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While there is an environment of all-round selling and decline in the stock market today, the shares of engineering giant Thermax Ltd have made investors rich. Today, the company’s shares registered a strong rise of up to 12% in a single day, which is the biggest gain in a single day in the last four years. With this rise, the stock was seen trading at the level of Rs 4,700 around 12:15 pm.

Fourth quarter results were better than expected

The main reason for this ‘rocket’ like rise in Thermax shares is the company’s excellent fourth quarter (Q4) results. The company’s net profit in the January-March quarter increased by 19% to Rs 244.3 crore, while the market had expected it to be Rs 219 crore. Not only profit, the total revenue of the company has also reached Rs 3,428 crore, surpassing the estimated Rs 3,277 crore.

Tremendous improvement in EBITDA and margins

The company’s operating performance (EBITDA) also showed excellent strength. It stood at Rs 374.3 crore with a growth of 24.9%. Most importantly, the company’s EBITDA margin has also improved to 10.9% from 9.8% last year, which is much better than market experts’ expectations.

Declaration of dividend and big order of Rs 1600 crore

Along with the results, the company’s board has recommended a final dividend of Rs 14 per share for FY 2026. Additionally, the company has received a large boiler package order worth Rs 1,600 crore during the quarter. This big order has further strengthened the confidence of investors about the future growth of the company.

Light pressure seen in these segments

Although the overall results were excellent, pressure was also seen on some segments of the company. In the chemicals segment, profit was below expectations due to rising raw material costs and changes in product mix. At the same time, in the Green Solutions business too, there has been a slight impact on the margins due to increase in project costs.

Expert view for investors: Will the stock go higher?

Thermax has strong fundamentals (ROCE 16% and ROE 13%) and the company’s debt burden is also low. But a matter of concern for investors is its valuation.

• P/E Ratio: Currently the company’s P/E is around 70, which is much higher than the sector average.

• Expensive Stock: The stock appears to be in the ‘expensive zone’ due to the high P/B ratio.

Experts believe that this is a quality stock for long term investors, but due to high valuation in the short term, one should be cautious in making new purchases as there may be a risk of profit booking.