Shares of energy equipment maker Thermax Ltd. jumped as much as 5 percent after the company bagged an order worth $157 million from a leading African industry major.
MS Unnikrishnan, managing director of Thermax, said the most of the income from the order will come in the following financial year.
Revenue recognition will partially start in the current year, but majority will come in FY19. This will be a pre-assembled order.MS Unnikrishnan, MD, Thermax
The company will be supplying four utility boilers, eight heat recovery steam generators and two gas steam generators for the refinery and petrochemical project in Nigeria. Thermax had priced the order competitively compared to its European and American rivals, said Unnikrishnan.
Thermax usually sends and assembles the parts on the project site, but for this order, because of limitation of resources on site, the product will be pre-assembled and sent to the site in special containers.
The company had a consolidated order book of Rs 4,653 crore for the December ended quarter.
The domestic order inflow for the company has been weak in the previous quarters and is yet to see any major improvement.
For standard products there could be good demand in the domestic market; and for the project business I will have to depend a lot more on the international market in FY17-18.MS Unnikrishnan, MD, Thermax
In the ongoing financial year, Thermax expects orders from Indian oil refiners as they start upgrading refineries to Bharat Stage-VI emission norms that will roll out by 2020. The company is also eyeing an order related to expansion of two oil refineries that the government is planning, but not in 2017-18.
Shares of Thermax have defied analyst expectations, rising 39 percent year-to-date. 74 percent of the analysts tracked by Bloomberg have a ‘sell' rating on the stock with a 12-month consensus target price of Rs 788 apiece compared to its prevailing price of Rs 1,035 at noon on Tuesday.
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