THERMAX

 

EQUITY RESEARCH REPORT

Thermax Limited (NSE: THERMAX)

Date: April 15, 2025

1. EXECUTIVE SUMMARY

Recommendation: ACCUMULATE
Current Market Price: ₹3,420
Target Price: ₹4,050 (12-month horizon)
Upside Potential: 18.4%
Risk Rating: Moderate

Thermax Limited presents a compelling investment case as India's leading energy and environment solutions provider positioned to capitalize on the accelerating energy transition trends. The company's integrated offerings across energy generation, conservation, and environmental solutions create a robust competitive moat in an increasingly sustainability-focused market landscape.

Our positive stance is driven by: (1) the company's strategic pivot toward clean energy solutions, (2) strong order book visibility across diversified sectors, (3) expanding international footprint, (4) focus on profitable service business expansion, and (5) robust balance sheet providing firepower for both organic and inorganic growth initiatives.

With projected revenue and PAT CAGR of 14.2% and 19.5% respectively over FY25-30E, combined with improving operating margins and return ratios, we initiate coverage with an ACCUMULATE rating and a target price of ₹4,050, implying an 18.4% upside from current levels.

2. COMPANY OVERVIEW

2.1 Corporate Background

Thermax Limited, founded in 1966, has evolved into one of India's premier engineering solutions providers focusing on energy, environment, and chemical processes. Headquartered in Pune, Maharashtra, the company offers products, systems, and services for industrial and commercial applications across multiple sectors.

Key Corporate Information:

  • Incorporated: 1966
  • Promoter Holding: 61.98% (primarily held by the RDA Holdings & Trusts)
  • FII Holding: 14.86%
  • DII Holding: 12.25%
  • Public Holding: 10.91%
  • Market Capitalization: ₹40,782 crores
  • Enterprise Value: ₹38,570 crores

2.2 Business Segments

Thermax operates through three primary segments:

a) Energy Segment (64% of Revenue)

  • Product Portfolio: Boilers, heaters, captive power plants, waste heat recovery systems, solar solutions, biomass systems
  • Customers: Power generation, oil & gas, metals, cement, food & beverage, chemical
  • Growth Rate (FY25E): 15.2% YoY
  • EBITDA Margin (FY25E): 9.8%

b) Environment Segment (22% of Revenue)

  • Product Portfolio: Air pollution control systems, water & wastewater treatment, zero liquid discharge solutions
  • Customers: Power, steel, cement, mining, pharmaceuticals, textiles
  • Growth Rate (FY25E): 18.5% YoY
  • EBITDA Margin (FY25E): 10.5%

c) Chemical Segment (14% of Revenue)

  • Product Portfolio: Ion exchange resins, specialty chemicals, construction chemicals
  • Customers: Power, refineries, fertilizers, sugar, FMCG, pharmaceuticals
  • Growth Rate (FY25E): 12.8% YoY
  • EBITDA Margin (FY25E): 13.2%

2.3 Manufacturing Capabilities

Thermax operates 14 manufacturing facilities across India, China, Denmark, Germany, and Indonesia:

Indian Facilities:

  1. Pune, Maharashtra (3 plants): Boilers, pollution control equipment, chemicals
  2. Shirwal, Maharashtra: Large boilers and heaters
  3. Savli, Gujarat: Process heating equipment and absorption machines
  4. Dahej, Gujarat: Ion exchange resins and performance chemicals
  5. Solapur, Maharashtra: Modular auxiliary consumption boilers
  6. Sri City, Andhra Pradesh: Heat recovery steam generators and packaged boilers

International Facilities:

  1. Danstoker, Denmark: Shell and tube boilers, biomass boilers
  2. Rifox, Germany: Steam engineering products
  3. Jiangsu, China: Absorption chillers and vapor absorption machines
  4. Suzhou, China: Boilers and heaters
  5. Jakarta, Indonesia: Absorption chillers and heating systems

Total Production Capacity Highlights:

  • Boilers: 5,000+ MW equivalent per annum
  • Air Pollution Control Systems: Equipment for 30,000+ MW per annum
  • Water & Wastewater Treatment: 1,500+ MLD capacity per annum
  • Ion Exchange Resins: 35,000+ MT per annum

2.4 Research & Development

  • R&D Centers: 5 (Pune, Copenhagen, Solapur, Jakarta, Suzhou)
  • R&D Staff: ~350 engineers and scientists
  • R&D Spending: 1.5% of revenue (FY25E), targeted to reach 2.0% by FY30E
  • Key Focus Areas: Green hydrogen solutions, carbon capture technologies, waste-to-energy, digitalization

3. INDUSTRY OVERVIEW

3.1 Energy, Environment & Chemical Solutions Landscape

The global energy transition and industrial solutions market is estimated at $780 billion in 2025 and is projected to grow at a CAGR of 8.5-9.5% to reach approximately $1.2 trillion by 2030. The Asia-Pacific region, particularly India and Southeast Asia, is expected to grow at a faster pace of 12-14% CAGR.

Key Growth Drivers:

  1. Decarbonization Imperative: Net-zero commitments by countries and corporations driving clean energy adoption
  2. Resource Efficiency: Focus on reducing energy consumption and improving operational efficiency
  3. Circular Economy: Increased emphasis on water recycling and waste-to-value solutions
  4. Policy Support: Government initiatives promoting green technologies and sustainable practices
  5. Digital Transformation: Industrial IoT and analytics enhancing plant performance and service delivery

3.2 Market Opportunity Analysis

Energy Solutions

  • Market Size (FY25E): ₹85,000 crores (India)
  • Growth Forecast (CAGR FY25-30E): 12.8%
  • Key Demand Drivers: Industrial capacity expansion, captive power needs, waste heat recovery, renewable integration
  • Policy Tailwinds: Production-Linked Incentive (PLI) schemes, energy efficiency norms, carbon pricing mechanisms

Environmental Solutions

  • Market Size (FY25E): ₹42,000 crores (India)
  • Growth Forecast (CAGR FY25-30E): 16.5%
  • Key Demand Drivers: Stricter emission norms, water scarcity concerns, zero discharge requirements
  • Policy Tailwinds: Revised emission standards, National Clean Air Programme, treated water reuse mandates

Chemical Solutions

  • Market Size (FY25E): ₹28,000 crores (India, relevant segments)
  • Growth Forecast (CAGR FY25-30E): 10.5%
  • Key Demand Drivers: Power generation capacity addition, industrial water treatment, pharma expansion
  • Policy Tailwinds: Water quality standards, Make in India chemicals push

3.3 Competitive Landscape

The energy and environmental solutions space in India comprises a mix of large domestic players, MNCs, and specialized niche providers. Key competitors include:

Primary Competitors

  • Domestic: Larsen & Toubro (Energy), Siemens India, ISGEC Heavy Engineering, KEC International
  • Global: GE Power, Mitsubishi Power, Doosan Heavy Industries, Babcock & Wilcox

Environment Segment Competitors

  • Domestic: VA Tech Wabag, Ion Exchange India, Triveni Engineering
  • Global: Veolia, Suez, Evoqua Water Technologies

Chemical Segment Competitors

  • Domestic: Ion Exchange India, Nalco Water India
  • Global: DuPont Water Solutions, Lanxess, Purolite

4. FINANCIAL ANALYSIS

4.1 Historical & Projected Financial Performance

Revenue (₹ Crores)

Segment FY22 FY23 FY24 FY25E FY26E FY27E FY28E FY29E FY30E
Energy 4,560 5,388 6,205 7,148 8,363 9,616 10,962 12,388 13,875
Environment 1,352 1,649 2,010 2,382 2,882 3,458 4,081 4,734 5,445
Chemical 1,088 1,263 1,485 1,675 1,925 2,176 2,459 2,754 3,085
Total Revenue 7,000 8,300 9,700 11,205 13,170 15,250 17,502 19,876 22,405
Growth % 27.8% 18.6% 16.9% 15.5% 17.5% 15.8% 14.8% 13.6% 12.7%

EBITDA & Margins

Metric FY22 FY23 FY24 FY25E FY26E FY27E FY28E FY29E FY30E
EBITDA (₹ Cr) 682 860 1,058 1,254 1,530 1,830 2,170 2,524 2,912
EBITDA Margin 9.7% 10.4% 10.9% 11.2% 11.6% 12.0% 12.4% 12.7% 13.0%
Energy Segment Margin 8.4% 9.0% 9.5% 9.8% 10.2% 10.6% 11.0% 11.3% 11.5%
Environment Segment Margin 9.8% 10.2% 10.4% 10.5% 10.8% 11.2% 11.5% 11.8% 12.0%
Chemical Segment Margin 12.5% 12.8% 13.0% 13.2% 13.5% 13.8% 14.0% 14.3% 14.5%

Profitability Metrics

Metric FY22 FY23 FY24 FY25E FY26E FY27E FY28E FY29E FY30E
PAT (₹ Cr) 541 678 840 978 1,185 1,458 1,768 2,107 2,466
PAT Margin 7.7% 8.2% 8.7% 8.7% 9.0% 9.6% 10.1% 10.6% 11.0%
EPS (₹) 45.4 56.9 70.4 82.0 99.4 122.3 148.3 176.7 206.8
ROE 14.5% 16.2% 17.5% 18.0% 19.2% 20.5% 21.5% 22.0% 22.5%
ROCE 21.2% 23.0% 24.5% 25.2% 26.4% 27.5% 28.4% 29.0% 29.5%

Balance Sheet Metrics

Metric FY22 FY23 FY24 FY25E FY26E FY27E FY28E FY29E FY30E
Net Cash (₹ Cr) 1,680 1,820 2,045 2,212 2,585 3,180 3,865 4,625 5,382
Free Cash Flow (₹ Cr) 345 425 562 634 825 1,015 1,215 1,405 1,580
Fixed Asset Turnover 4.2x 4.5x 4.8x 5.1x 5.4x 5.7x 5.9x 6.1x 6.2x
Working Capital (Days) 75 72 70 68 66 65 64 63 62
Capex (₹ Cr) 310 385 420 565 680 725 650 585 525

4.2 Segment-wise Analysis

Energy Segment

  • Core business with consistent growth at 14.2% CAGR (FY25-30E)
  • Margin improvement from 9.8% to 11.5% driven by value-added solutions
  • Increasing contribution from clean energy solutions (from 25% to 40% by FY30E)

Environment Segment

  • Fastest-growing segment with 18.0% CAGR (FY25-30E)
  • Margin expansion from 10.5% to 12.0% through integrated solutions approach
  • Rising contribution from recurring revenue streams and O&M services

Chemical Segment

  • Steady growth at 13.0% CAGR (FY25-30E)
  • Highest margin business with expansion from 13.2% to 14.5%
  • Focus on specialty applications and value-added products improving product mix

4.3 Order Book Analysis

Metric (₹ Crores) FY25E FY26E FY27E FY28E FY29E FY30E
Opening Order Book 10,850 12,450 14,620 16,775 18,850 20,980
Order Inflow 12,805 15,340 17,405 19,577 22,006 24,447
Revenue Execution 11,205 13,170 15,250 17,502 19,876 22,405
Closing Order Book 12,450 14,620 16,775 18,850 20,980 23,022
Book-to-Bill Ratio 1.11x 1.11x 1.10x 1.08x 1.06x 1.03x

4.4 Cash Flow Analysis

Metric (₹ Crores) FY25E FY26E FY27E FY28E FY29E FY30E
Operating Cash Flow 1,199 1,505 1,740 1,865 1,990 2,105
Capex (565) (680) (725) (650) (585) (525)
Free Cash Flow 634 825 1,015 1,215 1,405 1,580
Dividend Payout 362 438 540 654 780 913
Dividend Payout Ratio 37% 37% 37% 37% 37% 37%

5. INVESTMENT THESIS

5.1 Key Growth Drivers

a) Transition to Clean Energy Solutions

  • Strategic pivot toward renewable, biomass, and waste heat recovery solutions
  • Green hydrogen initiatives positioning for future energy transition
  • Energy efficiency offerings gaining traction amid rising power costs
  • Carbon capture technologies development for industrial applications

b) Strong Order Book and Diversified Client Base

  • Order book of ₹12,450 crores (1.11x FY25E revenue) providing clear visibility
  • Reduced dependency on power sector (from 38% to 25% of orders over last 3 years)
  • Increasing international contribution (32% in FY25E vs. 28% in FY22)
  • Well-diversified across industries (chemicals, cement, food processing, pharma)

c) Service Business Expansion

  • After-market services contribution growing from 18% to targeted 25% by FY30E
  • Higher margin profile (15-18% vs. 8-10% for equipment business)
  • Recurring revenue providing stability across business cycles
  • Digital services platform enhancing customer stickiness and value proposition

d) Strategic International Expansion

  • Focus on Southeast Asia, Middle East, and Africa as key growth markets
  • Leveraging European acquisitions (Danstoker, Boilerworks) for technology access
  • Targeting international revenue contribution of 40% by FY30E (from 32% in FY25E)
  • Global engineering centers optimizing cost structure while expanding capabilities

e) Solutions-Based Approach

  • Integration of products across segments for turnkey solutions
  • Shifting from equipment supplier to performance guarantor model
  • Build-Own-Operate (BOO) initiatives for select applications
  • Value-added engineering services enhancing customer engagement

5.2 Margin Expansion Levers

  • Digital Transformation: IoT-enabled solutions enhancing operational efficiency
  • Value Engineering: Cost optimization through design improvements and standardization
  • Service Mix: Increasing contribution from higher-margin service business
  • Product Mix: Focus on proprietary technologies and specialized solutions
  • Operational Excellence: Lean manufacturing and global sourcing optimization

5.3 ESG Initiatives

  • Environmental:

    • 35% reduction in carbon footprint across operations by FY30E (base year FY22)
    • 50% of internal energy consumption from renewable sources by FY28E
    • Water-positive operations at all manufacturing facilities

  • Social:

    • Skill development programs reaching 50,000+ beneficiaries
    • Gender diversity target of 30% women in workforce by FY30E
    • Thermax Foundation focused on education, health, and environment initiatives

  • Governance:

    • Board comprising 55% independent directors including 2 women directors
    • Strong risk management framework with dedicated sustainability committee
    • Enhanced ESG disclosure practices aligned with global reporting standards

6. COMPETITOR ANALYSIS

6.1 Peer Group Overview

Company Market Cap (₹ Cr) Revenue (₹ Cr) FY25E EBITDA Margin FY25E 3Y Revenue CAGR 3Y PAT CAGR ROE FY25E P/E FY25E
Thermax Limited 40,782 11,205 11.2% 14.5% 17.8% 18.0% 41.7x
Larsen & Toubro* 450,850 235,400 12.8% 12.5% 15.4% 16.5% 38.5x
Siemens India* 178,520 22,850 13.5% 11.8% 14.2% 18.5% 66.3x
ISGEC Heavy Engineering 4,820 5,625 8.8% 9.2% 12.4% 14.2% 22.5x
VA Tech Wabag 7,150 3,250 10.5% 12.8% 18.5% 15.8% 24.2x
Ion Exchange India 11,850 2,780 12.2% 15.5% 20.2% 20.5% 42.5x

*L&T and Siemens have broader business portfolios; comparison is based on relevant segments

6.2 Detailed Competitor Analysis

a) Larsen & Toubro (Power & Industrial Solutions) - Primary Competitor

Comparative Analysis vs. Thermax (5-Year Outlook)

Metric Thermax (FY30E) L&T Power (FY30E) Relative Position
Revenue Growth CAGR (FY25-30E) 14.2% 11.5% Thermax +2.7%
EBITDA Margin 13.0% 14.2% L&T +1.2%
PAT Growth CAGR (FY25-30E) 19.5% 16.2% Thermax +3.3%
ROCE 29.5% 22.8% Thermax +6.7%
Net Cash Position ₹5,382 Cr Net Debt Thermax stronger
Order Book/Revenue 1.03x 1.65x L&T +0.62x
International Revenue 40% 42% L&T +2%

Competitive Strengths of L&T Power:

  • Larger scale and balance sheet strength to bid for mega projects
  • Broader product portfolio including power transmission and distribution
  • Stronger EPC capabilities for utility-scale power projects
  • Wider global presence across developed and emerging markets
  • Comprehensive infrastructure solutions offering

Thermax's Advantages Over L&T:

  • More focused approach to energy and environmental solutions
  • Greater agility in decision-making and technological adaptation
  • Superior return ratios and capital efficiency
  • Stronger clean energy portfolio and environmental solutions
  • Better positioned for distributed and industrial-scale applications

5-Year Comparative Growth Trajectory:

Metric FY25E FY26E FY27E FY28E FY29E FY30E
Revenue Growth
Thermax 15.5% 17.5% 15.8% 14.8% 13.6% 12.7%
L&T Power 12.8% 14.2% 13.5% 11.8% 10.5% 8.8%
EBITDA Growth
Thermax 18.5% 22.0% 19.6% 18.6% 16.3% 15.4%
L&T Power 15.2% 17.5% 16.2% 14.5% 12.8% 10.5%
PAT Growth
Thermax 16.4% 21.2% 23.0% 21.3% 19.2% 17.0%
L&T Power 14.5% 18.2% 19.5% 17.2% 15.5% 13.2%

b) Siemens India (Energy Division) - Technology Competitor

Comparative Analysis vs. Thermax (5-Year Outlook)

Metric Thermax (FY30E) Siemens Energy (FY30E) Relative Position
Revenue Growth CAGR (FY25-30E) 14.2% 12.5% Thermax +1.7%
EBITDA Margin 13.0% 15.2% Siemens +2.2%
PAT Growth CAGR (FY25-30E) 19.5% 16.5% Thermax +3.0%
ROCE 29.5% 25.8% Thermax +3.7%
Service Revenue Contribution 25% 32% Siemens +7%
Digital Solutions Penetration 18% 35% Siemens +17%
Clean Energy Focus 40% 45% Siemens +5%

Competitive Strengths of Siemens Energy:

  • Superior digital capabilities and automation integration
  • Stronger technology portfolio in gas turbines and grid solutions
  • Higher service business contribution improving margin profile
  • Better positioned in electrification and grid modernization
  • Global technology access and R&D capabilities

Thermax's Advantages Over Siemens:

  • More comprehensive environmental solutions portfolio
  • Stronger presence in biomass and waste heat recovery
  • Better positioning in mid-market industrial applications
  • More competitive pricing strategy for emerging markets
  • Broader chemical solutions offering

5-Year Comparative Growth Trajectory:

Metric FY25E FY26E FY27E FY28E FY29E FY30E
Revenue Growth
Thermax 15.5% 17.5% 15.8% 14.8% 13.6% 12.7%
Siemens Energy 13.2% 15.0% 14.2% 12.5% 11.2% 9.8%
EBITDA Growth
Thermax 18.5% 22.0% 19.6% 18.6% 16.3% 15.4%
Siemens Energy 16.8% 18.5% 17.2% 16.0% 14.5% 12.8%
PAT Growth
Thermax 16.4% 21.2% 23.0% 21.3% 19.2% 17.0%
Siemens Energy 15.8% 18.8% 17.5% 16.8% 15.2% 13.5%

c) ISGEC Heavy Engineering - Direct Competitor

Comparative Analysis vs. Thermax (5-Year Outlook)

Metric Thermax (FY30E) ISGEC (FY30E) Relative Position
Revenue Growth CAGR (FY25-30E) 14.2% 10.5% Thermax +3.7%
EBITDA Margin 13.0% 10.2% Thermax +2.8%
PAT Growth CAGR (FY25-30E) 19.5% 14.8% Thermax +4.7%
ROCE 29.5% 18.5% Thermax +11.0%
International Revenue 40% 22% Thermax +18%
Service Revenue Contribution 25% 15% Thermax +10%
Order Book/Revenue 1.03x 1.15x ISGEC +0.12x

Competitive Strengths of ISGEC:

  • Stronger position in process equipment and heavy fabrication
  • More competitive pricing in standard boiler and pressure vessel segments
  • Established reputation in sugar industry solutions
  • Broader heavy engineering capabilities (presses, steel mills)
  • Value engineering approach for cost-sensitive segments

Thermax's Advantages Over ISGEC:

  • More diversified business portfolio across energy and environment
  • Stronger technological capabilities in specialized applications
  • Superior international presence and global footprint
  • Better positioned in emerging clean energy solutions
  • More developed service business model and digital capabilities

5-Year Comparative Growth Trajectory:

Metric FY25E FY26E FY27E FY28E FY29E FY30E
Revenue Growth
Thermax 15.5% 17.5% 15.8% 14.8% 13.6% 12.7%
ISGEC 11.2% 12.5% 11.8% 10.2% 9.5% 8.2%
EBITDA Growth
Thermax 18.5% 22.0% 19.6% 18.6% 16.3% 15.4%
ISGEC 14.5% 15.8% 14.5% 13.2% 12.0% 10.5%
PAT Growth
Thermax 16.4% 21.2% 23.0% 21.3% 19.2% 17.0%
ISGEC 12.8% 15.5% 14.8% 13.5% 12.2% 10.8%

d) VA Tech Wabag - Environment Segment Competitor

Comparative Analysis vs. Thermax (Environment Segment)

Metric Thermax Environment (FY30E) VA Tech Wabag (FY30E) Relative Position
Revenue Growth CAGR (FY25-30E) 18.0% 15.8% Thermax +2.2%
EBITDA Margin 12.0% 12.5% Wabag +0.5%
PAT Growth CAGR (FY25-30E) 22.5% 20.2% Thermax +2.3%
ROCE 26.8% 21.5% Thermax +5.3%
International Revenue 45% 65% Wabag +20%
O&M Revenue Contribution 22% 35% Wabag +13%
Order Book/Revenue 1.5x 2.2x Wabag +0.7x

Competitive Strengths of VA Tech Wabag:

  • Pure-play water and wastewater treatment specialist
  • Stronger technology portfolio in advanced water treatment
  • Higher international contribution especially in Middle East and Africa
  • Greater focus on municipal water and sewage treatment
  • Larger operations and maintenance (O&M) business contribution

Thermax's Advantages Over VA Tech Wabag:

  • More integrated offering combining water, air, and energy solutions
  • Broader industrial customer base across multiple sectors
  • Stronger balance sheet and financial flexibility
  • Better cross-selling opportunities across business segments
  • More developed digital solutions platform

7. VALUATION

7.1 Valuation Methodology

We employ multiple valuation approaches to arrive at our target price for Thermax:

Using a combination of DCF analysis and relative valuation:

  1. DCF Analysis:
    • WACC: 12.5%
    • Terminal Growth Rate: 5%
    • Implied Fair Value: ₹3,970
  2. Relative Valuation:
    • Forward P/E (FY26E): 32x
    • Forward EV/EBITDA (FY26E): 26x
    • Implied Fair Value: ₹3,930
  3. Target Price: ₹3,950 (weighted average)

RISK FACTORS

Business Risks

  1. Cyclicality: High dependence on industrial capital expenditure cycles
  2. Project Execution: Delays and cost overruns in large projects
  3. Technology Disruption: Rapid changes in energy and environmental technologies
  4. Raw Material Volatility: Steel and specialty chemical price fluctuations
  5. Working Capital Management: Extended payment cycles impacting cash flows

Macroeconomic Risks

  1. Interest Rate Sensitivity: Potential impact on client capex decisions
  2. Currency Fluctuations: Exposure to international operations and exports
  3. Global Economic Slowdown: Reduced industrial investments during downturns
  4. Regulatory Changes: Evolving environmental norms and compliance requirements
  5. Geopolitical Tensions: Impact on global supply chains and project execution

Risk Mitigation Strategies

  1. Portfolio Diversification: Balanced mix of products, services, and geographies
  2. Operational Flexibility: Modular manufacturing and agile project management
  3. Innovation Focus: Continuous investment in R&D to maintain competitive edge
  4. Strategic Partnerships: Collaborations with technology leaders for knowledge transfer
  5. Prudent Financial Management: Maintaining strong balance sheet and liquidity

ESG ASSESSMENT

Environmental Initiatives

  • Carbon neutrality target for own operations by 2035
  • 35% reduction in product carbon footprint by 2030
  • Water-positive operations at all manufacturing facilities
  • Circular economy implementation in manufacturing processes

Social Responsibility

  • Skill development programs for rural communities
  • Gender diversity target of 30% women in workforce by 2030
  • Strong safety culture with zero fatality commitment
  • CSR focus on education, health, and environmental sustainability

Governance Framework

  • Board composition: 50% independent directors
  • Robust risk management and compliance frameworks
  • Transparent disclosure practices and stakeholder engagement
  • Executive compensation linked to sustainability performance

ESG Rating Comparison

CompanyMSCI ESG RatingSustainalytics ScoreCDP Rating
ThermaxAMedium RiskB
Siemens EnergyAALow RiskA-
ABB IndiaAALow RiskA
TriveniBBBMedium RiskNot Rated
VoltasBBBMedium RiskB-
VA Tech WabagAMedium RiskB

FIVE-YEAR OUTLOOK (FY26-30)

Revenue CAGR Projections by Segment

  1. Energy Segment: 14-16%
    • Conventional boilers and heaters: 8-10%
    • Clean energy solutions: 25-30%
    • Combined heat and power systems: 18-20%
  2. Environment Segment: 18-20%
    • Air pollution control: 15-17%
    • Water and wastewater treatment: 22-24%
    • Waste-to-value solutions: 28-30%
  3. Chemical Segment: 12-14%
    • Ion exchange resins: 10-12%
    • Performance chemicals: 14-16%
    • Specialty chemicals: 16-18%

Geographic Diversification (Revenue Contribution)

RegionFY25EFY30E
India65%60%
Southeast Asia15%18%
Middle East & Africa10%12%
Europe7%6%
Americas3%4%

Key Performance Indicators (FY30 Targets)

  • Revenue: ₹20,530 Cr
  • EBITDA Margin: 11.0%
  • PAT: ₹1,437 Cr
  • ROE: 16.8%
  • Order Book: ₹24,000+ Cr
  • International Revenue: 40%
  • Green Portfolio Contribution: 30%
  • Service Revenue: 20%

CONCLUSION

Thermax is strategically positioned to benefit from India's energy transition journey and the global push towards sustainable industrial solutions. The company's diversified portfolio, strong balance sheet, and focus on innovation provide a solid foundation for sustained growth over the next five years.

While facing competition from both global and domestic players, Thermax's integrated approach to energy and environmental challenges gives it a competitive edge. The management's focus on expanding the green portfolio and service business should drive margin improvement and reduce cyclicality in the long term.

With a target price of ₹3,950 representing an 18.5% upside from current levels, we initiate coverage with a BUY recommendation for long-term investors seeking exposure to India's industrial and clean energy growth story.

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  BIKAJI FOODS INTERNATIONAL LTD Equity Research Report April 15, 2025 Investment Summary Bikaji Foods International Ltd (NSE: BIKAJI) is one of India's leading manufacturers of ethnic snacks and sweets. Founded in 1986 and headquartered in Bikaner, Rajasthan, the company has established a strong brand presence in the organized Indian snacks market. This report analyzes Bikaji's financial performance, competitive positioning, growth strategy, and management profile to assess its investment potential over the next five years. Recommendation: ACCUMULATE Target Price (FY2030) : ₹1,150 Current Price : ₹648 Potential Upside : 77.5% (5-year horizon) Annual Expected Return : ~12.2% CAGR Bikaji Foods presents a compelling long-term investment opportunity in India's growing packaged food industry, supported by favorable demographic trends, increasing disposable incomes, and changing consumer preferences toward branded packaged snacks. Business Overview Bikaji Foods I...
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