Thermax (TMX IN) – Q3FY26 Result Update – Mixed Q3; sequential recovery on cards – Accumulate
Published on 06 Feb 2026
Thermax (TMX) reported a mixed quarter with marginal revenue growth of 5.1% YoY while EBITDA margin expanded by 214bps YoY to 9.7%. An unfavorable product mix weighed on margins in the Industrial Products segment, while weaker performance in heating and enviro equipment is expected to keep margins broadly flat in FY26. The company continues to remain selective in Industrial Infrastructure order bookings, avoiding construction-intensive and government-linked projects in order to prioritize efficient execution of its existing order book. In the Chemicals segment, management is targeting EBITDA margins of 13-14%, supported by an expected improvement in performance in Q4FY26. Meanwhile, the company plans to add 250 MW of capacity in Green Solutions during FY26, with a longer-term objective of scaling to ~1.1 GW by FY28, while also evaluating options to monetize the business in the interim. The stock is currently trading at PE of 43.3x/37.8x on FY27/28E. We maintain our ‘Accumulate’ rating valuing the core business (ex. Green Solutions) at a PE of 37x Sep’27E (38x Sep’27E earlier) accounting for pressurized industrial products margins, arriving at a SoTP-based TP of Rs3,374 (Rs3,513 earlier).
