Thermax reported a severe profitability decline in Q1 FY27, with consolidated net profit falling 83.44% year-on-year to ₹25.24 crore from ₹152.38 crore in the corresponding quarter last year. According to Business Standard, this dramatic decline occurred due to a ₹91 crore increase in the estimated cost to complete one specific project in the industrial infra segment following events identified during the quarter. The company's profit before tax (PBT) declined 80.07% to ₹42.14 crore from ₹211 crore year-ago, with EBITDA declining 69.08% to ₹69.5 crore from ₹224.8 crore year-ago, with EBITDA margin contracting sharply to 3.02% from 10.42% in the corresponding quarter last year. The steep fall in operating earnings weighed heavily on overall profitability, with the company retaining just ₹3 in operating profit for every ₹100 of revenue compared with more than ₹10 a year ago.
Revenue from operations showed resilience, rising 6.73% to ₹2,302.73 crore from ₹2,158 crore in the previous year, as reported by Business Standard. The sharp divergence between revenue and profit indicates that higher costs significantly eroded profitability during the quarter. The EBITDA margin of 3.02% means Thermax retained just ₹3 in operating profit for every ₹100 of revenue, compared with more than ₹10 a year ago, highlighting the severity of the margin compression faced by the energy and environment solutions company. The quarterly performance was reportedly impacted by lower export sales weighing on the profitability of the Industrial Products segment during the quarter, alongside the significant cost overruns in the industrial infra segment.
Among business segments, revenue from the Industrial Products segment grew 11.37% YoY to ₹1,058 crore, demonstrating strong performance despite overall challenges. However, the Industrial Infrastructure segment declined 2.86% YoY to ₹814 crore, while the Chemicals segment posted a strong 32.95% YoY growth to ₹230 crore. The Green Solutions segment rose 2.94% YoY to ₹245 crore during the quarter, as reported by Business Standard. The Industrial Products segment performance was impacted by higher input costs and a decline in export sales during the quarter, while the Green Solutions business faced margin pressure due to project overrun costs incurred during the quarter. The Chemicals segment reported improved profitability, supported by higher volumes and a better product mix, indicating relatively stronger operational performance.
Despite the challenging quarterly performance, Thermax demonstrated strong order book momentum with order balance reaching ₹14,045 crore as of June 30, 2026, representing a 7% year-on-year growth from the previous year. According to Business Standard, the order booking for the quarter stood at ₹2,809 crore, up 2% from ₹2,748 crore year-ago. The company continued to witness steady order inflows across key sectors, including chemicals, food & beverages, and metal & mining, indicating sustained demand in its core business segments. Additionally, data centres are emerging as a high-potential growth area for Thermax, with increasing traction in this segment, providing additional revenue visibility for future quarters. The management expects FY27 order inflows to exceed FY26, supported by delayed booking of two large domestic and international projects.
Thermax shares experienced significant volatility, falling 2.04% to ₹4,038 on Tuesday morning following the latest quarterly results. The stock opened at ₹4,103 on the NSE, a decrease from its previous close of ₹4,122.10, with investor sentiment currently very bearish. The stock had previously declined 16% to ₹4,041 after the weak quarterly results and 24.6% in the past month, though it remains up 37% this year. According to Moneycontrol, the stock is a constituent of the Nifty Midcap 150 index. Market analysts remain divided on the stock's prospects, with five out of 22 analysts maintaining buy ratings, nine recommending hold, and eight issuing sell ratings. Meanwhile, the board of directors has approved a Scheme of Arrangement and Amalgamation involving Thermax Bioenergy Solutions (TBSPL), Thermax Cooling Solutions (TCSL) and Thermax, under which the assets and liabilities of both demerged undertakings will be transferred to Thermax at their respective carrying values.
