Mumbai: Capital goods maker Thermax on Friday posted a forecast beating rise in April-June net profit, sending its shares up more than 6% -- its highest intra-day gain in more than two weeks.
The Pune-based firm had a 28% rise in consolidated net profit to Rs856 million in the quarter, on total income growth of 49% to Rs1,240 crore, it said.
On a standalone basis as well Thermax beat street expectations of a 21% rise in net profit to Rs799 million. A Reuters poll of 17 brokerages estimated standalone net profit at Rs702.73 million.
Its consolidated current order book was down year-on-year by about 3% to Rs6,804 crore, it said. However, the order book rose quarter-on-quarter by 5.6%.
The firm sees ‘negative sentiment’ in the market caused by interest rate hikes, land acquisition challenges, material cost inflation and problems with fuel availability.
“In this tough environment the company is putting in all efforts to ensure growth while still managing the margins,” it said in a statement.
The margins for the firm would not improve in FY12 but it would try to retain them, managing director M. S. Unnikrishnan had told Reuters in a May interview.
Thermax expects order book to grow but would not “gallop upwards,” as FY12 is not an “easy-going” year for the company and for the sector, he had said.
The Indian economy grew 7.8% in the March quarter from a year ago, its slowest annual pace in five quarters, as higher interest rates crimped consumption and investment.
The Reserve Bank of India has raised rates 10 times so far since March 2010 to combat inflation and is widely expected to raise rates by 25 basis points again on 26 July.
At 2:29 pm, shares in the firm, which is currently valued by the market at $1.6 billion, pared early gains and were up 3.7% at Rs604.45, in a firm Mumbai market.