Thermax Q4 FY26: Orders Surge, Execution Takes Centre Stage

Thermax ended Q4 FY 2025-26 with a clear split screen. The numbers on orders and profits looked strong, but the management commentary kept returning to execution discipline and cost volatility. Consolidated operating revenue for the quarter rose to INR 3,428 crore, up 13% year on year. Profit after tax came in at INR 244 crore, up 18%.

The order cycle was the standout. Order booking for the quarter jumped to INR 4,490 crore, up 112% year on year. Order balance closed at INR 13,604 crore, up 27%. A large part of this acceleration came from the Industrial Infra segment, led by a roughly INR 1,600 crore boiler package supply contract for a 1x800 MW ultra-supercritical thermal power plant in Central India, won through Thermax Babcock and Wilcox Energy Solutions Limited.

The company also reinforced shareholder returns. The board recommended a final dividend of INR 14 per share and announced a special dividend of INR 6 per share to mark Thermax’s 60th anniversary. The record date was set as July 3, 2026, subject to shareholder approval.

Orders: A Strong Quarter With a Concentrated Driver

Thermax described Q4 as the highest order booking quarter of the year. The investor presentation’s sector split shows power at 42% of order booking, driven by the large ultra-supercritical order. Food and beverages stood at 9%, while chemicals, metals and mining, and engineering were each at 7%. Bio-CNG contributed 4%, and the presentation noted rising activity in drugs and pharmaceuticals.

A newer theme was data centres. The company highlighted a breakthrough order in the US for multiple sets of hot water driven chillers with a combined capacity of 45,000 TR for a large data centre. In the concall, the CFO also referred to a prospective data-centre opportunity on the energy side for TBWES, involving boiler supply for a steam turbine-based solution in the global market. Management did not quantify the addressable market and stated it would take time to assess the opportunity.

Financial snapshot

Values are as presented by the company for Q4 FY 2025-26.

Segment performance: Infra improves, Green Solutions slips

Thermax’s Q4 segment picture was mixed.

Industrial Products delivered sales of INR 1,663 crore in Q4 FY26 with PBIT of INR 226 crore. The company attributed a lower performance versus the prior year largely to product mix. Management also indicated that Industrial Products can be more exposed to raw material swings due to shorter inventory coverage.

Industrial Infra posted sales of INR 1,469 crore with PBIT improving to INR 96 crore, up from INR 39 crore in the same quarter last year. The company linked the improvement to higher operational efficiency and reduced losses in some entities.

Chemicals reported sales of INR 193 crore with PBIT of INR 10 crore, down sharply from INR 35 crore last year. Management pointed to higher input costs and product mix changes. In the concall, the CFO also highlighted supply disruptions and price increases in key raw materials such as styrene, affecting water treatment and construction chemicals.

Green Solutions had sales of INR 204 crore but posted a loss at the segment level. The investor presentation noted project overrun costs during the quarter. On the concall, management explained that the issue came from the First Energy business where a contractor failed to perform on a project in South India, forcing Thermax to step in and complete or continue execution, resulting in cost overruns. Management also clarified that the onsite biomass-based heating solutions business delivered stable numbers.

Q4 FY26 segment revenue mix

Shares are computed from segment revenue disclosed and consolidated operating revenue of INR 3,428.04 crore.

What management is watching: costs, working capital, and execution cycles

Thermax flagged a volatile cost environment in its industry outlook. The company cited steel prices rising about 20 to 25% in the quarter and crude-driven volatility in non-ferrous metals such as copper, aluminium, and nickel, amplified by USD appreciation against the rupee. Bought-out equipment prices were also noted as up 3 to 5% quarter on quarter.

In the concall, the CFO explained why these pressures did not show up sharply in Q4 margins. The war-related impact came late in March, by which time procurement for the quarter was largely completed. However, he cautioned that the exposure could show up going forward, particularly in Industrial Products where the visibility on inventory coverage is shorter.

A second point was working capital. Management acknowledged a build during the quarter, driven by project delays and collection delays, including retentions across some large orders. The CFO said the company expects to work through overdues over the next couple of quarters.

The company also clarified contract structure. When asked about fixed price versus variable price orders, management stated that investors should assume almost all orders are fixed price. Price variation clauses, if any, would be limited and uncommon.

Finally, the execution cycle of larger jobs remains longer. Management indicated that large projects can exceed 12 months, with some in the 16 to 18 month range.

Capital allocation and capacity build

Thermax provided a concrete capex indication for the coming year. The CFO guided to regular capex of about INR 100 to 150 crore, plus additional capex for capacity line extensions in the boiler facility and cooling facilities, taking total capex to roughly INR 250 crore.

This ties directly to where order momentum is building. The company discussed debottlenecking and the ability to execute large boiler orders across its facilities, and also referred to planned expansion at the Sri City site for its cooling business.

In addition to financial and operational updates, Thermax announced a leadership appointment. The board approved the appointment of Ms. Kavita Singh as Chief Human Resources Officer and senior management personnel with effect from May 25, 2026.

Investor takeaways

Thermax’s Q4 FY26 was defined by a sharp recovery in order inflows and higher profitability, helped by better performance in Industrial Products and reduced losses in Industrial Infra. The order book is now meaningfully higher year on year, offering better revenue visibility.

But the management narrative was disciplined rather than celebratory. Execution delays at customer sites, working capital recovery, and raw material volatility were repeatedly highlighted as real constraints. Green Solutions also reminded investors that project risk can hit margins when partner performance breaks down.

The near-term investor lens is likely to stay on three variables: conversion of the larger order balance into revenue, margin protection in a volatile cost cycle given the predominance of fixed-price contracts, and the pace at which Thermax can scale new pockets of demand such as data centres while keeping execution tight.