The company has set up 25 task forces led by senior managers to address the cost-saving measures. The new agenda is coordinated sourcing of common items for better terms and economies of scale, fixing of costs based on market realities, rather than cost-plus method and monitoring outstandings on a daily basis to keep down accounts receivables. The company will be implementing ERP packages, across all business' by the end of the next financial year to help track costs and strategise its pricing.

If everything goes as planned, Thermax Limited will be able to break even by the end of the year or even post a modest profit, Prakash Kulkarni, managing director of the company said. The topline growth is expected to come from the company's new initiatives in energy and environment management.

The material cost reduction task force has already started looking at Thermax's buying patterns. The value of material purchases stood at Rs 280 crore last year, of which the company spent Rs 129 crore on common items such as steel, pipes, valves, control panels, motors, cables and burners required by various businesses, but was sourced separately by divisions. There will be coordinated sourcing for these items. This is expected to bring about a 3.5 per cent reduction on an annual basis. For non-common items the company is working out a detailed cost-reduction strategy. The value engineering initiative is attempting to shift from traditional norms of manufacturing and bringing down costs, without lowering performance standards. The design to cost exercise is expected bring about a six to 12 per cent reduction in costs of various products.