The kind of performance we have seen from ABB , Crompton Greaves nobody is happy to touch the capital goods and Thermax also falls in this category. But, I have different view for this stock. The company is an engineering solution provider for heat recovery, waste recovery, water treatment, etc. It caters to the core sector industries like cement, steel, fertilizer, dairy. The company has been a consistent performer.
There have been no slippages on quarter on quarter basis except for last year or a year back. One of their overseas subsidiary did not perform well and they had to take an exceptional hit. In FY11, its turnover went up close to one billion dollar. They posted an EPS of close to Rs 30 plus. Going by their Q1 performance, they have been able to maintain the topline of Rs 1,000 crore.
The profitability is always back ended, it comes in the second half of the year. The promoters hold 62% stake and 28-29% is held by institutional investors. It is debt free company and has a very low float. On can can lap these stocks in a market correction like this one.
The stock moved to about Rs 700 couple of month back. At that time people come out with buying ideas on the stock. But whenever there is a correction of this kind people first try to jump out of these stocks. This is the time where one should really accumulate the stock.
A positive view on this stock, largely on account of consistency in performance going ahead. They have an order pipeline of 18 months close to about Rs 7,000 crore order. Taking all this account and the reduction expected in commodity prices will be quite well for the stock. This stock can touch Rs 600 price in the next four-six months time.
