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Thermax Annual performance,2009-10

Thermax net rises 42% to Rs 66 crore

The Times of India | July 22, 2010

PUNE: Thermax, the energy and environment company, for the quarter ended June 2010, has reported a 42% rise in net profit to Rs 66.2 crore — from Rs 46.5 crore in the comparable period last year — on a 45% jump in turnover to Rs 778.8 crore against Rs 522.8 crore in the year-ago period. The Rs 3,235-crore company ended the quarter with an order book of Rs 1,736 crore, a 76% jump over the corresponding quarter last fiscal. Its aggregate order balance for the period is Rs 6,330 crore, a 96% rise from Rs 3,230 crore in the year-ago period.

Meher Pudumjee, chairperson, Thermax, told share holders at the company's annual general meeting on Wednesday that they will invest Rs 500 crore over the next two years. These investments include Thermax's 51% share in two joint ventures, its two greenfield sites, line equipment, IT and a new subsidiary — ThermaxOnsite Energy Solutions (TOESL). This subsidiary will focus on green energy from biomass and other alternate sources, with plans to develop utility delivery business to customers on a unit-consumption basis.

Of the Rs 500-crore capex, Thermax will invest Rs 195 crore in its joint venture with Babcock and Wilcox, for the manufacture of super critical boilers. The plant is expected to begin commercial operations by March 2012, while the company is currently scouting for a site, in Maharashtra or Gujarat. Thermax will invest Rs 12.5 crore in its JV with SPX to help power plants meet emission norms and improve thermal efficiencies.

Scouting for new business, Thermax's other new subsidiary, Thermax Sustainable Energy Solutions (TSESL), will target the carbon credits business. MS Unnikrishnan, managing director, Thermax, explained that it is not viable for a unit generating less than 20,000 CERs (Certified Emission Reductions) annually to file for carbon credits. Instead, TSESL will aggregate the CERs of all such small units and trade for them. They expect to receive approvals from the United Nations Framework Convention on Climate Change (UNFCCC) by the end of the year.

Mr Unnikrishnan added that sourcing from China took a hit last year as industry in the region where Thermax's unit is located, had slowed down. Moreover, Indian companies have brought down their costs to become competitive against Chinese suppliers, hence they have reduced sourcing from China.

“We will source from China this year since Indian suppliers are currently facing a shortage. This will be predominantly for Indian use since European and even Middle East tenders specify that no Chinese raw materials are to be used.”

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