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Thermax + Suzlon Result Analysis

January 30, 2008

Thermax:Thermax reported Q308 consolidated PAT of Rs797mn, up 51% YoY, ahead of our estimate of Rs703mn. This was driven by strong revenue growth of 57% YoY, higher than expected other income and lower-than-expected taxes.

Thermax reported Q3 consolidated revenues of Rs9.3bn, up 57% YoY and ahead of our estimates of Rs9bn. Energy segment revenues grew 62% YoY and environment business revenues grew 30% YoY. Thermax Q3 EBITDA margin of 11.7% was down 69bps YoY and below our estimate of 12.2% primarily on account of higher than expected material costs.

Thermax’s Q308 order backlog is Rs29.2bn, lower than the Rs32bn order backlog at the end of H108.

Suzlon Energy:
Suzlon had a disappointing quarter in our view with 3QFY08 PAT at Rs1.5bn down 13% YoY, which was 39% below CIR expectations of Rs2.5bn on the back of poor operating margins especially on the WTG side, higher depreciation and exceptionally high tax.

Suzlon took a hite of Rs 960 mn in Q3 FY08. However, an order backlog of Rs177bn, up 122% YoY, comprising Rs147bn of international orders. In MW terms Suzlon has a robust order backlog of 3,358MW comprising 2,917MW of international orders.

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