Expanding to new international markets is going to be of prime focus for Thermax Industries in the coming quarters.
Talking to The Pioneer, Managing Director and Chief Financial Officer, M U Unnikrishnan expressed concern about the headwinds faced by the Indian power sector since the last couple of quarters due to a slowdown in orders. Amid these turbulent times, he expressed that the need of the hour is to expand to international markets.
Out of the total consolidated revenues, nearly 27 per cent comes from the international business and the company currently has 19 international offices. Talking about the company's international exposure and strategy going forward, Unnikrishnan said, “Our products are recognized in the international markets and going forward we are planning to increase our exposure overseas. With this aim in mind, we are opening five new offices in Africa.”
The company has strong presence in 75 countries including Middle- East, China, South East Asia, Europe, USA and South America. The company is also planning to increase their work area in the South East Asia region. Adding to this, he said, “Till now we were only supplying to Southeast Asia equipment from India but now we are taking it a step ahead. We will now be supplying the equipment, help in erection of plants and later commission these plants.”
On standalone basis, Thermax Industries is a debt free company. The only debt the company has is for their joint venture with Babcock & Wilcox Power Generation group. Thermax owns 51 per cent stake in this Rs 850 crore project which is now near its completion and is expected to be commissioned by Q3 FY14. Talking about future acquisitions, Unnikrishnan added, “We have a cash surplus of Rs 600 crore which will be used whenever we get the right opportunity. As of now though we do not have any plans.”
Thermax recently announced its Q1 FY14 results and reported 25 per cent decline in net profit to Rs 50.25 crore. Company's total income also registered a fall of 12.3 per cent to Rs 862.82 crore. Commenting on the Q1 results, he said, “The results were impacted due to the slowdown in orders and foreign exchange losses. But there are few good points in the Q1 results. Our order intake has increased and we have also substantially reduced our treasury expenses. Also our operating profit has not taken a punch.”