Energy and environment company Thermax is entering a phase where its mix of work would change over the next couple of years with opportunities emerging in the climate and energy transition space, MD & CEO Ashish Bhandari said on Monday. More money will be going into new energy areas, he added.
Thermax created a new energy division two years ago to work on these areas. With the focus on new energy, Bhandari said, the company would be investing in new products, engineering capability and people.
Investments will be made in the green solutions business and the green solutions energy-as-a-service segment, including solar and biomass-based services. In the solar energy space, it targets to reach the 200 MW market next year and is also looking to enter the hybrid solar wind energy space soon.
In the area of bio-CNG, the company had secured orders to the tune of Rs 40-50 crore with leadership in areas such as municipal waste to CNG and biomass to CNG, Bhandari said. “The company has invested around `400 crore in the solar and bio-CNG energy services business. These would be profitable in the long term and have an expected rate of return of around 15%,” he added.
In its existing business, Thermax is seeing momentum in orders from the sugar, steel, cement, sugar, chemicals, pharma, and food and beverages sectors. Green solutions are also contributing to an increase in the order flow. The government capex push in the Budget and support to green technologies is expected to further spur the company’s clean energy portfolio.
Thermax saw an increase in revenues, stabilisation of commodity prices and lower international freight costs, which enabled it to report a surge in profits and improve margins during the December quarter. Profit after tax (PAT) was up 59% year-on-year to Rs 126 crore, revenue rose by 27% to Rs 2,049 crore, and margins improved by 90 bps. This was largely on the back of input costs for steel, chemical and other commodity prices remaining stable during the quarter.
The company is seeing good momentum in both domestic as well as international businesses, Bhandari said. Going ahead, he expected a 70:30 split between the domestic and international businesses.
Thermax’s order book during Q3 was down 10% to Rs 2,204 crore, while its order balance was up 33% to Rs 9,859 crore. The order book was lower as there were no large flue gas desulphurisation (FGD) systems and petrochemical refining project orders but instead there were multiple smaller orders in the Rs 10-50 crore range, Bhandari said.