹7,654.20, while the minimum stays steady at ₹3,827.10.
- In 2029, we observe the maximum at ₹6,627.01 and the minimum at ₹3,313.51.
- However, 2030 marks a turning point, with Thermax’s expected share price hitting a high of ₹8,615.11, while the minimum rests at ₹6,030.58.
Thermax Limited Financial Condition (Last 5 Years)
| Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | |
| Sales + (Crore Rs.) |
5,973 | 5,731 | 4,791 | 6,128 | 8,090 |
| Expenses + (Crore Rs.) |
5,516 | 5,331 | 4,435 | 5,715 | 7,489 |
| Operating Profit (Crore Rs.) |
457 | 401 | 356 | 414 | 601 |
| OPM % | 8% | 7% | 7% | 7% | 7% |
| Other Income + (Crore Rs.) |
60 | 105 | 54 | 135 | 156 |
| Interest (Crore Rs.) |
14 | 15 | 21 | 25 | 38 |
| Depreciation (Crore Rs.) |
92 | 117 | 115 | 113 | 117 |
| Profit before tax (Crore Rs.) |
410 | 375 | 275 | 410 | 603 |
| Tax % | 21% | 43% | 25% | 24% | 25% |
| Net Profit + (Crore Rs.) |
325 | 212 | 207 | 312 | 451 |
| EPS in Rs | 27.31 | 17.83 | 17.34 | 26.21 | 37.79 |
| Dividend Payout % | 24% | 37% | 38% | 32% | 25% |
- Sales Growth: Thermax’s Sales have shown a consistent growth trajectory over the years, with a substantial increase from 5,973 in March 2019 to 8,090 in March 2023.
- Operating Profit: Furthermore, the operating profit has also experienced growth, reaching 601 in March 2023. Thermax’s consistent improvement suggests effective cost management and operational efficiency.
- Other Income: Other income has shown some fluctuation but generally increased over the years. In March 2023, it reached 156, potentially contributing to the overall profit.
- Interest and Depreciation: Interest and depreciation expenses have increased over the years, reflecting the company’s investments and capital expenditures.
- Tax Efficiency: The tax percentage for Thermax has been relatively stable, staying within the range of 24% to 43%. Maintaining a stable tax rate is important for financial planning.
- Net Profit and Earnings Per Share (EPS): Notably, the net profit has shown steady growth, reaching 451 in March 2023. Correspondingly, the EPS has increased from 27.31 in March 2019 to 37.79 in March 2023, reflecting improved earnings per share.
- Dividend Payout: The dividend payout percentage has been relatively stable, indicating a consistent approach to returning profits to shareholders.
In summary, Thermax has demonstrated consistent growth in sales, profitability, and earnings per share over the five-year period. The stability in operating profit margins and the effective management of expenses suggest a balanced approach to financial performance. However, it’s essential to monitor interest and depreciation expenses, which have been on an upward trajectory, to ensure they are in line with Thermax’s growth strategy.
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FAQs
What Is the Market Valuation of Thermax Ltd?
The market capitalization of Thermax Ltd is ₹32,792 crore.
Thermax’s target share prices for the year 2023 range from ₹2,928.21 to ₹3,327.32.
Thermax share price target for the year 2025 is expected to range from ₹3,046.44 to ₹4,733.58.
We expect Thermax’s share price target for 2030 to trade in the range from ₹6,030.58 to ₹8,615.11.
What Is the Stock P/E Ratio of Thermax?
The stock’s Price-to-Earnings (P/E) ratio is 72.42, with a median P/E of 64.0. In my opinion, the company is slightly overvalued.
Should One Invest In Thermax Ltd?
Thermax Ltd presents a compelling case for potential investors, supported by robust statistics.
As of November 2, 2023, Thermax has a market capitalization of ₹32,790 Crores. The current stock price stands at ₹2,894, with a high/low range of ₹3,230 and ₹1,830. However, the stock price-to-earnings (P/E) ratio is relatively high at 72.42, indicating investor optimism and expectations. The book value per share is ₹325, and the dividend yield is 0.32%. The company’s return on capital employed (ROCE) is 15.1%, while the return on equity (ROE) is 12.3%. The face value of the stock is ₹2.00.
Furthermore, Thermax’s strategic alignment with emerging trends is a significant advantage. The company’s expansion into renewable energy and the hydrogen market aligns perfectly with the Indian government’s push for clean energy and sustainability. This forward-thinking approach places Thermax at the forefront of industries that are poised for substantial growth. As the world increasingly focuses on environmental improvement, decarbonization, and clean energy solutions, Thermax stands to benefit from these transformative trends.
However, there are some aspects that investors should be mindful of. The stock’s trading price is at a premium, currently valued at 9.64 times its book value. Additionally, the return on equity (ROE) has been relatively low at 9.86% over the last three years. These metrics indicate a higher valuation and slightly lower profitability compared to some other investments.
Moreover, there has been a slight decrease in promoter holding over the past three years. While this reduction is not significant, it’s worth monitoring, as strong promoter backing can be a sign of confidence in the company.
In conclusion, Thermax Ltd presents an appealing investment opportunity with robust statistics that reflect investor optimism and impressive performance. The company’s strategic alignment with clean energy and sustainability trends is a promising sign for future growth. For potential investors, a well-rounded assessment of the company’s financials, valuation, and alignment with their investment strategy is essential. With the right due diligence, Thermax offers an attractive avenue for those seeking long-term growth and stability in their investment portfolio.
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