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THERMAX 2023-24 Annual Report Analysis

Wed, 10 Jul

THERMAX has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

THERMAX Income Statement Analysis

• Operating income during the year rose 15.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 45.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 9.3% in FY24 as against 7.4% in FY23.
• Depreciation charges increased by 26.7% and finance costs increased by 133.0% YoY, respectively.
• Other income grew by 46.2% YoY.
• Net profit for the year grew by 42.7% YoY.
• Net profit margins during the year grew from 5.6% in FY23 to 6.9% in FY24.

THERMAX Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	80,898	93,235	15.2%
Other income	Rs m	1,602	2,342	46.2%
Total Revenues	Rs m	82,500	95,577	15.9%
Gross profit	Rs m	5,973	8,704	45.7%
Depreciation	Rs m	1,169	1,481	26.7%
Interest	Rs m	376	876	133.0%
Profit before tax	Rs m	6,031	8,690	44.1%
Tax	Rs m	1,524	2,258	48.2%
Profit after tax	Rs m	4,507	6,432	42.7%
Gross profit margin	%	7.4	9.3
Effective tax rate	%	25.3	26.0
Net profit margin	%	5.6	6.9

For Investors: Our Big Prediction

THERMAX Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 47 billion as compared to Rs 44 billion in FY23, thereby witnessing an increase of 7.2%.
• Long-term debt stood at Rs 8 billion as compared to Rs 4 billion during FY23, a growth of 86.9%.
• Current assets rose 6% and stood at Rs 64 billion, while fixed assets rose 36% and stood at Rs 36 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 100 billion as against Rs 87 billion during FY23, thereby witnessing a growth of 15%.

THERMAX Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	38,656	44,338	14.7
Current Liabilities	Rs m	44,092	47,254	7.2
Long-term Debt	Rs m	4,225	7,895	86.9
Total Liabilities	Rs m	87,300	100,445	15.1
Current assets	Rs m	60,723	64,481	6.2
Fixed Assets	Rs m	26,498	35,964	35.7
Total Assets	Rs m	87,300	100,445	15.1

THERMAX Cash Flow Statement Analysis

• THERMAX's cash flow from operating activities (CFO) during FY24 stood at Rs 2 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -5 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 3 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 190 million from the Rs 1 billion net cash flows seen during FY23.

THERMAX Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	4,596	2,473	-46.2%
Cash Flow from Investing Activities	Rs m	-6,797	-5,092	-
Cash Flow from Financing Activities	Rs m	3,485	2,854	-18.1%
Net Cash Flow	Rs m	1,443	190	-86.8%

Current Valuations for THERMAX

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 57.1, an improvement from the EPS of Rs 40.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 5,320.0, stands at 98.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 14.3 times, while the price to sales ratio stands at 6.4 times.
• The company's price to cash flow (P/CF) ratio stood at 46.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	718.4	827.9
TTM Earnings per share	Rs	40.0	57.1
Diluted earnings per share	Rs	37.8	54.0
Price to Cash Flow	x	48.1	46.0
TTM P/E ratio	x	60.5	98.4
Price / Book Value ratio	x	6.6	8.2
Market Cap	Rs m	253,882	364,103
Dividends per share (Unadj.)	Rs	10.0	12.0

Ratio Analysis for THERMAX

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY24, from 1.4x during FY23. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 10.9x during FY24, from 17.0x during FY23. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 14.5% during FY24, from 11.7% during FY24. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 18.3% during FY24, from 14.9% during FY23. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 7.3% during FY24, from 5.6% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	1.4	1.4
Debtors’ Days	Days	8	8
Interest coverage	x	17.0	10.9
Debt to equity ratio	x	0.1	0.2
Return on assets	%	5.6	7.3
Return on equity	%	11.7	14.5
Return on capital employed	%	14.9	18.3

To see how THERMAX has performed over the last 5 years, please visit here.

THERMAX Share Price Performance

Over the last one year, THERMAX share price has moved up from Rs 2,286.2 to Rs 5,320.0, registering a gain of Rs 3,033.9 or around 132.7%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 75,215.7 (down 0.4%). Over the last one year it has moved up from 40,584.0 to 75,215.7, a gain of 34,632 points (up 85.3%).

Overall, the S&P BSE SENSEX is up 22.4% over the year.

(To know more, check out historical annual results for THERMAX and quarterly results for THERMAX)