Building Thermax for the
Next 30 Years

Dear Shareholders,

A Milestone and a Beginning

Last December, I had the privilege of joining several past and present Thermaxians at the National Stock Exchange to commemorate 30 years of Thermax’s listing. As we rang the ceremonial bell, it was natural to reflect on the journey that brought us here. The occasion recognised the fortitude of Mr. A. S. Bhathena and Mr. Rohinton Aga, the values and culture nurtured by Anu and Meher, and the contribution of generations of employees who have built Thermax over six decades.

A bell, however, does not only mark a celebration. It also symbolises the starting gun for the path ahead.

This year, Thermax completes 60 years. Our history gives us a strong foundation to build a company that can thrive in this world of change. Energy security has once again become a strategic priority for nations. Climate change, water scarcity and deteriorating air quality are becoming more urgent. Artificial intelligence is reshaping industries while creating unprecedented demand for power, cooling and infrastructure. India must grow rapidly while reducing the resource and environmental intensity of that growth.

These shifts make Thermax more relevant than ever.

Momentum Returned, but More Was Possible

FY26 was a good year in many ways. Orders grew from Rs. 10,337 crore to Rs. 13,871 crore, resulting in a healthy order backlog of Rs. 13,604 crore, up 27.2% year-on-year, which will be carried forward to FY27. More importantly, the quality of orders improved and along the lines of our commitments, we did not undertake large project orders with long gestation and significant civil and construction scope. International business revenue also continued to grow, reaching Rs. 3,084 crore, up 33.4% in FY26.

Our Industrial Infra business secured important orders in India and overseas. These included utility boilers for a refinery project in Nigeria, boilers for a strategic Middle East oil & gas customer, and a supercritical boiler project in India. The business also improved profitability despite lower revenue, supported by a better project mix and improved execution. The supercritical project has been undertaken with careful thought and due resource allocation.

We also made progress in bio-CNG. All 14 plants have now been commissioned. Collectively, these plants produced 19,400 tonnes of compressed biogas during the year and crossed production of 100 tonnes per day in January 2026. The journey has not been easy, and plant availability remains an area of focus, but valuable lessons are being translated into operational improvements. The order for India’s first 5 TPD green methanol facility at Kandla Port, Gujarat, is an important example of research moving towards commercial application.

Industrial Products delivered broad-based growth. Our Cooling business secured its first large data centre orders in both India and the United States. Water and Waste Solutions, Air Pollution Control and Process Heat Solutions also recorded growth across domestic and international markets.

Several initiatives that were small or did not exist three years ago are now becoming meaningful businesses. These include zero liquid discharge, waste-to-energy, heat pumps, hybrid CLCTs (closed-loop cooling towers), gas purification & upgradation, urban water solutions, electric boilers, Thermax EDGE Live^® (IIoT), and lifecycle services.

In Green Solutions, TOESL continued to perform strongly while expanding internationally. We now operate over 47 plants and source more than 3,500 tonnes of biomass daily, making us one of India's largest organised biomass aggregators. Our Green Hydrogen team is making good progress towards a solid oxide electrolyser demonstration plant, while our partnership with HydrogenPro enables us to offer competitive alkaline electrolyser solutions today.

Our renewable energy business (FEPL) continued to scale, with the total capacity of solar, wind, and wind-solar hybrid projects under open access reaching 235.5 MWp to date. During the year, the growth in revenue was modest, especially given the investments made and the opportunities available to us. Project delays and operational challenges persist, and addressing these remains a clear priority for the team for the year ahead.

In Chemicals, the new resin plant in Jhagadia, Gujarat, has rapidly stabilised. There is progress in our partnerships, Vebro Polymers and OCQ, albeit below our original plans. International growth was also below plan but there were good breakthroughs towards the end of the year. The Ion Exchange Resin business expanded into new application areas, including PFAS removal for water treatment and speciality additives for ceramics, creating avenues for future growth.

There were areas where we could have done better. Revenue and profits were both short of targets as we started the year slow and heavy monsoons impeded project progress for several months. Most projects progressed broadly in line with expectations during the year. However, one large and complex project that was undertaken in FY22 experienced delays arising from design changes, vendorrelated disruptions and site execution challenges. Progress at certain bio-CNG sites was also slower than planned, impacting the pace of revenue growth.

Safety is another area where we need to do better. In our efforts to strengthen the safety culture, we undertook several key initiatives under the Behaviour Based Safety (BBS) Programme, with structured implementation across all our plants.

As we enter FY 2026-27, our order backlog provides confidence, but rising commodity prices, weather-related uncertainties, and the impact of the Gulf War on energy prices and global supply chains continue to demand the utmost attention to business operations.

Energy Security and Energy Sustainability

In recent years, the discussion at Thermax has centred more on energy transition. Events of the past year have again highlighted the importance of energy security. Nations and companies need access to energy that is reliable and affordable. At the same time, the environmental consequences of how that energy is produced and consumed cannot be ignored.

Energy security and energy sustainability must therefore progress together. As an example, in India, thermal power is once again on the discussion table with several projects, subcritical and supercritical, being conceptualised by our customers. Similarly, the bio-CNG policy is expected to be revised shortly, creating a fillip to this sector with significant green energy aspirations. Thermax’s role is to be the bridge between energy availability and energy sustainability. We must provide solutions that work technically and are commercially viable, while also reducing the environmental impact of growth.

The rise of artificial intelligence and data centres is one example. Data centres require large quantities of reliable power and efficient cooling. Thermax can participate across this value chain through power and heat recovery systems, absorption cooling, water treatment solutions and digital optimisation. Our recent data centre orders in India and the United States are early steps in developing this opportunity.

India’s challenge is larger, though. The country needs to expand manufacturing, infrastructure and energy supply while also addressing pollution, water stress and carbon intensity. Renewable electricity is important, but it is only one part of the answer. Industrial heat, energy efficiency, water reuse, clean air, bioenergy, green chemicals and resource conservation will be equally relevant.

Building Thermax for the Next 30 Years

Thermax’s growth has mirrored that of India. From a fledgling company that went through highs and lows, we have now emerged with capabilities and strength across sectors and geographies. To build a Thermax for the next 30 years is to build a company that is relevant to the challenges of the coming times and also one that can compete with and be the best globally.

Building and commercialising new technologies and continuous innovation is one key aspect of achieving this vision, but that by itself is not enough.

Thermax’s execution and quality must be world-class. The customer experience we currently provide is varied, especially when it comes to site execution and project management. Total System Quality (TSQ) includes a comprehensive look at the quality of our offering in a way that encompasses engineering, sourcing, vendors, manufacturing, construction, commissioning, project management and service. TSQ is a multi-year journey targeting global benchmarks on quality and speed. TSQ is a key aspect of Thermax’s planned transformation.

The third is internationalisation. FY 2025-26 provided encouraging proof points across the world, including in the United States, the Middle East, Africa, and Southeast Asia. International business now accounts for 29% of our sales. We will invest more in building capability to support customers locally. This means executing through local legal entities, hiring and training locally, and investing locally in service support.

The fourth is deeper customer partnerships. To be a trusted partner in energy transition, Thermax’s customer engagement model must be more integrated. Our Key Account Management (KAM) programme is being rolled out to understand customers’ longer-term priorities and work with them on solutions. Lifecycle services will be an important part of these relationships. Our installed base gives us the opportunity to support customers through operations and maintenance, upgrades, retrofits and performance improvement. Thermax EDGE Live^®, our digital arm, can strengthen this further by helping customers improve operating performance.

Finally, growing functional expertise on the people front. Building new competencies requires enhanced functional capabilities in multiple areas, including digital, manufacturing, quality, sourcing, and civil and construction. We will develop this expertise through a deliberate mix of targeted training and experienced external hiring.

Closing

In May this year, the world lost Dr. Ravi Pandit, a member of the Thermax Board and a leading light of India. Ravi consistently encouraged Thermax to invest more in R&D and to take on the difficult energy transition problems facing the country. He practised what he preached. His work in hydrogen fuel cells, sodium ion batteries and biofuels reflected a willingness to invest in technologies well before their commercial potential was clear. Thermax’s current R&D programme is influenced by his thinking and encouragement.

Our Key Account Management (KAM) programme is being rolled out to understand customers’ longer-term priorities and work with them on solutions.

I thank the Thermax Board for its guidance and trust. I thank our customers, partners, vendors and shareholders for their continued support. Most importantly, I thank my leadership team and Thermax employees across our offices, factories and project sites.

The NSE bell commemorated an important milestone in Thermax’s history. It also marked the beginning of the next phase—to build a Thermax that can thrive for the next 30 years.