Mumbai– Shares of Thermax Ltd. fell more than 16% Friday after the company reported a steep decline in first-quarter profit, driven largely by a cost overrun on a project in its Industrial Infrastructure business.
The stock dropped as much as 16.08% during intraday trading to Rs 3,566.90 on the Bombay Stock Exchange. Around midday, the shares were trading near the session low at Rs 3,680, down 13.43%.
The selloff followed Thermax’s June-quarter results, which showed consolidated net profit falling 83.4% year over year to Rs 25.2 crore from Rs 152.4 crore in the same period a year earlier.
Revenue from operations increased 6.7% to Rs 2,303 crore from Rs 2,158 crore.
Operating performance weakened sharply, with earnings before interest, taxes, depreciation and amortization declining 69.5% to Rs 68.6 crore from Rs 225 crore. The EBITDA margin narrowed to 3% from 10.4%.
Thermax attributed the weak results primarily to a Rs 91 crore increase in the estimated cost needed to complete a project in its Industrial Infrastructure segment. The revised estimate followed developments identified during the quarter.
The company also noted that the corresponding quarter of the previous fiscal year included Rs 56 crore in income received by a subsidiary under the Package Scheme of Incentives in the Industrial Infrastructure segment.
Lower export sales also weighed on the profitability of Thermax’s Industrial Products business during the quarter.
Separately, the company’s board approved a scheme of arrangement and amalgamation involving Thermax Bioenergy Solutions Private Ltd., Thermax Cooling Solutions Ltd. and Thermax Ltd. (Source: IANS)
