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Thermax Expects Revenues to Fall in Next Fiscal

  • India's Thermax Ltd. , an energy and environment solutions provider, expects revenues to decline in the first few quarters of the next fiscal year hurt by sluggish growth in orders in key segments, its managing director said.The company, however, expects order bookings in steel, cement and oil & gas sectors to pick up in the second half of 2012/13, but does not expect any traction from the battered power sector, M.S. Unnikrishnan told analysts in a conference call.He said that revenues for the full fiscal year that begins April 1 will not be "substantially" lower than what will be clocked in the current fiscal.
  • Revenues for April-December rose 16 percent to 36.17 billion rupees."Next year is going to be challenging for not only Thermax, but for entire capital goods industry," Unnikrishnan said.Thermax, which depends on orders from capacity expansion in core industrial sectors for its revenue, had seen a sluggish trend in the finalization of orders during the September and December quarters, he said.India's core sectors including power, steel and cement have been facing rough headwinds. Delays in policy making, lower supply of key raw materials, such as coal and iron-ore, higher interest rates, slower-than-expected approvals for projects have hurt finalisation of new projects, in turn hurting capital goods makers.
  • The Pune-based company, on late Thursday, posted a 5 percent fall in its net profit to 950 million rupees on a total operating revenue of 12.7 billion rupees.Thomson Reuters Starmine estimated Thermax' net profit at 1.06 billion rupees, and revenue at 13.24 billion rupees.The company added fresh orders worth 5.9 billion rupees in October-December -- 40 percent lower on year -- due to a slowdown in project activity, Unnikrishnan told Reuters."There are no orders of larger size, not a single order of 100 crore (1 billion rupees) and above got finalised," he said.
  • The company saw its sixth sequential quarterly decline in order additions during the quarter, that has led to 19 percent decline in its order backlog, Goldman Sachs said in its report on Friday.It downgraded the stock, which has lost close to half its value on the exchanges in 2011, to 'sell' from 'neutral'."...(The) order inflow prospects continue to deteriorate due to structural problems in the power sector and slowing industrial capex," Goldman Sachs said.
  • The consolidated order backlog of Thermax fell 23.15 percent to 58.09 billion rupees at the end of December quarter, the company said in a statement on Thursday.Shares fell as much as 6.4 percent on Friday. At 1:53 p.m. (07:48 GMT), they were up 2.6 percent at 518.90 rupees, in line with a recovery in broader markets.Thermax, which is at present valued at $1.23 billion, lost close to half its value on the exchanges in 2011.

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