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Thermax sees business prospects in Africa on the rise.
The company manufactures a slew of engineering goods, mainly industrial boilers for producing steam and electricity. In 2011-12, the company achieved a turnover of Rs 6,091 crore and made a net profit of Rs 407 crore.
Relative to its size, its Africa business is today not very big, but according to Mr Unnikrishnan, will grow. Last year, a fourth of its exports of Rs 600 crore came from Africa — from South Africa, Kenya, Nigeria and Ethiopia.
The company told a conference call of analysts recently that it intended to focus on Africa, because the market “witnessed good traction in the past couple of quarters.”
“We hear only of problems in Africa, but actually a lot of development is happening there,” the company’s Managing Director, Mr M. S. Unnikrishnan, told Business Line today. He said several multinational companies were setting up manufacturing units in the continent. “They all need boilers, heaters and coolers,” he said.
Mr Unnikrishnan said the “enquiries flow is even better than last year”, but he did not want to quantify in terms of numbers, so as not to tip his hand to competitors.
Thermax closed last year with orders-on-hand worth Rs 4,600 crore. A slowdown in the large power plants and captive power plants markets has impacted Thermax’s order booking and orders-on-hand which are down by 15 per cent and 25 per cent respectively over the previous year.
Mr Unnikrishnan told analysts recently that the company expected better inflows this year.
However, analysts are cautious. After the conference call conversations, analysts at Edelweiss Securities Ltd have said that while utility grade power plants are unlikely to see any significant traction over the next 12‐15 months, captive power and environmental business for TMX is expected to do well over the next two‐three years.
Management commentary indicated a weakening outlook and a tougher business
environment, which imply a slackening order intake for the rest of the year, said a report of Angel Broking. It also noted that the management had said it would be selective in picking orders.
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