Thermax Shares Hit 52-Week Low After Q2 Net Profit Declines

Thermax shares fell nearly 20% to a 52-week low following the release of its Q2 FY27 financial results. Despite a marginal rise in operational revenue, the company reported a drop in net profit, prompting JM Financial to maintain its sell rating.

Shares of Thermax experienced a sharp decline on Friday, falling close to 20 percent to hit a 52-week low. The drop followed the company's financial results for the second quarter of FY27, which showed a decline in net profit attributable to equity shareholders compared to the same period in the previous year.

For Q2FY27, Thermax reported a net profit of ₹114.54 crore. This is lower than the ₹119.66 crore reported in Q2FY26. In contrast, revenue from operations saw a marginal increase, reaching ₹2,755.87 crore during the quarter under review.

Following the performance, Thermax has updated its financial outlook. The company raised its H2 FY27 revenue guidance to above ₹7,000 crore, adjusting from its previous guidance of ₹3,000 crore per quarter. Company management has indicated that it anticipates double-digit revenue growth in both the third and fourth quarters of FY27, which it attributes to the strong execution of its current backlog.

In response to the earnings report, brokerage firm JM Financial maintained its sell rating on Thermax. The firm set a sum-of-the-parts (SotP)-based target price of ₹3,435. According to the brokerage, this target price implies a price-to-earnings multiple of 45 times based on H1FY29E estimates.

JM Financial also highlighted that the stock has faced sustained downward pressure. The brokerage noted that the security had previously corrected sharply, declining 23 percent following the release of the Q1FY27 results.

"This situation highlights how the market reacts immediately to bottom-line pressures, even when revenue shows marginal growth and future guidance is revised upward. While Thermax management is banking on strong order backlogs to drive double-digit growth in the upcoming quarters, brokerages remain cautious based on current earnings and valuations. For businesses and investors alike, this underscores the importance of balancing optimistic forward-looking projections with consistent profitability in short-term performance reports." — Dr. Shishir Gupta, Founder & CEO, StartupLanes