Thermax Q1: consolidated PAT crashes 86% to ₹22 Cr on ₹91 Cr project cost overrun

Thermax reported a sharp profit collapse for Q1 FY27. Consolidated revenue from operations rose 7.1% YoY to ₹2,302.7 Cr, but PAT fell to just ₹21.8 Cr — down 85.6% YoY (₹151.5 Cr) and 91% sequentially off a ₹244.4 Cr Q4 (a seasonal peak, so the QoQ read is not the story). PBT dropped to ₹42.1 Cr from ₹211.5 Cr. On a standalone basis the company slipped into a ₹18.1 Cr loss versus a ₹47 Cr profit a year ago.

The collapse is largely one-off driven: a ₹91 Cr increase in the estimated cost to complete a single Industrial Infra project, recognised this quarter within operating expenses (no exceptional-item line). The YoY comparison is further distorted because year-ago Q1 carried ₹55.8 Cr of Package Scheme of Incentives income versus ₹2.5 Cr now. Adjusting both sides, underlying PBT still fell roughly 14% YoY — so the quarter is genuinely weak, not merely optically hit. Net margin compressed to 0.9% from 6.8%; the Industrial Infra segment result swung to a ₹70.7 Cr loss, and Industrial Products softened on lower export sales.

The stock went into the print at ₹4,240, down 16.7% over the past month of trading.

Management's Q4 concall had guided to strong FY27 revenue growth on a 27%-higher order book while explicitly flagging near-term margin pressure from legacy low-margin projects and raw-material costs — this quarter's overrun on a legacy Infra project is exactly that risk materialising, but well beyond a merely 'cautious' scenario, so the print misses the profitability side of the thesis even as the growth thesis holds. The order side stayed strong: order balance ₹14,045 Cr, up 23% YoY, including a fresh order of over ₹400 Cr for boiler pressure parts for a US data-centre project — validating the data-centre opportunity flagged on the call — though order booking was flat at ₹2,809 Cr (+2%). No published Q1 consensus figure could be located, but an unforeseen cost overrun of this size makes the print a clear negative surprise against any reasonable model.