Thermax Ltd - Annual Report Summary
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About the company:
Incorporated in 1966 as Wanson India by A.S. Bhathena, Thermax Group is headquartered in Pune, India
It is a leading conglomerate in energy and the environment space, strategically spreading its operations to markets worldwide
Operates under three business segments – Energy, Environment & Chemical
Thermax offers integrated solutions in heating, cooling, power generation, water treatment and recycling, air pollution control, and chemicals with a focus on ensuring clean air, clean energy, and clean water.
About the management:
Ms. Meher Pudumjee is the Chairperson of the company. A postgraduate in Chemical Engineering from the Imperial College of Science & Technology, London, Meher joined Thermax as a trainee engineer in August 1990. A year later, along with her husband Pheroz Pudumjee, they took over the responsibility of turning around a Thermax subsidiary company in the UK.
Ms.Pudumjee represented India at the Asian Business Women’s Conference in Osaka in 2006. The World Economic Forum in 2008 selected her as a Young Global Leader for her professional accomplishment, commitment to society and potential to contribute to shaping the future of the world. She was selected CEO of the Year, 2009 by Business Standard.
Ashish Bhandari is the Managing Director & CEO of Thermax Group. Ashish was the Vice President–India and South Asia region at Baker Hughes (formerly a GE company). He joined GE in 2005 in Houston, USA and relocated to Gurgaon in 2011. He is credited with building GE Oil and Gas into one of GE’s biggest businesses in India and for the successful integration of Baker Hughes and GE Oil and Gas during a time of significant transition
Ashish completed his Bachelor of Technology in Electrical Engineering (B. Tech) from the Indian Institute of Technology, Mumbai. He received his master’s degree in Business Administration from Duke University.
The break-up of the order book and Revenue contribution:
Energy Segment:
Thermax Babcock & Wilcox Energy Solutions (TBWES), a wholly-owned subsidiary, provides steam generation for process and power needs, as well as waste heat recovery solutions.
First Energy Private Limited (FEPL), a wholly-owned subsidiary, providing Renewable Energy Solutions has executed more than 150 predominantly rooftop projects, totalling more than 72Â MW of green power output.
Thermax Onsite Energy Solutions Limited (TOESL), a wholly-owned subsidiary, offers Build-Own-Operate services on a long-term contractual basis.
Thermax continues to enhance its digital capabilities to maintain a competitive advantage. In addition to focussing on digitalisation
With a current contracted base of more than 3,500 MW, Thermax has a strong edge in constructing best-in-class captive power, cogeneration, and trigeneration plants on an EPC basis
Under this division - Thermax concluded an order of Rs. 1,176 cr from an Indian public sector refinery to set up their sulphur recovery block on a lump sum turnkey basis
Environment Segment:
The Environment segment includes the Water and Waste Solutions (WWS) and Air Pollution Control (APC) businesses
The WWS business has completed more than 25,000 standards and over 600 industrial large-scale installations up to FY 2021-22
APC business of Thermax has completed over 25,000 installations across a wide range of industries including power, cement, steel, sugar, refinery & petrochemicals, paper, chemical, food, textiles and fertiliser sectors.
The company sees an opportunity for its offerings for sewage recycling solutions with newer compact products based on membrane bioreactor (MBR) and sequential batch reactor (SBR) technologies
Emphasis on zero liquid discharge (ZLD) systems with advanced multi-effect evaporator (MEE) and mechanical vapour recompression (MVR) technologies have been developed in-house
Chemical Segment:
Thermax is widely recognised as a leading manufacturer and exporter of ion exchange resins and a pioneer in water and wastewater treatment chemicals
An increase in demand for solvent-free and low total organic carbon (TOC) resins for ultrapure water applications in industries such as food, pharma, and electronics bodes well for the company
The company is also witnessing a rise in demand for RO, multi-effect evaporator (MEE), and incinerators which help boost water treatment chemicals that aid in zero liquid discharge and effluent treatment
Tulsion® ion exchange resins from Thermax met the requirements- of Africa’s largest producer of granulated urea fertiliser for DM and condensate polishing applications, resulting in a second order for another DM plant from its cement group.
Opportunities and Threats:
Thermax is poised to benefit from the comprehensive switch to clean energy as emphasised in the COP26 Energy Transition Council (ETC)
India has made a commitment to COP26 to reduce the carbon intensity to less than 45% by the end of the decade and net-zero carbon emissions by 2070
Air pollution control equipment, such as FGDs to arrest sulphur dioxide (SOx) and related services, would continue to be in demand as environmental regulations tighten in various locations, including MENA and other Asian countries, and would benefit the Company
Modularised equipment manufactured by Thermax is witnessing an encouraging response from overseas customers
In a shift from capex to opex, outsourcing is poised to set the pace for growth in the Company’s business across the globe
Many multinational corporations are making efforts to transition away from the use of fossil fuels and towards biomass. This poses a threat to Thermax’s capex and opex model.
Any adverse slowdown or pushback in regulations would impact demand for effluent treatment plants, zero liquid discharge solutions, and flue gas desulphurisation projects - all of which are part of Thermax’s Environment portfolio
Increasing raw material prices for certain chemicals and metals, such as steel will have an impact on the profitability
New Developments and future triggers
Under its R&D Division, the company is focussing on Bio-CNG. The company believes in the long term it could emerge as a meaningful segment and can become sufficiently large and the company could convince major developers of these kinds of projects even in Beirut to come in and actually take a stake in that subsidiary as well and become a partner.
Flexisource - a new product released by the company that allows the company to take various kinds of biomass and convert them into energy This has been particularly targeted to customers that currently run coal. Although costlier than a traditional boiler it has the flexibility to run on multiple fuels. This flexibility gives the customer the option to be able to run multiple different kinds of fuel which means that for many customers the payback would be less than two years and then it addresses their sustainability story as well
The company is excited about the launch of its Digital Asset Management solution - EDGETM which is an Enterprise Asset Performance Enhancement Solution. It integrates all the industrial Thermax installations across the globe and can perform data analytics at the click of a button. Thermax believes it will aid in its ability to service by better engaging with the customers for their spare parts and after-sales service support.
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