Thermax Q1 Results: Profit Hit By One-Time Provision For Ongoing Litigation

Thermax Ltd.'s first-quarter profit rose marginally, impacted by one-time provisions for ongoing litigation.

The clean energy provider's net profit rose 1.69% year-on-year to Rs 59.95 crore for the three months ended June, according to an exchange filing. This was due to the adverse impact of an exceptional provision of Rs 50.63 crore on an ongoing litigation, the filing said.

Thermax Q1 Highlights (Consolidated YoY):

• Revenue from operations rose 16.8% to Rs 1,932.96 crore on higher execution of projects.

• Ebitda rose 37.6% to Rs 132.20 crore on higher sales.

• Operating margin at 6.84% against 5.80% a year ago.

The company reported a one-time exceptional provision to carry out repair and damage work for a broken-down gas turbine generator at a project.

As per the regulatory award, the company was directed to repair and reinstate the GTG under the defect liability obligation. Customers too were allowed to claim additional expenditure along with interest estimated at Rs 245 crore, the company said.

Following an independent legal opinion, the company has provisioned an amount of Rs 50.63 crore and does not consider it important to provision for the balance amount, it said.

The company said they are in the process of filing an application before the Bombay High Court to set aside the entire award and claims it is reasonably confident of the issue being decided in its favour.

Shares of Thermax closed 3% down on the BSE as compared with a 0.10% drop in the benchmark Sensex.