Thermax Share price and Fundamental Analysis

Company History

Incorporated in 1966 as Wanson India by A.S. Bhathena, Thermax Group is a Rs. 8,090 crore company headquartered in Pune, India. The Company offers integrated solutions in heating, cooling, power generation, water treatment and recycling, air pollution control and chemicals, with an emphasis on ensuring clean air, clean energy and clean water. As a one-stop utility solutions provider, Thermax extends comprehensive operations and maintenance support allied to each of its business verticals as well as a multitude of several specialised services, including retrofitting, revamping, upgrading, and auditing.

Additionally, the Company has expanded its services portfolio by introducing digital solutions catering to all asset lifecycle need for a diverse range of its products. It operate globally through 34 international and 22 domestic offices, 14 manufacturing facilities - 10 in India and 4 overseas, spanning Europe and South East Asia. The company's international presence spans 90 countries across Asia, South East Asia, Africa, Europe, Americas and the Middle East. It has 10 wholly owned domestic subsidiaries and 22 wholly owned overseas subsidiaries.

Thermax Limited, a limited liability engineering company was set up in 1966 as Wanson India by A.S. Bhathena. The Company was established on 30th June, 1980. Tulsi Fine Chemical Industries Private Ltd and Kailas Castings Private Ltd were merged with the company with effective from 1st July of the year 1982. As at 1st July 1989, Thermax became a deemed public company. In the year 1991, T. K. Steel Industries Ltd was merged with the company. During the year 1994, the company's status was changed from deemed public company public company. The process heat division came out with a new boiler design in the year 1995, an oil fired smoke boiler, shell Max and Combiac, a boiler specially designed to burn agro fuels like rice and groundnut husk, saw dust, coffee waste etc. also in the same year of 1995, a Memorandum of Understanding (MoU) was signed with Bharat Shell for thermic fluid, therma, for heat transfer system. The process heat projects division received an order from PT South Pacific Viscose, an Indonesian Company for supply of 3 boilers of 22.5 tonnes per hour of steam. Energy System Division of the company was born in the year 1996 by the way of merger of two division, one in the energy area and the other in heat recovery area to pool the expertise with a view to addressing the heat recovery business and also in the same year launched fine circulation fluidised bed combustion boiler. The MoU was signed with Bharat Shell and the Process Heat Division of the company.

During the year 1997, the company had received the AD-Merkblatt certification for the entire manufacturing unit at Chinchwad. An electronic network called Thermnet linking all establishments of the company in the country was introduced during the year same year of 1997 and also Thermax had entered into a joint venture with Fuji Electric Company of Japan. The Company had introduced five new products in the standard packaged boiler range during the year 1998 and also launched a wide range of products incorporating Kawasaki modular technology in our Vapour Absorption Division. Thermax Co-gen Limited became a subsidiary of the company in the year 1999. During the same year 1999, the company had developed a more advanced process called PDP II. During the year 2000, Thermax had acquired ME Engineering, a UK-based company belonging to the Beel Industrial Boilers Plc group. The Company has signed an exclusive distribution agreement for South Asian markets with US company Purafil Inc to market their dry gas scrubbers popularly known as chemical filters. Thermax had signed a memorandum of understanding with the Society of Applied Microwave Electronics Engineering and Research for commercialisation of the latter's microwave disinfections system for treating pathological bio-medical waste generated by hospitals and research institutes. The Company had set up wholly owned subsidiary company in the US, namely Thermax Inc and another one in Detroit, USA in the year 2001. Thermax had acquired 50% of stake in Energy Performance Service (Thailand), a subsidiary of Energy Performance Service of Canada. The Company and Cummins Diesel Sales and Services had entered into a strategic alliance to provide attractive energy solutions to various industry segments.

With the investment of US $ 200,000, the company had incorporated a wholly owned overseas (WOS) subsidiary in Brazil during the year 2003. Thermax had bagged an order for Captive Power Plant in the year 2004. During the year 2004-05, the company's chemical plant at Paudh, near Mumbai had received the OHSAS 18001:1999 certification from BVQI. COFEX 2005 honored with special award for Thermax's contribution to the HVAC industry. Thermax had inked a technical know-how transfer and license agreement with Balcke-Durr, Germany in October of the year 2007 for dry and wet electrostatic precipitators (ESPs), air pollution control equipment for power, industrial and utility segments upto 300 MW.

As at February 2008, the company had signed a technical transfer license agreement with US-based Babcock & Wilcox Power Generation Group (B&W) to engineer, manufacture and sell sub critical B&W radiant utility boilers in India. As of May 2008, the company had inked a protocol of agreement for an export order, for supply of heat recovery steam generator (HRSG). Thermax had received an order from a major refinery in July of the year 2008, to supply pulverized coal fired boilers for their captive cogeneration plant valued at approximately Rs 8.2 billion and also in August of the same year 2008, received an order of Rs 4.15 billion, from a leading steel making for setting up a captive power plant for their upcoming blast furnace complex on an EPC basis. In 2008, Thermax started manufacturing chillers in China.In 2009, Thermax signed technology agreements with global leaders GE Water, USA and Wehrle Umwelt GmbH, Germany for advanced wastewater treatment. During the year under review, Thermax bagged its first IPP order worth Rs 1000 crore to build a 300 MW turnkey power plant in Andhra Pradesh.

On 26 August 2009, Thermax Limited and SPX Corporation, a global infrastructure leader in providing power plant equipment and services, announced the establishment of a strategic joint venture to focus on equipment and services for India's growing power sector. The JV will operate on the basis of a license agreement with Balcke-Durr GmbH, Germany, a 100% subsidiary of SPX Corporation. The joint venture investment will be on a 51% Thermax and 49% SPX ownership basis and the new company will be based in Pune, India.

On 20 December 2009, the foundation stone was laid for India's first public private partnership project for rural electrification at Shive village, Pune where Thermax will build solar thermal power plant with Department of Science & Technology, Government of India support. Thermax will also manage the operation & maintenance of the solar thermal power plant at Shive for a period of five years.

On 10 March 2010, Thermax and Babcock & Wilcox Power Generation Group, Inc. (B&W PGG), a global leader in power generation industry and the original Babcock & Wilcox, announced the formation of a strategic joint venture to engineer, manufacture and supply supercritical boilers for the Indian power sector. The joint venture will also manufacture subcritical boilers over 300 megawatts (MW) in size. Thermax will own 51% share of the joint venture while United States-based B&W PGG will have 49% ownership.

On 17 May 2010, Thermax signed a technology transfer license agreement with Lambion Energy Solutions, a German engineering company with expertise in converting waste to energy. The technology transfer will provide Thermax with high efficiency combustion systems for using biomass, high in moisture content, for energy generation. They will be integrated in its boilers and heaters with heat output ranging from 4 MW to 30 MW. Under the licensing agreement valid for a period of five years, a dedicated team from Thermax will work with Lambion to absorb and deploy this technology. Thermax will have an exclusive license to market heating systems, equipped with the new technology in India and SAARC countries, South East Asia, Middle East and Africa.

On 9 November 2010, Thermax announced the acquisition of Danstoker A/S, a leading European boiler manufacturer and its German subsidiary, Omnical Kessel. The acquisition valued at Euro 29.5 million was completed on 8 November 2010. Danstoker, headquartered in Herning, Denmark has a 75 year tradition in manufacturing biomass based boilers and waste heat recovery systems for a wide range of industries. Its manufacturing facilities are located in both Denmark and Germany, where it had acquired Omnical in 2003. This acquisition will enable Thermax to leverage the ongoing renewable energy movement of Europe aimed at generating 20% of its overall energy generation from renewables. The acquisition offers a strategic fit for Thermax's packaged boiler business, under the Cooling & Heating Business Unit.

In July 2011, Thermax unveiled unique solar cooling system at MNRE's Solar Energy Centre. On 25 July 2011, Thermax Limited and Amonix, Inc. announced an agreement that will bring proven, concentrated photovoltaic (CPV) technology for clean power generation to India. In this exclusive partnership, Amonix will offer high-performance solar power generation systems and Thermax will be the Engineering, Procurement and Construction (EPC) partner to provide turnkey solutions to customers in India. Amonix is the world leader in the design and manufacture of CPV technology.

On 22 March 2012, Thermax announced the acquisition of the Steam Division of Virgo Valves & Controls Ltd, India and its German subsidiary company Rifox - Hans Richter GmbH, a leading steam traps and allied steam accessories manufacturer. The acquisition was completed on 21 March 2012 for a value of Rs. 13.39 crore (Euro 2 million). The acquisition will bring to the Thermax fold the manufacturing facilities of Rifox-Virgo in Germany and in India. The acquisition offers a strategic fit for Thermax's steam engineering business.

In FY 2017-18, the Company won the highest ever export contract of USD 157 million from a leading African conglomerate for its refinery project coming up in Nigeria. Commercial production from its newly constructed facility at Dahej, Gujarat commenced on October 31, 2017. On September 13th, 2017, it won a USD 43 million contract from a leading cement company in UAE for a turnkey captive power plant, the first EPC order that Thermax will be executing for a GCC (Gulf Co-operation Council) country. It inaugurated the new manufacturing facility in Indonesia on July 26, 2017, expanding its footprint in international markets, especially the ASEAN countries. The Company, through its step-down subsidiary in Denmark, acquired 100% stake in Barite Investments Sp. z.o.o., Poland (Barite). With this, Danstoker Poland Sp. Zoo., erstwhile 'Barite', became a stepdown subsidiary of the company. Through its step-down subsidiary in Denmark, it acquired certain assets and production activities of Barite Investments Sp. z.o.o. in Poland, for advancing its business in Eastern Europe. It concluded a Rs. 327 crore Order from a public sector company based in Western India for its upcoming chemical plant. The project is for a BTG (Boiler-Turbine-Generator) package on EPC basis for its captive co generation power plant of 2 x 65 MW capacity. It secured a Rs. 503 crore order from a leading public sector fertiliser company to set up three natural gas based EPC co-generation plants (each of 20 MW capacity) at its facilities in Haryana and Punjab. It commissioned a 5.76 MW rooftop solar PV captive power plant, the second largest plant in India for a public sector hydrocarbon company.

During 2018, the company increased its equity stake from 54.67% to 76% in First Energy Private Limited (FEPL), Pune, an alternative energy solutions company. New 22,000 sq. ft. manufacturing facility for steam engineering products was commissioned at Savli, Gujarat in FY'18. The emerging Process Cooling portfolio of Thermax has been structured as a new Strategic Business Unit, effective April 1, 2018, to bring about better focus at a global level. The Solar business commissioned India's second largest single-roof solar PV project on a turnkey basis. In May 2018, Thermax entered into a preliminary understanding with Babcock & Wilcox India Holdings Inc. (B&W) to acquire the shareholding of the latter.

In FY'19, Company concluded an order of Rs. 340 crore from a leading Indian steel major for a specially designed waste heat boiler, electric turbo generators and ancillary equipment for their production facility in Maharashtra, India. On January 31, 2019, it inaugurated production unit at Sri City, Andhra Pradesh to manufacture a wide range of vapour absorption machines comprising chillers, heat pumps and heaters in its first phase, with a capacity of 400 machines per year. The division launched a Remote Online Support System (ROSS) - a web-based solution that helps to monitor, troubleshoot and supervise chillers remotely. During the year, the company introduced a new series of Thermax absorption chillers that are designed to provide an additional efficiency of 7% to 8% over traditional offerings. It acquired the JV partner's stake in Thermax Babcock & Wilcox Energy Solutions (TBWES), which became a wholly owned subsidiary of the company. Subsequently, the shareholders approved the transfer of the Boiler & Heater (B&H) business to TBWES through a 'slump sale' effective October 1, 2019. It has acquired the entire stake in Thermax SPX Energy Technologies Ltd. (TSPX) held by the joint venture partners namely, Mutares Holding-24 AG, Germany and Balcke Duerr GmbH, Germany. Subsequent to the acquisition, TSPX has now become a wholly owned subsidiary of Thermax. It commissioned a 40 MW coal-based captive power plant for a leading cement and clinker manufacturer in the UAE; Thermax's first full-fledged EPC project in the Middle East, for a leading cement and manufacturing company in UAE. It commissioned 21 units of exhaust gas boilers for a power generation and distribution company in Bangladesh for their 200 MW integrated power plant. The Company, has set up a step-down subsidiary company in Nigeria (through Wholly Owned Subsidiary (WOS) of the company, Thermax Engineering Construction Company Limited), named 'Thermax Engineering Construction FZE', which was incorporated on August 31, 2018, as a prerequisite for executing projects in the region. It commissioned a 25 MW captive cogen plant for a paper manufacturing unit located in Samaal, the Philippines on an EPC basis to generate power and steam for the process. This was a repeat order from the customer, the earlier one being the first overseas power plant for Thermax.

In the third quarter of FY2019-20, Company concluded another order of Rs. 431 crore from a public-private joint venture power company to set up two FGD systems at their thermal power plant in Jharkhand, comprising two units of FGD systems of 525 MW capacity each. It further concluded an order of Rs. 471 crore from an Indian government power company to set up two Flue Gas Desulphurization (FGD) systems at their thermal power plant in Jharkhand. As a part of customer's drive to meet the mandate for regulating SOx emissions from coal fired power plants, they plan to install two units of FGD systems of 500 MW capacity each at their plant. It completed the supply of its largest export order comprising four utility boilers, eight heat recovery steam generators, two flue gas steam generators and a hot oil heater for the largest refinery and petrochemical project in Nigeria, West Africa, all in a modular form. Apart from these, it received the ISO 27001:2013 certification, the highest and internationally accepted benchmark in information security standards. During the year 2020, the Water and Waste Solutions business developed several new products such as in-house multi-effect evaporators (for zero liquid discharge systems), prefabricated systems and portable water testing kits. As a value add, plant audit service was extended to customers and spares business was enhanced with focus on on-time delivery.

In FY 2020-21, Company booked an order of Rs. 320 crore to set up a captive Combined Heat and Power (CHP) plant on EPC basis for a public sector biorefinery company in Assam. It partnered with Defence Research and Development Organisation (DRDO) for the supply of fuel cell stacks, to realize India's ambition of developing homegrown Air Independent Propulsion system for the Scorpene class submarines of the Indian Navy. A crucial milestone of the programme was the successful demonstration of a land based prototype to the Indian Navy on March 8, 2021. The group announced an agreement with Power Roll, a developer of unique, low-cost and lightweight flexible solar films, to develop the market for solar film in India. It won first export order for the Flue Gas Desulphurisation unit during the year 2021, from a customer in Saudi Arabia. This first order to supply air pollution equipment for lignin fired boilers and alumina calcination added a new layer to the company's strength in the niche domain. The Steam Engineering division secured orders from a Malaysia-based rubber glove manufacturer for steam accessories and services. This has been the fastest growing industry since January 2020, and gained further momentum amid the rise in COVID-19 cases globally. To further boost efficiencies, Thermax undertook restructuring during the year in its global operations to consolidate its presence. It closed down its China subsidiary - TZL (Thermax (Zhejiang) Cooling & Heating Engineering Co. Limited, China) and has proposed liquidation of Thermax Senegal S.A.R.L, post winding up of operations. Thermax also sold a non-profitable service business segment of Boilerworks A/S. Entities have been established in Thailand and Nigeria to steer the expansion of the project business overseas. Thermax's latest state-of-the-art Cooling plant at Sri City continued to leverage its automation capabilities, and delivered 30 machines in September 2020 - the highest number of units in a single month. With the commissioning of Phase II of resin production at Thermax's Dahej plant in Gujarat during the year, manufacturing capacity at the facility went up to 20,000 m3 per year from 10,000 m3 in the previous fiscal. One of the key projects executed by Thermax during the pandemic was the remote commissioning of a large auxiliary boiler in Egypt. With meticulous planning and execution, TBWES, Company's subsidiary, commissioned a unit of 50 TPH natural gas, acetone and water gas fired boiler for a chemical company. All critical processes were carried out through Remote Online Service Support (ROSS). The operations were conceptualised with adequate SOPs and O&M manuals, and a live view of the Data Collection System was conducted. The project paved the way for Thermax to develop a service model that can yield substantial cost savings for its customers. The company has set up a step-down subsidiary company through a wholly owned subsidiary of the company, Thermax Onsite Energy Solutions Limited (TOESL) named Enernxt Private Limited, which was incorporated on January 5, 2021, for starting the Bio-CNG business of TOESL. During the year 2021, it acquired the remaining 24% stake in First Energy Private Limited (FEPL) effective December 21, 2020. It approved the voluntary liquidation of Thermax Sustainable Energy Solutions Limited (TSES), a wholly owned subsidiary of the company under the Insolvency and Bankruptcy Code, 2016, which commenced on April 5, 2021. Besides this, it approved the liquidation and writing off of investments in its step-down wholly owned subsidiaries Thermax Hong Kong Limited (THKL) and Thermax (Zhejiang) Cooling and Heating Engineering Company Ltd. (TZL China) on March 17, 2021.

In FY 2021-22, the Company bagged Rs. 1, 176 crore order from an Indian Public Sector Undertaking (PSU) for setting up a sulphur recovery block. It concluded two large flue gas desulphurisation (FGD) orders in Q3 and Q4 of Rs. 830 crore and Rs. 545 crore respectively from power sector companies. It expanded the renewable energy business to offer solutions in wind and storage batteries besides solar on an opex basis. It launched 'Thermax Edge', a comprehensive IoT-based digital platform for customers to fulfill their product and service requirements.

In July 2022, Thermax incorporated Thermax Bioenergy Solutions Private Limited (TBSPL) thru shareholders' agreement with EverEnviro Resource Management for setting up a bio-CNG turnkeyprojects. The Company acquired minority stakes in ExactSpace and Covacsis.

In 2023, the Company's subsidiary, First Energy Private Limited (FEPL), commissioned 180 MWp captive Solar and solar-wind hybrid farms in Maharashtra, Gujarat and Tamil Nadu. Four specialised operations centres were set up in Pune and Chennai for constant monitoring of assets.

In 2023, 4 x 1000 TR hot water absorption chillers commissioned for a synthetic textile manufacturer in western India, to be utilised for process air cooling. It Commissioned the first pre-fabricated MEE as part of the ETP-ZLD solutions for the F&B industry; executed a large 33 TPH biomass cogeneration plant for an aluminium major in Karnataka; commissioned biomass boiler plants for steam supply to a pharmaceutical major, a zero liquid discharge plant for a steel major, and two solar PV plants for power supply to two chemical companies.