Engineering firm Thermax aims to reach ₹13,000 crore in revenue by FY27, supported by a strong order book of over ₹14,000 crore. While the company is winning major data center contracts in the US, investors are watching for profit margin recovery after a sharp earnings decline in the recent quarter.
Thermax is setting an ambitious growth roadmap, targeting revenue of ₹13,000 crore by FY27. This growth is being driven by strong demand for the company’s heating and cooling solutions, particularly from the booming data center market. As of June 30, 2026, the company reported a healthy order book of ₹14,045 crore, providing visibility for future operations.
Expanding Footprint in Data Centers
The company has made significant inroads into international markets, notably securing a ₹400-crore order for boiler pressure parts for a data center project in the United States. This win demonstrates the company's ability to compete in specialized, high-demand sectors abroad. Domestically, Thermax is also leveraging its engineering expertise to supply cooling and recycling solutions to power-intensive industries like semiconductor manufacturing. These new focus areas are intended to help the company diversify beyond its traditional industrial customer base.
Balancing Growth with Profit Pressure
Despite the positive outlook on revenue, the company’s recent financial performance has faced challenges. In the first quarter of FY27, the company's consolidated profit after tax fell by 85% compared to the previous year, dropping to ₹22 crore. This decline was largely due to a ₹91-crore cost overrun on a legacy project within its Industrial Infra segment.
To address this, management is shifting its strategy away from long-duration, fixed-price contracts. These older contracts often carry the risk of cost blowouts if material prices or wages rise significantly during the project timeline. By moving toward more flexible contract terms, the company aims to reduce the risk of future cost shocks that hit its profit margins.
Market Sentiment and Valuations
Investors continue to evaluate the company’s high valuation, with the stock currently trading at a price-to-earnings (P/E) ratio of approximately 64.9. Despite recent volatility—with the stock trading around the ₹3,138 level in early October 2026—some analysts see long-term potential. For example, Kotak Institutional Equities recently upgraded the stock to a 'Buy' rating with a target price of ₹4,000, citing the company's potential in the biogas and data center infrastructure segments.
What Investors Should Track
The company’s ability to achieve its ₹13,000 crore revenue target will depend on its execution efficiency. The primary monitorable for investors will be whether the company can successfully transition away from legacy, fixed-price contracts to protect its profit margins. Additionally, the speed of converting its ₹14,045 crore order book into revenue, while avoiding further cost overruns, will remain a key focus for shareholders in the coming quarters.