Pune: Engineering and energy solutions provider Thermax Ltd. reported an 83% year-on-year decline in consolidated net profit for the first quarter of FY27, as cost overruns and execution delays due to the conflict in West Asia weighed heavily on its earnings. Despite the weak profitability, the company has maintained healthy order inflows, with its order book growing 2% year-on-year to ₹8,809 crore, providing revenue visibility for the coming quarters. Operating Revenues have reached ₹2,303 crore, in the quarter, a 7% increase from last year.
These disappointing earnings have led to a sharp reaction by the markets, with Thermax’s shares falling almost 11% on July 31 following the news.
In a press conference, the management said its clients could not take deliveries of manufactured equipment due to the West Asia crises, resulting in almost ₹300 crore worth of revenues remaining unrecognized in the first quarter. It also had to take a one time hit of ₹91 crore due to cost overruns for a particular project due to the Gulf war disruption.
The company has continued to secure orders from sectors like power generation, industrial boilers, clean energy, water treatment and air pollution control systems. Its domestic industrial sector remains resilient, supported by continued investments in manufacturing, infrastructure and energy transition projects.
In order to mitigate future disruptions, Thermax is closely monitoring geopolitical developments while strengthening its project risk management and execution controls to minimize future disruptions.
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