This article first appeared on GuruFocus .
Release Date: November 12, 2025
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 ) has implemented a change in accounting policy to better align orders and revenue, which should provide clearer financial insights.
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The company expects a strong second half of the year, particularly in the TBWES segment, with significant international orders anticipated.
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Thermax Ltd ( BOM:500411 ) is seeing a resurgence in its chemicals business, with plant utilization expected to improve and new partnerships boosting confidence.
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The company has a robust pipeline of projects in sectors like power, metals, refining, petrochemical, and fertilizers, both domestically and internationally.
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Thermax Ltd ( BOM:500411 ) is optimistic about its bioCNG business, with potential policy changes and technology improvements expected to enhance profitability.
Negative Points
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Thermax Ltd ( BOM:500411 ) is dealing with low-margin projects, particularly in the industrial infra segment, which have negatively impacted profitability.
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The company has faced unexpected engineering challenges in some projects, leading to additional costs and delays.
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There is a significant backlog of low-margin public sector unit orders and bioCNG jobs, which are expected to continue affecting financial performance.
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The chemicals segment has experienced headwinds due to international competition and pricing pressures, impacting margins.
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Thermax Ltd ( BOM:500411 ) has not taken any new bioCNG orders in the past two years, indicating challenges in this segment.
Q & A Highlights
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Q: Can you provide clarity on the industrial infra segment margins and the impact of low-margin contracts? A: Ashish Bhandari, Managing Director and CEO, explained that the worst is largely behind in terms of hits from low-margin contracts. The remaining backlog is expected to be delivered in Q3 and Q4, with some extending into the next year. The company has taken necessary contingencies for executing these projects, and the focus is on improving profitability moving forward.
Q: How should we think about the chemical segment margins, especially with the focus on construction chemicals? A: Ashish Bhandari noted that while there are headwinds, the company does not expect significant margin dilution in the chemical segment. Investments in capacity and new partnerships are expected to drive growth, with a target to reach 250 crores in order book per quarter, improving profitability in the near future.
Q: What is the outlook for large orders in the industrial infra segment, and what margins can be expected? A: Ashish Bhandari stated that the company is confident about a strong pipeline of projects, with expected order growth of over 20% for the year. Margins for domestic orders are expected to be around 5-8%, while international orders should exceed 10%, with an overall mix aiming for 10% profitability.
Q: Can you elaborate on the opportunities in the HRSG and global landscape for Thermax? A: Ashish Bhandari highlighted a strong international pipeline, particularly in HRSG and utility boilers. The company is focusing on profitable projects and has seen growth in TBWES numbers, with expectations for continued growth in the second half of the year.
Q: What is the status of the bioCNG projects, and what are the challenges and opportunities in this segment? A: Ashish Bhandari explained that while technology is stabilizing, projects are not yet commercially viable due to policy and pricing challenges. The company is optimistic about the sector's potential, with ongoing discussions on policy interventions that could improve project viability and profitability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
