Thermax Limited

Industrials — Conglomerates · NSE

₹3,327.00+₹53.20 (+1.63%)

DalalBaazaar Score

58 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, a very high earnings multiple, which leaves little margin for disappointment, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

The 60-second version of Thermax Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Thermax Limited, together with its subsidiaries, provides energy and environment solutions in India and internationally.

IndustryConglomerates

SectorIndustrials

Employees3,962

Annual revenue₹10,643 Cr

How does it make money?

Turns over ₹10,643 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 3,962 employees supports ₹2.69 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.69 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 15.3% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE15.2%

What is the outlook?

17 analysts covering the stock expect revenue to grow about 19.0% and earnings to grow about 46.6% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+19.0%

Est. earnings growth+46.6%

Analysts17

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +32% while net margin moved +21% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+32%

Margin effect+21%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 63.2x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 70.3x
✗ P/B of 6.75x is a steep premium to book

Quality vs. Valuation

Company Quality

62/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

46/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

63.2x

3Y Median

70.3x

40 monthly readings · mean 74.3x · range 51.1x–135.2x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 10% below its 3y median of 70.3x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 29% below the peer median of 88.8x.

vs. its own history

Fair

70.3x median over 40 months · -10%

vs. sector peers

Cheap

88.8x median of 3 peers · -29%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

32.0x

PEG

3.72

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 9.4% to 11.5% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 179% over 3 years, from ₹851 Cr to ₹2,372 Cr.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹411 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 9.4% to 11.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 29% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 9%✓ 11.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹411 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 7% a year✓ 9.8% CAGR
Latest reported year was 7.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 1.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 12%✓ 15.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 4 neutral · 4 weak

Market Cap

₹37,478 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

63.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

6.75x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹52.66

Profitable

Profitable on a per-share basis

ROE

13.0%

Moderate

Moderate capital efficiency

ROCE

15.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.42x

Low

Conservative leverage

Revenue Growth (YoY)

7.1%

Modest

Modest growth

Profit Growth (YoY)

-83.4%

Falling

Profits are shrinking

Dividend Yield

0.42%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹411 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

37.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

0.4%

Weak

Thin margins leave little room for error

Net Margin

5.5%

Average

Average bottom-line conversion

Current Ratio

1.22

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.30

Defensive

Steadier than the market

52W Range Position

23%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

3347.5 / 3662.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

42.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹8,034 Cr	₹9,237 Cr	₹10,268 Cr	₹10,643 Cr	+9.8%
EBITDA	₹754 Cr	₹1,005 Cr	₹1,122 Cr	₹1,222 Cr	+17.5%
EBITDA Margin	9.4%	10.9%	10.9%	11.5%	—
PAT (Net Profit)	₹450 Cr	₹645 Cr	₹634 Cr	₹721 Cr	+17.0%
EPS	₹39.97	₹57.28	₹56.31	₹63.94	+17.0%
ROE	11.6%	14.5%	12.9%	13.0%	—
ROCE	14.5%	17.6%	15.6%	15.3%	—
Total Debt	₹851 Cr	₹1,296 Cr	₹1,734 Cr	₹2,372 Cr	+40.7%
Free Cash Flow	-₹205 Cr	-₹597 Cr	₹177 Cr	-₹411 Cr	—

🟢 Revenue has grown at 9.8% a year over 3 years.

🟢 EBITDA has grown at 17.5% a year over 3 years.

🟢 EBITDA Margin has risen from 9.4% to 11.5% over 3 years (+2.1 pts).

🟢 PAT (Net Profit) has grown at 17.0% a year over 3 years.

🟢 EPS has grown at 17.0% a year over 3 years.

🟢 ROE has risen from 11.6% to 13.0% over 3 years (+1.3 pts).

🟡 ROCE has held roughly flat at 15.3% over 3 years.

🔴 Total Debt has grown at 40.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹13,282 Cr

Total Liabilities

₹7,703 Cr

Cash & Equivalents

₹674 Cr

Operating Cash Flow

₹542 Cr

Capex

-₹952 Cr

Shareholding (proxy)

Institutional Holding

19.3%

Insider Holding

73.7%

Corporate Actions

Next Earnings

11 Nov 2026

Dividend Rate

₹14

Ex-Dividend Date

03 Jul 2026

Analyst Consensus

Recommendations

9 Buy · 7 Hold · 4 Sell

Target Price (Mean)

₹4,419.1

+32.8% vs CMP

Target Range

₹3,360 – ₹5,325

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

1 positive2 mixed2 negative1 general

Thermax (NSEI:THERMAX) Stock Forecast & Analyst Predictions

Simply Wall Street, 13 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Thermax Ltd. Share Price: Price Action and Fundamentals

Univest, 12 Oct

THERMAX Forecast — Price Target — Prediction for 2027

TradingView, 26 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Thermax Share Price Jumps Over 6% After Kotak Securities Upgrades It To 'Buy'

NDTV Profit, 09 OctAnalyst view

🟢Potentially positiveAn analyst opinion changing, which moves the price without changing the business.

Thermax share price soars 7% on renewal energy arm stake sale buzz

Business Standard, 09 OctOwnership

🔴Potentially negativePromoter selling or pledging is a signal worth understanding, though the reason is often personal rather than about the business.

Thermax shares plunge 16% after Q1 profit drops 83% on ₹91 crore one-time project cost overrun

Upstox, 31 JulResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongGrowth

MiddlingBusiness Quality · Financial Health · Profitability · Risk

WeakValuation

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑