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Thermax, an Indian industrial machine manufacturer, misses its profit forecasts due to weak demand

Thermax, an Indian industrial machine manufacturer, reported a fourth-quarter profit that was below expectations Friday. This was due to a weaker demand for its machines and increased raw material costs.

In recent quarters, capital goods companies that rely heavily on government orders have seen their inflows slow down. Analysts report that government capex was subdued in most segments during the quarter under review.

Thermax’s order book dropped by 8%, to 21,19 billion rupees. A spike in raw material costs increased the company’s expenses by 11%.

The net profit of the industrial machine manufacturer rose by 8%, to 2,066 billion rupees (US$24 million), in the quarter ending March 31. It was 1.9 billion rupees last year.

LSEG data shows that analysts had predicted a profit of 2,08 billion rupees.

Thermax revenue for the quarter ended March grew by about 12%, to 30,85 billion rupees. This was below analyst expectations of 31,22 billion rupees.

Thermax’s industrial products division saw a revenue increase of 18.5% while the division that installs bio-CNG power plants and other energy sources grew by 4%.

In a press release, the company said that 660 million rupees of costs related to its bio-CNG project had affected the quarterly results.

Peer ABB India announced higher profits for the first quarter on Friday, citing steady demand for its products. Reporting by Aleef Jhan in Bengaluru, editing by Sahal Muhammad.

(source: Reuters)