Thermax Ltd Q2 revenue rose 11% as PBT margin fell to 6.1%

Thermax reported Q2 FY27 revenue of Rs 2,756 crore, up 11% year on year, but profit after tax fell 5% to Rs 113 crore as profit-before-tax margin declined to 6.1% from 7.0%. The result reflected higher backlog execution in industrial businesses, offset by product mix, input costs and a Rs 15 crore renewable-project impairment.

Why did Thermax revenue rise in Q2 FY27?

Thermax’s Q2 FY27 revenue rose because Industrial Products and Industrial Infra improved operations and executed their order backlog. Consolidated revenue increased by Rs 282 crore from Rs 2,474 crore in Q2 FY26 to Rs 2,756 crore in Q2 FY27. It was also Rs 453 crore above Q1 FY27 revenue of Rs 2,303 crore.

Industrial Products recorded Q2 sales of Rs 1,303 crore, compared with Rs 1,181 crore a year earlier, while Industrial Infra sales increased to Rs 1,006 crore from Rs 886 crore. Chemicals sales rose to Rs 226 crore from Rs 191 crore, and Green Solutions sales increased to Rs 288 crore from Rs 262 crore. The broad-based sales increase occurred despite lower consolidated order booking of Rs 3,259 crore, down 8% year on year.

Green Solutions also partially commissioned 17.1 megawatts at the FEPL Gujarat project, comprising 9.9 megawatts of wind and 7.2 megawatts of solar capacity. Separately, its compressed biogas plant completed performance-guarantee tests at production of more than 21 tonnes per day, above its guaranteed 20 tonnes per day capacity.

Why did Thermax profit fall despite higher revenue?

Thermax’s profit fell because PBT declined to Rs 169 crore from Rs 174 crore despite the revenue increase, reducing the PBT margin by 0.9 percentage points to 6.1%. PAT fell to Rs 113 crore from Rs 119 crore, and PAT margin moved to 4.1% from 4.8%. The presentation showed no exceptional-item gain in either Q2 FY27 or Q2 FY26.

Management attributed the Industrial Products result to product mix and higher input costs. The segment’s profit before interest and tax, or PBIT, declined to Rs 78 crore from Rs 116 crore, while its PBIT margin fell to 6.0% from 9.8%. Chemicals PBIT declined to Rs 15 crore from Rs 19 crore, and its margin reduced to 6.5% from 9.8%, also reflecting input costs and product mix.

The company also recorded a Rs 15 crore impairment provision in one hybrid renewable-energy project in Green Solutions after events identified during the quarter. Green Solutions reported a Q2 PBT loss of Rs 25 crore, compared with a Rs 1 crore loss in Q2 FY26, and its PBT margin moved to negative 8.7% from negative 0.5%.

Which Thermax segment changed profitability most?

Thermax’s Industrial Infra segment showed the largest year-on-year profit improvement, with Q2 PBIT of Rs 56 crore compared with a Rs 1 crore loss in Q2 FY26. Its revenue increased by Rs 120 crore to Rs 1,006 crore, and its PBIT margin rose to 5.6% from negative 0.1%. Management attributed the change to higher revenue and additional PSI income, while the prior-year quarter included overruns on one project.

The improvement in Industrial Infra did not fully reverse the first-half pressure. For the six months to September FY27, Industrial Infra reported a PBIT loss of Rs 12 crore on sales of Rs 1,818 crore, versus PBIT of Rs 89 crore on Rs 1,705 crore of sales in the prior-year period. Its first-half margin was negative 0.6%, compared with 5.2% a year earlier.

Green Solutions remained the lowest-margin business in Q2 FY27, with sales of Rs 288 crore and a Rs 25 crore PBT loss. For the six months to September FY27, the segment reported sales of Rs 535 crore and a Rs 45 crore PBT loss, compared with sales of Rs 518 crore and a Rs 13 crore loss in the prior-year period.

What does Thermax’s order book show?

Thermax ended Q2 FY27 with order balance of Rs 14,250 crore, up 16% from Rs 12,300 crore in Q2 FY26 and above Rs 14,018 crore in Q1 FY27. Cash and investments were Rs 3,260 crore, up 20% year on year. The larger order balance supports the company’s reported increase in revenue from backlog execution, though the presentation provides no company-wide conversion schedule.

Industrial Infra held the largest segment order balance at Rs 7,421 crore, up 26% year on year, after booking two major captive-power-plant orders during Q2. Its order booking rose 5% to Rs 1,523 crore. The disclosed wins included an order for an over-300-tonnes-per-hour internally recirculating circulating fluidised-bed boiler for a South Indian steel manufacturer and an order for two 155-tonnes-per-hour circulating fluidised-bed combustion boilers in Nigeria.

Industrial Products had order balance of Rs 5,079 crore, up 4%, although quarterly booking fell 23% to Rs 1,237 crore. Management said major orders were deferred to Q3. Metals and mining accounted for 32% of the group order book and cement for 17%, meaning the two sectors represented 49% of the Rs 14,250 crore balance.

Why is Green Solutions order booking not directly comparable?

Thermax reported Green Solutions order booking of Rs 279 crore in Q2 FY27, down 9% year on year, but said the comparison is affected by a reporting-method change. The segment’s order balance was Rs 1,557 crore, up 18%, while its booking had been Rs 306 crore in Q2 FY26. The company said the adjustment did not affect underlying contracts, revenue recognition or financial results.

In the prior year, Thermax Onsite Energy Solutions Limited adopted a rolling 12-month forecast model for reporting its long-term contracts, which typically run for around 10 years. The earlier approach reported only the first year’s revenue. Thermax said the methodological change increased reported order book by Rs 197 crore in the prior year.

Green Solutions continued to add operating projects during the quarter, including a 14-tonnes-per-hour biomass boiler order in Nanjangud, Karnataka. Thermax estimated that project’s carbon-dioxide reduction potential at about 26,000 metric tonnes annually. These additions sit alongside the disclosed hybrid-project impairment and the segment’s negative Q2 PBT margin.

Conclusion

Thermax’s Q2 FY27 performance shows that higher execution lifted revenue by Rs 282 crore year on year, but did not produce higher profit. Industrial Infra’s move from a Rs 1 crore PBIT loss to Rs 56 crore of PBIT partly offset lower Industrial Products and Chemicals profitability, while the Rs 15 crore Green Solutions impairment contributed to the decline in consolidated PBT margin to 6.1%.

The next disclosed items to watch are whether deferred Industrial Products orders are booked in Q3 and how the Rs 7,421 crore Industrial Infra order balance converts into revenue. Green Solutions has partially commissioned 17.1 megawatts at the FEPL Gujarat project, while its Q2 loss and the hybrid-project impairment leave the segment’s subsequent financial performance unresolved.