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A miss versus our estimate

* Thermax 4QFY25 revenue/EBITDA/PAT grew by 11.6%/10%/5% YoY. Revenue and EBITDA growth was slightly better than our estimates, while a higher-than-expected tax rate resulted in a miss at PAT level.

* Thermax’s revenue of INR30.8b (+11.6% YoY) (MOFSL est. INR29.1b) was led by 18%/4%/4%/36% YoY growth in Industrial Products/Industrial Infra/Green Solutions/Chemical segments.

* EBITDA margin stood at 9.7% for 4QFY25 and 8.7% for full year FY25. Gross margin contracted ~85bp QoQ and expanded ~40bp YoY to 43.4%, owing to an adverse mix in Industrial Infra and Chemical segments. This, coupled with operating de-leverage, led to an EBITDA margin contraction of ~20bp YoY to 9.7%, while EBITDA at INR2.9b beat our estimate by 5%.

* With a neutral operational performance and higher other income (up 39% YoY), adj. PAT at INR2.05b increased 5.3% YoY but 8% below our estimates due to a higher tax rate.

* Among segments, Industrial Product and Chemical segment revenue grew by 18%/36% YoY, while growth remained weak in industrial infra and green solutions segment.

* EBIT margin performance was strong only in Industrial Product and Chemical segments. EBIT margin improved to 14.4% for Industrial Product segment (vs 11.7% in 4QFY24). Margins in industrial infra segment remained weak at 2.8% in 4QFY25 vs. 6.1% in 4QFY24. Another negative surprise came from negative EBIT margin in Green solutions segment as this segment’s results were affected by the recognition of higher technology intervention costs amounting to INR660m in Bio-CNG projects under the Industrial Infra segment. Chemical segment EBIT margins remained strong at 16.6%.

* Order inflow for the quarter stood at INR21b, down 8% YoY, and the total order book stood at INR106.9b, up 6% YoY.

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