THERMAX - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.7

📊 Core Financials Breakdown

Profitability

ROCE: 16.5% and ROE: 13.4% — respectable, indicating efficient capital deployment.

EPS: ₹44.7 — solid, but recent quarterly PAT dropped sharply from ₹205 Cr. to ₹46.5 Cr. (-46%) — a red flag for earnings consistency.

Balance Sheet Strength

Debt-to-equity: 0.02 — virtually debt-free, which enhances financial resilience.

Dividend Yield: 0.42% — modest, not a key attraction for income investors.

Cash Flow & Institutional Sentiment

Slight increase in FII holdings (+0.16%) but a notable drop in DII holdings (-0.51%) — mixed institutional confidence.

💰 Valuation Metrics

Metric Value Insight

P/E Ratio 85.8 Extremely high — significantly above industry average (49.4), suggesting overvaluation.

P/B Ratio ~10.0 Elevated, but typical for high-growth industrials.

PEG Ratio 2.46 High — implies valuation is stretched relative to growth.

Intrinsic Value ~₹2,800–₹3,000 (est.) Current price of ₹3,330 is above fair value.

🧠 Business Model & Competitive Edge

Core Operations: Energy and environment solutions — including boilers, chillers, water treatment, and pollution control.

Strengths

Strong ESG alignment and industrial decarbonization tailwinds.

Diversified portfolio across clean energy, process heating, and waste management.

Challenges

Recent earnings volatility and high valuation multiples.

RSI at 48.9 and MACD at -22.4 — technical indicators suggest bearish momentum.

📈 Entry Zone & Technicals

DMA 50: ₹3,388, DMA 200: ₹3,631 — price is below both, indicating short-term weakness.

RSI: 48.9 — neutral zone.

MACD: -22.4 — bearish crossover.

📌 Entry Zone: ₹3,000–₹3,150 — ideal for accumulation if price dips and earnings stabilize.

🕰️ Long-Term Holding Guidance

Outlook: Analysts project a price range of ₹3,092 to ₹4,604 for 2025, with upside potential to ₹6,122 by 2026

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Holding Strategy: Suitable for long-term investors with conviction in clean-tech infrastructure and ESG-driven industrial demand. Monitor earnings recovery and valuation compression for optimal entry.

Let me know if you'd like a peer comparison with Voltas or Triveni Turbine to round out your view.

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