Mumbai, July 31 (IANS) Shares of Thermax Limited came under intense selling pressure on Friday after the company reported a steep decline in earnings for the June quarter, with investors reacting sharply to the weak profitability and a significant cost overrun in one of its projects.
The stock fell as much as 16.08 per cent during intra-day trade to Rs 3,566.90 on the Bombay Stock Exchange (BSE).
During noon trade, the shares were trading near the day's low at Rs 3,680, down 13.43 per cent.
The sharp fall in the stock followed the company's June-quarter results, which showed consolidated net profit plunging 83.4 per cent year-on-year to Rs 25.2 crore from Rs 152.4 crore in the corresponding period last financial year.
Despite the steep decline in profit, Thermax reported a 6.7 per cent increase in revenue from operations, which rose to Rs 2,303 crore during the quarter from Rs 2,158 crore a year earlier.
The company's operating performance also weakened significantly. Earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 69.5 per cent year-on-year to Rs 68.6 crore from Rs 225 crore in the year-ago quarter.
Consequently, the EBITDA margin narrowed sharply to 3 per cent from 10.4 per cent.
Thermax attributed the weak quarterly performance primarily to a Rs 91 crore increase in the estimated cost required to complete a specific project in its Industrial Infrastructure segment after certain developments were identified during the quarter.
The company also noted that the corresponding quarter of the previous financial year had benefited from Rs 56 crore of income received under the Package Scheme of Incentives for a subsidiary in the Industrial Infrastructure segment.
In addition, lower export sales weighed on the profitability of its Industrial Products business during the reporting period.
Separately, the company's board approved a Scheme of Arrangement and Amalgamation involving Thermax Bioenergy Solutions Private Limited, Thermax Cooling Solutions Limited and Thermax Limited.
--IANS
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