India’s Thermax reported fourth-quarter profit below expectations on Friday, hurt by weak demand for its industrial machines and higher raw material costs.
Capital goods companies, which depend heavily on government orders, have seen a slowdown in such inflows in recent quarters. Analysts say government capex remained subdued across most segments in the reporting quarter as well.
Thermax’s order booking dropped 8% to 21.19 billion rupees and a spike in raw materials costs pushed up the company’s expenses by 11%.
The industrial machine maker’s consolidated net profit rose 8% to 2.06 billion rupees ($24 million)in the quarter ended March 31, from 1.9 billion rupees a year ago.
Analysts had expected a profit of 2.08 billion rupees, as per data compiled by LSEG.
Thermax’s revenue grew about 12% to 30.85 billion rupees for the March-quarter, below analysts’ expectation of 31.22 billion rupees.
Revenue from Thermax’s industrial products segment grew 18.5%, while that from division that sets up bio-CNG and power plants rose 4%.
The quarterly results were affected by 660 million rupees cost related to the company’s bio-CNG projects, it said in a statement.
Peer ABB India reported higher first-quarter profit on Friday on steady demand for its electrification products.
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