Thermax shares fall after Q1 FY27 profit drops, cost overrun and weak outlook

Shares of Thermax tumbled as much as 16% to an intraday low of Rs 3,567 on the BSE on Friday after the company reported an 86% year-on-year decline in net profit to Rs 22 crore for the first quarter of FY27. The sharp drop in earnings was largely due to a one-time project cost overrun of Rs 91 crore recognised in the Industrial Infra segment.Despite the weak bottom line, revenue from operations rose 7% year on year to Rs 2,303 crore, compared with Rs 2,158 crore in the corresponding quarter of the previous fiscal, according to the company's investor presentation.The company's earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 69.08% year on year to Rs 69.5 crore from Rs 224.8 crore, missing Street estimates of Rs 219 crore by 68.26%. EBITDA margin contracted sharply to 3.02% from 10.42% a year ago and also fell short of Street expectations of 9%.Order inflow increased 2% year on year to Rs 2,809 crore from Rs 2,748 crore, while the total order book stood at Rs 14,045 crore as of June 30, up 23% from a year earlier.Thermax weak outlookThe company's outlook also remained subdued. Thermax said performance in the Industrial Products segment was affected by higher input costs and lower export sales. Order booking and backlog in the Industrial Infra segment declined mainly due to weaker demand, while the ongoing conflict in West Asia continued to weigh on trade sentiment and regional capital expenditure, pointing to softer near-term demand in the Middle East.The company also highlighted rising cost pressures during the quarter. Between April and June 2026, prices of flat and structural steel, tubes and pipes strengthened due to uneven demand-supply dynamics. Non-ferrous metal prices remained highly volatile amid global supply concerns and changing industrial demand, while movements in the U.S. dollar against the rupee further increased imported material costs and overall cost volatility.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

New Delhi: Energy and environment solutions provider Thermax reported an 85 percent year-on-year decline in consolidated net profit to Rs 22 crore for the quarter ended June 2026, mainly due to a project cost overrun and rising expenses.The company had recorded a consolidated profit after tax of Rs 151 crore in the corresponding quarter of FY26, according to its statement issued on Thursday.Project ImpactThermax said the June quarter results were affected by a Rs 91 crore increase in the estimated cost required to complete a specific project in its Industrial Infra segment.The revision followed certain events identified during the quarter, which raised the expected cost of completing the project.The year-on-year comparison was also affected by a one-time benefit in the previous financial year. Q1 FY26 included income of Rs 56 crore received by a subsidiary in the Industrial Infra segment under the Package Scheme of Incentives.Thermax Subsidiary Secures ₹1600 Crore Boiler Contract For 800 MW Power ProjectProfitability in the Industrial Products segment was additionally affected by lower export sales during the quarter.Revenue GrowthDespite the steep fall in profit, Thermax’s consolidated operating revenue rose 7 percent to Rs 2,303 crore in Q1 FY27, compared with Rs 2,158 crore in the corresponding period of the previous financial year.The company’s order booking increased 2 percent year-on-year to Rs 2,809 crore during the quarter.Its order balance stood at Rs 14,045 crore as of 30 June 2026, marking a 23 percent increase from Rs 11,376 crore in the year-ago period.Thermax Secures Orders Worth ₹500 Cr For 5 Bio-CNG PlantsMajor OrderDuring the quarter, Thermax secured an order worth more than Rs 400 crore to supply boiler pressure parts for a data centre project in the United States.Order booking in the Green Solutions segment increased, supported by improved inflows at Thermax Onsite Energy Solutions Ltd and a revision in the company’s order-book reporting method.TOESL shifted to a rolling 12-month forecast model, replacing the earlier method of recognising only the first year’s revenue from long-term contracts.This reporting change increased the stated order book by Rs 139 crore, or 5 percent, without affecting underlying contracts, revenue recognition or financial performance.