Sunday, August 28, 2011

Thermax - Buy




It has shown a marked improvement in FY11 performance compared with the past two years. Revenue growth has outpaced peers in Q1 FY12. The current order book gives it a revenue visibility for more than a year but fresh order inflows are needed for revenue to grow at the same pace. It has corrected by 18% in the past one month and trades at P/E of 14, less than half its average P/E of past 5 years.


The scrip gave negative returns in 1 year and is likely to move side ways in next 2 quarters. Long term portfolio investors should utilize deep cuts and buy around Rs.425 and hold for 1-2 years for decent spike in prices.


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