Thermax profit falls despite operating growth as other income fades
Standalone margin improved sequentially, but the year-on-year profit comparison was hurt by a 76.29% drop in other income.
Filed 20 May 2026, 18:07 IST · after market close · Thermax Ltd (THERMAX)
Key takeaways
- Standalone operating margin rose 2.32 percentage points sequentially as revenue grew +39.20% and expenses grew +35.67%.
- Net profit fell -26.91% year on year despite operating profit growth of +12.98%, as other income declined -76.29%.
- The stock gained +11.84% on the reaction day, far above its 3.36% median absolute move after the previous eight results.
Price around the results
Operating recovery did not translate into annual profit growth
Thermax's standalone revenue grew +12.89% year on year to Rs 2,225.85 cr, while operating profit rose +12.98% to Rs 244.97 cr. That was not enough to offset the sharp fall in other income, which left profit before tax down -25.26% and net profit down -26.91% to Rs 201.04 cr. Other income still accounted for 14.05% of pre-tax profit, making the reported profit comparison notably dependent on non-operating income.
Sequential margin improvement continued into Q4FY26
Quarter on quarter, revenue increased +39.20% while expenses rose +35.67%, allowing operating margin to expand 2.32 percentage points to 11.01%. Lower interest costs of -6.12%, a 2.63-percentage-point decline in the tax rate and lower depreciation also supported the sequential rise in profit. The margin has improved for four consecutive quarters, from 4.62% in Q1FY26 to 11.01% in Q4FY26.
Margin remains below the Industrials peer median
Thermax's 11.01% operating margin was 4.65 percentage points below the 15.66% median for the 71 Industrials peers that had reported the same quarter. The year-on-year margin was broadly flat, rising just 0.01 percentage points, because expenses grew almost in line with revenue at +12.88% versus +12.89%.
Orders add visibility while Chemicals faces cost pressure
Management said the company secured an approximately Rs 1,600 cr boiler package order for a 1 x 800 MW ultra-supercritical power plant in Central India. Management also said TOESL won its first community steam project, comprising 2 x 30 TPH, for a food park in Mehsana, Gujarat. The presentation flags raw-material cost escalation linked to West Asia geopolitical risks and weaker ceramic demand in the Chemicals business, while also noting Rs 4 cr of new Chemicals orders from pharma and steel customers.
Market reaction was unusually large for Thermax
The stock rose +11.84% on the reaction day, with a +4.49% opening gap and volume at 14.16 times the reference level. That move was much larger than the 3.36% median absolute reaction across the previous eight results, which were evenly split between four gains and four declines. The stock was up +7.61% by day five and +19.38% by day fifteen.
Q4FY26 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,226 cr | ₹1,599 cr | +39.20% | +12.89% |
| Other income | ₹35 cr | ₹124 cr | -71.45% | -76.29% |
| Expenses | ₹1,981 cr | ₹1,460 cr | +35.67% | +12.88% |
| Operating profit | ₹245 cr | ₹139 cr | +76.34% | +12.98% |
| Operating margin (%) | 11.01% | 8.69% | — | — |
| Interest | ₹8 cr | ₹8 cr | -6.12% | -7.75% |
| Depreciation | ₹20 cr | ₹27 cr | -24.57% | +0.10% |
| Profit before tax | ₹252 cr | ₹227 cr | +10.79% | -25.26% |
| Tax | ₹51 cr | ₹52 cr | -1.94% | -17.94% |
| Net profit | ₹201 cr | ₹175 cr | +14.57% | -26.91% |
| EPS (₹) | ₹16.87 | ₹14.73 | +14.53% | -26.94% |
Operating margin of 11.01% compares with a Industrials sector median of 15.66% across 71 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +11.84% | +12.46% |
| Next session | +8.67% | — |
| 5 sessions | +7.61% | +10.41% |
| 15 sessions | +19.38% | — |
| 30 sessions | +16.30% | — |
Volume on the results session was 14.16× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
New orders
- Thermax secured an approximately Rs. 1,600 crore boiler package order for a 1 x 800 MW ultra supercritical power plant.
- The Chemicals business secured a Rs. 4 crore order from pharma and steel sector customers.
New initiatives
- TOESL secured its first community steam project for a food park in Mehsana, Gujarat.
- Thermax launched a new website for its Chemicals business to improve digital experience and sales enablement.
- Thermax launched a new integrated global website covering its businesses, solutions, industries and capabilities.
Problems & risks
- The chemicals business faced raw material cost escalation from West Asia geopolitical risks and weaker ceramic demand.
What to watch
- Whether standalone operating margin holds above 11.01% after four consecutive quarterly increases.
- Whether other income remains near its 14.05% contribution to pre-tax profit.
- Progress on the approximately Rs 1,600 cr boiler package order and the 2 x 30 TPH community steam project.