1. At a Glance – Boilers, Balance Sheets & Big Promises
Thermax Limited currently sits at a market capitalisation of ₹33,718 crore, with the stock sulking around ₹2,830, down ~27% over the last year and ~18% in six months. For a company that sells “energy efficiency” for a living, the share price has been anything but efficient lately.
Q3 FY26 numbers were solid on paper: Revenue ₹2,635 crore, PAT ₹205 crore, translating into a QoQ profit jump of 40.6%. Sounds spicy, right? But zoom out and you’ll see margins still hovering around 9–10% OPM, ROCE at 16.2%, and ROE at 13.6%—respectable, but not exactly Michelin-star capital efficiency.
The valuation, however, is behaving like Thermax has already solved climate change: P/E ~52.6, EV/EBITDA ~27.6, P/B ~6.7. That’s Siemens-level confidence without Siemens-level margins.
The big flex remains the order book of ₹12,641 crore, boosted by chunky wins like the ₹580 crore Dangote boiler order. The question investors are quietly asking (and sometimes screaming on Twitter): Is Thermax a green-growth compounder… or a low-margin EPC business wearing a sustainability tuxedo?
2. Introduction – The 50-Year-Old “Green Startup”
Thermax is that rare Indian company which can say, without lying, “We were into clean energy before it was cool.” Founded in 1966, long before ESG became a LinkedIn buzzword, Thermax built its reputation on boilers, heaters, and industrial energy systems.
Over time, the company expanded into power plants, water & waste treatment, air pollution control, chemicals, and now green hydrogen. On paper, this is the dream portfolio of a climate-conscious industrialist. In reality, it’s also a cocktail of capital-heavy EPC projects, working capital stress, and margin volatility.
FY22–FY25 was a strong growth phase: revenue CAGR ~13% over 5 years, profit CAGR ~25%. But FY26 so far has been more… nuanced. Growth hasn’t disappeared, but it has slowed, and the stock price correction reflects that mood swing.
Thermax today is trying to balance three personalities:
- A steady industrial products supplier
- A lumpy, low-margin EPC contractor
- A high-potential green solutions dreamer
Can one balance sheet handle all three without losing its sanity? That’s the real plot of this story.
3. Business Model – WTF Do They Even Do?
Explaining Thermax to a lazy but smart investor goes like this:
“They help factories burn fuel more efficiently, pollute less, recycle water, and occasionally build entire power plants—while dreaming of hydrogen-powered utopia.”
Let’s break it down:
Industrial Products (40% of Q2 FY25 revenue)
This is the good child of the family. Small boilers, heaters, chillers, air pollution control systems, water treatment—repeat orders, decent margins, and predictable demand from cement, metals, food & beverage. Revenue here grew 55% between FY22 and FY24, which is impressive for a mature segment.
Industrial Infra / EPC (47%)
This is the troublemaker. Large boilers, power plants, infra EPC, FGD projects, Bio-CNG. Revenue grew 49% between FY22 and FY24, but margins are thin. One delayed project and suddenly working capital starts crying.
Green Solutions (7%)
This is the startup kid. BOO models for utilities, renewable energy, green hydrogen. Revenue grew 130% between FY22 and FY24, but from a small base. High hope, low current profits.
Chemicals (7%)
Ion exchange resins, performance chemicals, construction chemicals. Stable, boring, but useful. Growth of 24% between FY22 and FY24.
So yes, Thermax does a lot. The challenge isn’t demand—it’s execution discipline and
