By

, ETMarkets.comLast Updated: Jul 31, 2026, 11:16:00 AM IST

Synopsis

Thermax shares dropped significantly after reporting an 86% profit decline. Revenue rose 7% year-on-year, but earnings before interest, taxes, depreciation, and amortization fell. Order inflow increased 2%, and the total order book grew. The company cited higher input costs and weaker export sales impacting performance. Geopolitical issues and currency fluctuations also contributed to cost pressures.

Shares of Thermax tumbled as much as 16% to an intraday low of Rs 3,567 on the BSE on Friday after the company reported an 86% year-on-year decline in net profit to Rs 22 crore for the first quarter of FY27. The sharp drop in earnings was largely due to a one-time project cost overrun of Rs 91 crore recognised in the Industrial Infra segment.

Despite the weak bottom line, revenue from operations rose 7% year on year to Rs 2,303 crore, compared with Rs 2,158 crore in the corresponding quarter of the previous fiscal, according to the company's investor presentation.

The company's earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 69.08% year on year to Rs 69.5 crore from Rs 224.8 crore, missing Street estimates of Rs 219 crore by 68.26%. EBITDA margin contracted sharply to 3.02% from 10.42% a year ago and also fell short of Street expectations of 9%.

Order inflow increased 2% year on year to Rs 2,809 crore from Rs 2,748 crore, while the total order book stood at Rs 14,045 crore as of June 30, up 23% from a year earlier.

Thermax weak outlook

The company's outlook also remained subdued. Thermax said performance in the Industrial Products segment was affected by higher input costs and lower export sales. Order booking and backlog in the Industrial Infra segment declined mainly due to weaker demand, while the ongoing conflict in West Asia continued to weigh on trade sentiment and regional capital expenditure, pointing to softer near-term demand in the Middle East.

The company also highlighted rising cost pressures during the quarter. Between April and June 2026, prices of flat and structural steel, tubes and pipes strengthened due to uneven demand-supply dynamics. Non-ferrous metal prices remained highly volatile amid global supply concerns and changing industrial demand, while movements in the U.S. dollar against the rupee further increased imported material costs and overall cost volatility.

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