Energy and environment company Thermax Ltd will concentrate on increasing revenue from services and focus on its international business to battle the impact of downturn in the power sector which has affected its profits and revenue.
The company’s Q1-13 results indicated a 16.5 per cent dip in its net profit over last year and lower revenues and order book position. The company’s post-tax profit during the quarter stood at Rs 67 crore (against Rs 80 crore in Q1-12). Total income was also 5.8 per cent down at Rs 983 crore (Rs 1,044 crore).
While in the three-month period ending June 30, 2012 Thermax bagged Rs 1,258 crore worth of fresh orders, the order balance at the end of the quarter stood at Rs 4,474 crore, lower compared to the same period last year.
On a consolidated basis, the Group’s PAT at Rs 52 crore was 40 per cent lower than Rs 86 crore posted in the same period last year. Income at Rs 1,170 crore was 5.6 per cent down YoY. The order balance dropped to stand at Rs 5,042 crore compared to Rs 6,804 crore last year. Speaking at the company’s AGM here, the Chairman, Ms Meher Pudumjee said the Eurozone crisis and the policy paralysis at the domestic level had led to new power projects coming to a standstill. “We saw few orders getting finalised and many scrambling for the same piece of pie,” she said, adding this affected both the order book as well as margins.
Thermax plans to concentrate on the services business, such as overhaul and maintenance to de-risk against the downturn in the capital goods sector. The recent acquisition of German company Rifox will also help enhance this stream, she said.
Currently the international business — which includes business of its overseas subsidiaries as well as exports — accounts for 22-25 per cent of its turnover. The company plans to grow this to 30 per cent.