2QFY2012 Result Update | Capital Goods

October 21, 2011

Thermax
Performance Highlights
(` cr) Revenue EBITDA EBITDA margin (%) PAT
Source: Company, Angel Research

NEUTRAL
CMP Target Price
% chg (yoy) 19.4 9.3 (100)bp 13.6 1QFY12 1,044 113.7 10.9 79.9 % chg (qoq) 24.8 23.6 (11)bp 27.3

`425 -

2QFY12 1,303 140.5 10.8 101.7

2QFY11 1,092 128.6 11.8 89.5

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Capital Goods 5,062 0.6 927/ 407 122,447 2 16,786 5,050 THMX.BO TMX@IN

Thermax announced its 2QFY2012 results, which were ahead of our and street expectations. The company positively surprised on the top-line front, growing by 19.4% yoy `1,303cr, which was higher than our estimate of `1,168cr. Led by strong top line, EBITDA and PAT also reported decent growth of 9.3% and 13.6%, respectively. Future of the company is directly linked to the recovery of industrial capex which is showing no visible signs of improvement leading to stiff headwinds on the business front. Hence, we maintain Neutral on the stock. Strong execution drives revenue and profit: For 2QFY2012, Thermax reported revenue growth of 19.4% yoy to `1,303cr (`1,092cr), driven by strong execution. EBITDA margin witnessed a contraction of 100bp yoy to 10.8%, which was in-line with our estimate of 11.1%. The margin decline can mainly be attributed to higher raw-material prices, which rose by ~190bp yoy to 70% as a proportion to sales, and higher execution of low-margin EPC projects. However, strong revenue growth resulted in decent PAT growth of 13.6% yoy to `101.7cr (`89.5cr), against our estimates and street estimates of flat growth.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 62.0 14.2 10.7 13.1

Outlook and valuation: At the CMP, the stock trades at very attractive valuations of 12.6x and 11.7x FY2012E and FY2013E earnings, respectively (well below its historic average of 19.0x one-year forward earnings). The stock has corrected sharply by ~28% in the last three months, factoring in the negatives surmounting the sector. A weakened business environment would lead to lower order inflows, poor earnings growth and a stretched working capital cycle going ahead reversal of the companys key strengths. Hence, we reduce our target P/E multiple from 16.0x to 12.0x to factor in the same, thus arriving at a fair price of `437. We maintain our Neutral view on the stock.
Key financials (Consolidated)
Y/E March (` cr) Net Sales % chg Net Profit % chg EBITDA (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

Abs. (%) Sensex Thermax

3m

1yr

3yr 57.1 42.4

(9.0) (17.2) (27.6) (45.7)

FY2010 3,368 (2.7) 259 (9.9) 11.7 21.8 19.5 4.7 25.0 33.0 1.2 10.2

FY2011 5,336 58.5 382 47.3 10.8 32.0 13.3 3.8 31.9 39.2 0.8 7.4

FY2012E 5,816 9.0 403 5.6 10.8 33.8 12.6 3.1 27.5 32.6 0.8 7.1

FY2013E 6,172 6.1 434 7.5 11.0 36.4 11.7 2.6 24.2 30.4 0.7 6.2

Shailesh Kanani
+91 22 3937 7600 Ext: 6829 shailesh.kanani@angelbroking.com

Hemang Thaker
+91 22 3937 7600 Ext: 6817 hemang.thaker@angelbroking.com

Please refer to important disclosures at the end of this report

Thermax | 2QFY2012 Result Update

Exhibit 1: Quarterly performance (Standalone)

(` cr) Net Sales Other operating income Total income Stock adjustments Raw Material (% of total income) Employee Cost (% of total income) Other Expenses (% of total income) Total Expenditure EBITDA (EBITDA %) Interest Depreciation Other Income PBT (% of total income) Total Tax (% of PBT) Reported PAT (PAT %) EPS (`)
Source: Company, Angel Research

2QFY12 1,287 16.8 1,303 (0.6) 913.7 70.0 98.5 0.8 151.4 1.2 1,163 140.5 10.8 1.1 11.7 20.8 148.5 11.4 47 31.5 101.7 7.8 8.5

2QFY11 1,048 43.8 1,092 (3.2) 746.4 68.1 99.0 0.9 120.8 1.1 963.0 128.6 11.1 0.5 10.5 13.3 130.9 12.0 41 31.6 89.5 8.2 7.5

% chg (yoy) 22.8 19.4 22.4 (0.4) 25.3 20.8 9.3 142.8 11.6 56.0 13.4 12.9 13.6 13.6

1QFY12 1,033 11.5 1,044 (6.5) 734.7 69.7 90.5 0.9 112.1 1.1 930.7 113.7 10.9 0.4 11.1 14.7 117.0 11.2 37.1 31.7 79.9 7.6 6.7

% chg (qoq) 24.6 24.8 24.4 8.9 35.0 25.0 23.6 192.7 5.7 41.1 26.9 26.1 27.3 27.3

1HFY12 2,320 28.3 2,348 (7.1) 1,648 69.9 189.0 11.0 263.5 16.0 2,094 254.2 10.8 1.5 22.8 35.5 265.4 11.3 83.9 31.6 181.6 7.7 15.2

1HFY11 1,827 54.8 1,881 (5.8) 1,274 67.4 197.9 14.1 214.4 16.8 1,657 224.5 11.9 1.0 21.1 27.3 229.8 12.2 74.1 32.2 155.7 8.3 13.1

% chg (yoy) 27.0 24.8

(4.5) 22.9 26.4 13.2 46.1 8.2 30.1 15.5 13.2 16.6 -

Exhibit 2: Actual vs. estimates

Actual Revenue EBITDA PAT EPS (`)
Source: Company, Angel Research

Estimates 1,168 129.7 89.5 7.5

Var. (%) 11.6 8.4 13.6 13.6

1,303 140.5 101.7 8.5

October 21, 2011

Thermax | 2QFY2012 Result Update

Exhibit 3: Segmental performance

Y/E March (` cr) Revenue Energy Environment Total Revenue EBIT Energy Environment Total EBIT Revenues mix (%) Energy Environment EBIT Margin (%) Energy Environment Total
Source: Company, Angel Research

2QFY12 1,035 296.8 1,332 110.2 32.0 142 77.7 22.3 10.7 10.8 10.7

2QFY11 891.0 248.2 1,139 91.3 30.8 122 78.2 21.8 10.2 12.4 10.7

% chg (yoy) 16.1 19.6 16.9 (17.2) (3.5) (14.1)

1QFY12 802 265 1,067 81.0 31.3 112.3 75.2 24.8 10.1 11.8 10.5

% chg (qoq) 29.0 12.1 24.8 36.2 2.2 26.7

1HFY12 1,837 561.6 2,399 191.2 63.3 254 76.6 23.4 10.4 11.3 10.6

1HFY11 1,498 470.3 1,968 159.3 57.7 217 76.1 23.9 10.6 12.3 11.0

% chg (yoy) 22.7 19.4 21.9 20.0 9.6 17.2 77.7 22.3 10.7 10.8 10.7

Balanced segmental performance: Revenue growth during the quarter was driven by strong execution of orders in the energy and environment segments, which posted 16.1% yoy growth to `1,035cr (`891.0cr) and 19.1% yoy growth to `296.8cr (`248.2cr), respectively. Overall profitability remained fairly stable on a yoy basis; however, the energy segment showed a slight improvement of 50bp yoy to 10.7%. In contrast, the environment segment showed a contraction of 160bp yoy to 10.8%, which can mainly be attributed to increased commodity prices.

Exhibit 4: Trend in Revenues

1,200 1,000 800 600 400 200 0 4.4 (4.7) 2.8 (5.9) (15.8) (24.1) 28.6 45.2 61.365.9 45.3 32.2 19.4 75.0 60.0 45.0 30.0 15.0 0.0 (15.0) (30.0)

Exhibit 5: Trend in EBITDA

250 200 150 100 50 0 39.2 62.3 29.3 14.4 25.3 (16.8) (24.4) (39.4) (80.1) 63.8 18.5 9.3 515.4 600.0 500.0 400.0 300.0 200.0 100.0 (100.0) (200.0)

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

Sales (` cr, LHS)

Growth (yoy %, RHS)

EBITDA (` cr, LHS)

EBITDAM (%, RHS)

Source: Company, Angel Research

Source: Company, Angel Research

October 21, 2011

2QFY12

Thermax | 2QFY2012 Result Update

Key highlights of the conference call

Domestic markets are captured by negative sentiments due to interest rate hikes, land acquisition challenges and deepening fuel crisis. This has considerably affected order finalization across various sectors. Order booking for the next two quarters is likely to remain muted. During the quarter, significant pricing pressures prevailed in the market, especially for large orders; however, management will maintain its strategy of remaining selective in picking orders. Management indicated that revenue growth as per the previous quarters will be tough to deliver, but it remained confident to achieve double-digit EBITDA margin for the whole year in spite of several headwinds. Management remained optimistic about the BTG venture, which will come on stream by September 2012, and remained confident of being able to win utility boiler orders over the next 12-18 months. The company has tied up with Tecnochem and Dalton (European companies) for construction chemicals used in multi-storey buildings. These will be imported and sold by the company from 4QFY2012, followed by setting up of a manufacturing unit by 2QFY2013.

October 21, 2011

Thermax | 2QFY2012 Result Update

Healthy order intake, but downward bias on future inflows: For 2QFY2012, despite a tough business environment, Thermax was able to secure orders of `1,284cr (energy segment `934cr and environment segment `351cr) albeit posting a yoy de-growth of 8.8%. Order intake was mainly constituted by oil and gas (30%), metals, (12%), cement (6%), power (8%), textile (7%) and food processing (4%). Consolidated order backlog at the end of the quarter stood at `6,531cr (energy segment `5,370cr and environment segment `1,061cr). Management commentary indicated a weakening outlook and a much tougher business environment, which imply slackening order intake for the rest of the year.

Exhibit 6: Order book detail (Consolidated)

8,000 6,400 4,800 5613 5,966 6,984 7,276 7154 5,059 3,426
2,345 1,057 1,548 1,464 1,840 1,408 1,528 1,688

6,446

6,804 6,531

(`)
3,200 1,600 -

1,234

1,284

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

Order Backlog

Order inflows

Source: Company, Angel Research

Change in estimates: We lower our FY2012E revenue growth estimates by 2.6% in light of tough business environment (continued deferrals in order finalizations and stiff competition). Also, the fact that 2HFY2011 witnessed robust growth last year, thereby creating a large base, we expect Thermax to post subdued numbers. We also lower our FY2013E growth estimates on the back of lower estimated order inflows for FY2012E and no signs of revival in industrial capex. We retain our margin assumptions for FY2012E and FY2013E.

Exhibit 7: Change is estimates

FY2012E (` cr) Earlier estimates 5,971 644 417 Revised estimates 5,816 627 403 Var. (%) (2.6) (2.7) (3.3) FY2013E Earlier estimates 6,830 751 488 Revised estimates 6,172 679 434 Var. (%) (9.6) (9.6) (11.1)

Revenue EBITDA PAT

Source: Company, Angel Research

October 21, 2011

2QFY12

Thermax | 2QFY2012 Result Update

Investment concerns
Weak outlook on industrial capex casts concerns: It is pertinent to note that ever since the business environment turned hostile from 2HFY2011, the cumulative order intake for FY2011 by Thermax posted a decline of 10.2% yoy. Consequently, OB/Sales dropped from 2.0x in FY2010 to 1.3x in FY2011, thereby rendering lowered revenue visibility for the coming years. Also, with no respite on the interest rates front in the near term, overall capex across sectors (such as metals, cement, and oil and gas) will decelerate further as increased borrowing costs will make incremental capex unviable. In addition, the general slowdown in the economy does not help the situation either. Against this backdrop, order finalizations from these sectors will be on a strict check. This negatively affects companies with exposure to industrial capex (read Thermax) for their growth. Lack of clarity on JVs earnings potential: The JV with B&W (set up at an estimated cost of `800cr) for manufacturing supercritical boilers has not bagged any order till date. Thermax was also unsuccessful in securing orders from the much-awaited NTPC bulk order of supercritical boilers (9x800MW). Further, the BTG market is lined up for intense competition and predatory pricing, as equipment is likely to be sedate in the near-to-medium term. Given this, equity investment of ~`400cr (~20% of the balance sheet) can be at risk. Concerns in the power sector loom large: With the coal sector struggling to meet the demands of the power sector, the perceived shortage in coal supply casts a grim outlook on the power sector. While the UMPPs and higher rating power plants are likely to receive priority in supplies over the smaller ones, IPPs and CPPs below the 300MW category will face pain. Thermax has a strong presence in utility boilers (up to 300MW category) and may face a slowdown in order inflows in such a scenario. The governments prompt action to resolve this crisis will prove as an important trigger; however, delays in the process including various approvals and other procedural formalities will remain a major challenge.

Outlook and valuation: Thermax trails its fortune towards industrial capex,
especially in sectors such as metals, cement and oil and gas, which form its mainstream arena for offering products and solutions. However, the continual tough macro climate calls for more pain to the company. At the CMP, the stock trades at attractive valuations of 12.6x and 11.7x FY2012E and FY2013E earnings, respectively (well below its historic average of 19.0x one-year forward earnings). The stock has corrected sharply by ~28% in the last three months, factoring in the negatives surmounting the sector. A weakened business climate depicts lower order inflows, poor earnings growth and a stretched working capital cycle reversal of the companys key strengths. Hence, we reduce our P/E multiple of from 16.0x to 12.0x to factor in the same, thus arriving at a fair price of `437. We maintain our Neutral view on the stock.

October 21, 2011

Thermax | 2QFY2012 Result Update

Exhibit 8: Trend in PAT

150 125 100 75 50 25 0 36.4 10.5 (16.6) (27.0) (31.8) (42.7) 49.8 42.3 65.4 77.4 27.5 113.7 125.0 100.0 75.0 13.6 50.0 25.0 (25.0) (50.0) (75.0)

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

Adj. PAT (` cr, LHS)

Source: Company, Angel Research

PATM (%, RHS)

Exhibit 9: Angel EPS forecast

Angel forecast FY2012E FY2013E
Source: Company, Angel Research

Bloomberg consensus 35.5 38.9

2QFY12

Var. (%) (4.6) (6.4)

33.8 36.4

Exhibit 10: One-year forward P/E band

980 840 700 560 420 280 140 0

(`)

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11
20x

Oct-05

Oct-06

Oct-07

Oct-08

Oct-09

Oct-10

Feb-06

Feb-07

Feb-08

Feb-09

Feb-10

Share Price (`)

5x

10x

15x

Source: Company, Angel Research

October 21, 2011

Feb-11

Oct-11

Thermax | 2QFY2012 Result Update

Exhibit 11: Peer comparison

Company Reco. CMP Tgt. price Upside (`) ABB* Areva T&D* BHEL BGR Energy Crompton Greaves Jyoti Structures KEC International Thermax Sell Neutral Neutral Neutral Accum. Buy Buy Neutral 695 213 320 318 138 62 57 425 (`) 578 153 90 88 P/BV(x) P/E(x) FY2011-13E RoCE (%) RoE (%)

(%) FY12E FY13E FY12E FY13E (16.8) 11.3 44.7 53.1 5.5 4.5 3.1 1.9 2.4 0.7 1.3 3.1 4.8 3.7 2.5 1.7 2.1 0.6 1.0 2.6 47.3 26.5 11.4 7.0 16.4 4.6 5.9 12.6 32.5 18.8 10.0 7.6 10.8 4.1 4.5 11.7

EPS CAGR FY12E FY13E FY12E FY13E 166.8 20.6 13.7 (3.6) (5.9) 24.8 23.1 6.6 15.0 24.0 41.2 19.7 16.6 23.7 22.0 32.6 20.6 26.9 37.6 16.1 21.6 22.9 24.1 30.4 12.2 17.9 30.3 30.6 15.6 16.6 24.8 27.5 15.7 21.6 27.7 23.4 20.7 15.0 25.6 24.2

Source: Company, Angel Research; Note:*December year ending.

October 21, 2011

Thermax | 2QFY2012 Result Update

Profit & loss statement (consolidated)

Y/E March (` cr) Net Sales Other Opr. income Total Income % chg Total Expenditure Net Raw Materials Other Mfg costs Personnel Other EBITDA % chg (% of Net Sales) Depn & Amort. EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Others Recurring PBT % chg Extraord. Exp/(Inc.) PBT (reported) Tax (% of PBT) PAT (reported) Add: earnings of associate Less: Minority interest (MI) Prior period items PAT after MI (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg FY2008 FY2009 FY2010 FY2011 3,482 3,482 49.6 3,055 2,220 567 267 427 47.7 12.3 23.2 403 49.8 11.6 2 44 9.8 446 46.7 (2.1) 448 157.1 35.1 291 291 289 44.9 8.3 24.2 24.2 44.9 3,460 3,460 (0.6) 3,038 2,080 670 288 422 (1.1) 12.2 35.1 387 (4.2) 11.2 4 40 9.5 423 (5.0) (1.4) 425 135.7 32.0 289 289 288 (0.4) 8.3 24.1 24.1 (0.4) 3,368 3,368 (2.7) 2,973 2,027 616 330 395 (6.4) 11.7 44.2 351 (9.4) 10.4 2 52 13.0 400 (5.4) 114.9 286 141.6 49.6 144 (0.4) 144 259 (9.9) 7.7 21.8 21.8 (9.9) 5,336 5,336 58.5 4,763 3,625 678 460 574 45.4 10.8 54.1 520 48.3 9.7 4 58 10.1 574 43.3 574 196.7 34.3 377 377 382 47.3 7.2 32.0 32.0 47.3 FY2012E FY2013E 5,816 5,816 9.0 5,189 3,956 733 500 627 9.2 10.8 74.3 553 6.3 9.5 4 48 8.0 597 4.1 597 194 32.5 403 403 403 5.7 6.9 33.8 33.8 5.7 6,172 6,172 6.1 5,493 4,178 778 537 679 8.3 11.0 87.3 592 7.1 9.6 2 53 8.3 642 7.5 642 208 32.5 434 434 434 7.5 7.0 36.4 36.4 7.5

October 21, 2011

Thermax | 2QFY2012 Result Update

Balance Sheet (consolidated)

Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Preference Capital Reserves& Surplus Shareholders Funds Minority Interest Total Loans Deferred Tax Liability Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Mis. Exp. not written off Total Assets 433 145 288 61 560 1,119 58 219 32 1,259 (140) 4 773 661 170 491 18 143 1,732 370 222 41 1,372 359 1,011 742 205 537 11 370 2,431 670 328 59 2,239 191 1,110 1,068 282 785 35 241 2,997 750 360 73 2,514 482 1,545 1,328 333 995 25 241 3,062 542 378 93 2,473 589 1,850 1,488 421 1,068 15 241 3,218 694 401 99 2,506 712 2,036 24 736 760 13 773 24 968 991 4 16 1,011 24 1,054 1,078 9 8 14 1,110 24 1,291 1,315 52 148 30 1,545 24 1,597 1,621 52 148 30 1,850 24 1,933 1,957 52 (2) 30 2,036 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

October 21, 2011

10

Thermax | 2QFY2012 Result Update

Cash flow statement (consolidated)

Y/E March (` cr) Profit before tax Depreciation (Inc)/Dec in WC Less: Other income Direct taxes paid Cash Flow from Operations (Inc.)/Dec.in Fixed Assets (Inc.)/Dec. in Investments Other income Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E 448 23 (54) 44 148 225 (190) 14 44 (132) (2) 112 (19) (114) (39) 97 58 425 35 (187) 40 133 99 (186) 417 40 272 (0) 4 70 7 (66) 312 58 370 286 44 469 52 142 604 (74) (227) 52 (249) 4 69 11 (66) 300 370 670 574 54 (212) 58 195 163 (350) 129 58 (163) 140 125 42 15 57 670 750 597 74 (314) 48 194 115 (250) 48 (202) 98 (23) (98) (208) 750 542 642 87 29 53 208 496 (150) 53 (97) (150) 98 0 (248) 152 542 694

October 21, 2011

11

Thermax | 2QFY2012 Result Update

Key Ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV/Total Assets OB/Sales Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value DuPont Analysis EBIT margin (%) Tax retention ratio Asset turnover (x) ROIC (Post-tax) (%) Cost of Debt (Post Tax) (%) Leverage (x) Operating RoE (%) Returns (%) RoCE (Pre-tax) Angel RoIC (Pre-tax) RoE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Int. coverage (EBIT / Int.) (0.7) (1.3) 244.5 (0.5) (1.2) 101.5 (0.9) (2.6) 172.7 (0.6) (1.4) 126.8 (0.4) (1.0) 150.1 (0.5) (1.4) 220.2 9.6 22 49 40 (21) 6.3 26 58 46 (1) 4.8 29 74 64 (52) 5.9 21 64 56 (18) 4.9 24 67 56 3 4.4 21 64 56 1 58.8 60.6 42.9 43.3 127.6 32.9 33.0 118.1 25.0 39.2 123.0 31.9 32.6 172.9 27.5 30.4 69.5 24.2 11.6 0.6 5.1 38.2 98.7 38.2 11.2 0.7 3.9 29.5 127.1 29.5 10.4 0.5 3.2 16.7 17.0 16.7 9.7 0.7 4.0 25.7 3.5 25.7 9.5 0.7 3.4 22.0 1.7 22.0 9.6 0.7 3.2 20.6 2.5 20.6 24.2 24.2 26.2 8.0 63.4 24.1 24.1 27.1 5.0 83.2 21.8 21.8 25.5 5.0 90.5 32.0 32.0 36.6 9.0 110.4 33.8 33.8 40.1 7.0 136.0 36.4 36.4 43.7 7.0 164.2 17.5 16.2 6.7 1.9 1.3 10.6 5.8 0.8 17.6 15.7 5.1 1.2 1.3 10.8 4.5 0.9 19.5 16.7 4.7 1.2 1.2 10.2 3.6 1.8 13.3 11.6 3.8 2.1 0.8 7.4 2.7 1.2 12.6 10.6 3.1 1.6 0.8 7.1 2.4 1.0 11.7 9.7 2.6 1.6 0.7 6.1 2.0 1.1 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

October 21, 2011

12

Thermax | 2QFY2012 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Thermax No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

October 21, 2011

13