Thermax’s stock has seen a remarkable rise, increasing by 100% over the past 7 months, with shares climbing from ₹2,533 to the current ₹5,061. Looking back further, since hitting a low of ₹705.90 per share in October 2020, the stock has soared by an impressive 617%. This surge has been largely uninterrupted, although analysts caution about short-term fluctuations despite optimistic long-term prospects.
Expert Opinion
Sharekhan, a domestic brokerage firm, emphasises Thermax’s potential in India’s shift towards green energy. The company’s diverse offerings in biomass, waste heat recovery (WHR), and water desalination are seen as key growth areas. However, the firm notes a soft order book currently standing at ₹10,111 crore, partly due to slower large-scale orders amid recent elections.
Despite high expectations for future growth, Thermax’s stock is trading at premium earnings multiples. Sharekhan maintains a ‘Hold’ rating, suggesting that while long-term potential is priced in, short-term volatility could impact returns.
Sonam Srivastava of Wright Research acknowledges the stock’s momentum and positive analyst sentiment but warns of unpredictable short-term movements. She highlights Thermax’s strategic focus on green hydrogen and chemicals, aligning with global sustainability trends. However, she advises investors to monitor financial performance and management’s execution to realise long-term growth prospects.
Thermax’s Position
Thermax, a leader in energy and environmental solutions, remains well-positioned amidst increasing government emphasis on sustainable infrastructure. While its performance is influenced by broader capital goods sector trends, Thermax’s specialised product segments may offer resilience and differentiation.
“Thermax stands out in the engineering segment of capital goods, particularly with its focus on green technologies,” emphasised Sonam Srivastava. The company’s strong presence in energy solutions underscores its strategic advantage in a rapidly evolving market landscape.
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