This article first appeared on GuruFocus .
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Revenue:Not explicitly quantified in the transcript; management described the quarter's numbers as "nothing special."
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Earnings:No specific earnings figures disclosed in the opening remarks.
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Margins:Not mentioned in the transcript.
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Cash Flow:Not discussed in the transcript.
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Expenses:Not referenced in the transcript.
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Backlog:Management expressed strong optimism and positivity on backlog, though no figure was provided.
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Segment Performance:Management indicated multiple businesses/sectors have significant potential, with details deferred to the Q&A no metrics disclosed.
Release Date: November 06, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Thermax Ltd ( BOM:500411 ) expects significantly better margins in H2 FY27, with Industrial Products margins jumping from 6% in H1 to close to 9-10% for the full year.
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The company anticipates revenue of over INR7,000 crores in H2 FY27, driven by a strong backlog and execution pickup.
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Thermax Ltd ( BOM:500411 ) is seeing a strong inquiry pipeline in BioCNG after the GOBARdhan scheme, with order bookings expected in Q4 FY27.
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The company is expanding capacity at its TBWES plant with nearly INR100 crores investment and debottlenecking to meet demand.
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New product launches, such as the Thermax-i series intelligent boilers and electric boilers, are gaining traction and contributing to growth.
Negative Points
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Order inflows in Q2 FY27 declined 8% year-on-year, and the company is uncertain about achieving double-digit growth due to market volatility.
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Margins have been under pressure due to cost overruns and impairments, with additional commodity cost impacts expected to persist into Q3 and Q4.
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The US data center market has seen delays of 1-3 months on almost every project, impacting revenue recognition and order timelines.
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FEPL, the renewables business, continues to incur losses, with similar or slightly larger losses expected in H2 FY27.
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The BioCNG business has not booked any new orders in the last 2.5 years, and order bookings are not expected until Q4 FY27.
Q & A Highlights
Q: Order inflows declined 8% year-on-year in Q2 and were flat in Q1. What is the outlook for order inflows over the next three to four quarters mid-teens growth or single digits? A: Ashish Bhandari (MD & CEO) said this quarter was not as bad as it appears, since last year included a very large international utility boiler order. He expects order pickup to become more prominent in Q3 and Q4. Both single-digit and double-digit growth are possible; double digits would require some very large projects to materialize. He is confident Thermax will grow over last year's INR14,000 crore backlog threshold, but declined to commit to a specific number given pricing absorption and US data center timing uncertainties.
Q: Margins have been under pressure from cost overruns and impairments. Are all the hits now taken, and can high single-digit margins be sustained? A: Ashish Bhandari (MD & CEO) said yes, and added that for at least a couple of quarters margins should be even better than high single digit. He detailed three drag areas: legacy FGD/government orders (the 2019-vintage project is in its eighth year, with only the Assam project already provided for in Q1 having meaningful work left, plus expected change orders that will not be booked as margin); FEPL renewables losses, including a high-CapEx Tamil Nadu project awaiting government approvals, with a growth partner process underway; and TBSPL, where three of five problematic PGTRs are cleared and two rice-straw units will imminently enter PGTR after monsoon delays.
Q: Industrial Products orders fell about INR300 crore year-on-year in Q2. Is domestic demand weakening, and what is the commodity cost impact? A: Ashish Bhandari (MD & CEO) said the decline was a temporary timing shift orders slipped from September to October and the INR300 crore gap will be made up in Q3 itself, with Industrial Products domestic showing a good jump. On commodities, steel (plates, pipes, seamless tubes) rose 10%15% post-war, along with aluminum, bought-out electrical equipment, and crude derivatives such as PVC and styrene (the latter also hit by Middle East supply shutdowns). The commodity impact on Industrial Products was about INR10 croreINR15 crore for the quarter, worst in Q2, tapering through Q3 and Q4. A larger margin drag came from unshipped inventory (including US data center and Chemicals exports), which hit direct margin, factory base-cost absorption, and profitable international order timing all expected to reverse as shipments normalize.
Q: What is the status of the US data center pipeline, both cooling and cogen/boilers, where no new orders have been announced recently? A: Ashish Bhandari (MD & CEO) said the opportunity pipeline is getting bigger and more real each quarter, and Thermax is getting deeper into design specifications with some of the biggest industry names, but timing has been disappointing nearly every project has slipped one to three months due to US local environmental clearances and approvals. The first US data center project's shipments moved from Q2 into Q3 and partly Q4. US order sizes are in the hundreds of crores for both cooling and boilers (boilers fewer but larger); the first order was just over $20 million and was small-to-medium by US standards. He now expects to close one order within the year rather than two, but is more optimistic on size. India cooling orders (INR40 croreINR100 crore each) continue, with one booked in Q2 and another in Q3.
Q: Can you quantify the H2 margin and revenue outlook? A: Ashish Bhandari (MD & CEO) guided to H2 revenue of INR7,000 crore-plus across Q3 and Q4 (teens growth year-on-year), assuming the war continues a couple more months, and said more is possible. Profitability should be significantly better than H1: Industrial Products, at barely 6% in H1, will jump to the other side of the mean, and Industrial Projects will see an even bigger jump, with customer change-order recoveries as upside. Chemicals absorbed INR20 croreINR25 crore of commodity impact in H1 with a net impact of just INR2 crore after price hikes, and a strong October gives Q3 visibility, though Q4 is less clear. FEPL losses will continue in Q3 and Q4, worse than the original outlook, while TOESL performs strongly and BioCNG losses shrink each quarter.
Q: How much revenue slipped from Q1 to Q2 and from Q2 to Q3, and what drove the Q2 miss versus the INR3,100 crore internal plan? A: Ashish Bhandari (MD & CEO) said roughly INR200 croreINR300 crore moved from Q2 into Q3 (slightly less than the Q1-to-Q2 shift). Q1 also had gas shortages and vendor/supply chain constraints, now resolved, with TBWES capacity utilization normalized in Q2. The unresolved issue is carryforward of profitable international projects, plus two large orders (chemicals and cooling equipment) sitting on the water with substantial margin north of INR30 crore in aggregate. Against an internal Q2 revenue plan of about INR3,100 crore, Thermax barely crossed INR2,800 crore. Deliverable H2 revenue is well above INR7,000 crore, but the guidance reflects practical supply chain constraints.
Q: What is the full-year margin aspiration for Industrial Products, and what is the potential of the newly launched Thermax-i intelligent boiler series? A: Ashish Bhandari (MD & CEO) said Industrial Products should do much more than 7% for the full year, aspiring to close to 9%10%, helped by operating leverage, profitable international shipments shifting into H2, and new products. On the i-series, he described it as unique globally a self-learning boiler that anticipates process and input changes and optimizes itself, delivering substantial efficiency gains in trials versus manual operation. The applicable market in the first launch cities is a few hundred crore, within a heating business of roughly INR1,500 croreINR2,000 crore, and it is the highest-priced product in the market, targeting customers who will pay a premium for fast payback. He also noted Thermax is India's clear #1 in electric boilers and won a gas purification order for a high-profile green hydrogen project.
Q: What is the size of the FEPL loss in H2, and what is the status of the growth
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
