Go with Thermax....and Hold for 3 Months.....Rohit Saxena

Dear All,

 

Thermax posted a strong 53% YoY revenue growth in FY11, the management sounded cautious on diminishing order inflow visibility

Go with Thermax Cmp 584Rs, (buy between 545 to 585) , Target Price R1 642 Rs 10% Up Side, R2 672 15% Up Side, R3 700 Rs 20% Up Side.

"Though Thermax posted a strong 53% YoY revenue growth in FY11, the management sounded cautious on diminishing order inflow visibility, especially for large-sized orders in the power segment.

The report stated that continued buoyancy in short-cycle orders and improved visibility in international markets would offset some order inflow pressure. The company expressed hope that the situation should improve in 2HFY12.

"The company highlighted that it might have to resort to pricing cuts in 2HFY12 to match aggressive competition, if traction remains weak. This could impact revenue growth and profitability in FY13," the report said.

"We increase our FY12-13 consolidated revenue estimates by 2-5% post inclusion of Danstoker and cut in standalone revenues. But, we cut our margin estimates by 1-1.1 ppts given the intense competition for limited projects, which leads to a 10% cut in our FY12-13 EPS estimates. Long-awaited utility order win would abate worries on growth visibility while improvement in profitability of overseas business would aid overall margins," the report added.

R1-R2-R3- Levels are Resistance level

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Thanks & Regards
R. Saxena
Phone No: 09899365905
Mail Id: simmi9sep@gmail.com