THERMAX - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.9

📊 Fundamental Analysis of THERMAX

✅ Strengths

Strong Return Metrics

ROCE: 16.2% — efficient capital deployment

ROE: 13.4% — solid shareholder return

Earnings Growth

PAT Qtr: ₹206 Cr vs ₹114 Cr — strong sequential growth

EPS: ₹53.2 — robust earnings base

Healthy Technicals

RSI: 59.7 — bullish but not overheated

MACD: 93.0 — strong upward momentum

Price above both DMA 50 and DMA 200 — confirms trend strength

Moderate Debt: Debt-to-equity of 0.35 — financially stable

PEG Ratio: 2.65 — growth priced in, but not excessive for a high-quality industrial play

⚠️ Concerns

High Valuation

P/E: 71.7 vs Industry PE of 57.2 — premium valuation

Book Value: ₹414 vs Price: ₹3,779 — trading at ~9x book

Low Dividend Yield: 0.37% — not ideal for income investors

DII Exit: -0.51% — slight reduction in domestic institutional confidence

52w Index: 30.4% — underperformance relative to broader market

📉 Valuation & Ideal Entry Zone

Given current price of ₹3,779 and strong fundamentals

Ideal Entry Zone: ₹3,400–₹3,600

Near DMA 50 and below psychological ₹3,500 level

Offers better margin of safety without losing momentum

🧭 Long-Term Investment Outlook

THERMAX is a high-quality industrial stock with strong earnings growth, efficient capital use, and moderate debt. While valuation is rich, its fundamentals justify a long-term holding for growth-oriented investors.

Suitable for a 3–5 year horizon, especially if infrastructure and clean energy sectors expand

Hold if already invested, and consider adding on dips toward ₹3,500

🚪 Exit Strategy (If Already Holding)

Partial Exit Zone: ₹4,800–₹5,000

Near resistance zone and psychological levels

Full Exit: If ROE/ROCE decline or valuation stretches beyond P/E 90 without earnings support

Reinvest only if PEG drops below 2 and EPS growth sustains

Would you like a sector outlook on industrial engineering or a comparison with peers like ABB or Siemens India?

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