THERMAX - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | THERMAX | Market Cap | 48,587 Cr. | Current Price | 4,078 ₹ | High / Low | 4,305 ₹ |
| Stock P/E | 82.6 | Book Value | 341 ₹ | Dividend Yield | 0.34 % | ROCE | 16.5 % |
| ROE | 13.4 % | Face Value | 2.00 ₹ | DMA 50 | 3,533 ₹ | DMA 200 | 3,324 ₹ |
| Chg in FII Hold | -1.11 % | Chg in DII Hold | 0.65 % | PAT Qtr | 111 Cr. | PAT Prev Qtr | 226 Cr. |
| RSI | 65.7 | MACD | 214 | Volume | 2,79,138 | Avg Vol 1Wk | 1,78,932 |
| Low price | 2,743 ₹ | High price | 4,305 ₹ | PEG Ratio | 2.37 | Debt to equity | 0.04 |
| 52w Index | 85.4 % | Qtr Profit Var | 7.11 % | EPS | 60.7 ₹ | Industry PE | 37.9 |
📊 THERMAX demonstrates solid fundamentals with ROCE at 16.5% and ROE at 13.4%, supported by low leverage (Debt-to-equity 0.04). EPS of 60.7 ₹ reflects profitability, and strong market cap (48,587 Cr.) ensures liquidity. However, valuation is stretched with P/E at 82.6 compared to industry average of 37.9, and PEG ratio of 2.37 indicates expensive growth expectations. Dividend yield is modest at 0.34%. Quarterly PAT declined sharply (111 Cr. vs 226 Cr.), raising concerns about earnings consistency. Technical indicators (RSI 65.7, MACD 214) show bullish momentum, with price trading near 52-week high (4,305 ₹).
💡 Entry Price Zone: Safer accumulation between 3,950 ₹ – 4,000 ₹ near short-term support. Buying above 4,100 ₹ carries valuation risk.
📈 Long-Term Holding Guidance: THERMAX is fundamentally strong and suitable for long-term holding (3–5 years). Investors should monitor earnings growth and valuation multiples. Holding is justified if profitability stabilizes and demand in energy/environmental solutions continues to expand.
Positive
- Strong ROCE (16.5%) and ROE (13.4%).
- EPS of 60.7 ₹ supports profitability.
- Low debt-to-equity (0.04) ensures financial stability.
- Strong technical momentum (RSI 65.7, MACD 214).
- DII holdings increased (+0.65%), showing domestic confidence.
Limitation
- High P/E (82.6) compared to industry average (37.9).
- PEG ratio of 2.37 indicates premium valuation relative to growth.
- Quarterly PAT dropped significantly (111 Cr. vs 226 Cr.).
- Dividend yield is modest at 0.34%.
- FII holdings decreased (-1.11%), showing reduced foreign investor confidence.
Company Negative News
- Sharp decline in quarterly profitability.
- Foreign investors reduced holdings.
Company Positive News
- Strong domestic institutional support (+0.65%).
- Stock trading near 52-week high, reflecting strong momentum.
Industry
- Industry PE at 37.9, while THERMAX trades at 82.6, showing premium valuation.
- Energy and environmental solutions sector benefits from sustainability demand but faces margin pressures.
Conclusion
✅ THERMAX is a fundamentally strong company with low debt and healthy return metrics, but currently overvalued. Best suited for disciplined long-term investors who accumulate near support zones. Exit opportunities may arise near 4,300–4,350 ₹ if valuations stretch without earnings growth. Conservative investors should wait for better entry levels or improved profitability before committing.
Would you like me to extend this into a sector overlay comparison (e.g., Thermax vs ABB, Siemens India, and Cummins) to highlight relative valuation and efficiency positioning?