Key Takeaways
- Thermax Ltd acquires an additional 35.83% stake in Exactspace Technologies, raising total ownership to 51%.
- The acquisition strengthens Thermax’s capabilities in AI-driven Industrial IoT solutions for manufacturing.
- Thermax’s net profit soared 80% year-on-year to ₹205 crore for Q3, despite a slight revenue miss.
Thermax Expands Stake in Exactspace Technologies
Thermax Ltd has announced a significant investment in Exactspace Technologies Private Ltd. The company has entered into a share subscription and purchase agreement that will allow it to acquire an additional 35.83% stake, boosting its total shareholding to 51% on a fully diluted basis. This move will make Exactspace a subsidiary of Thermax. Currently, Thermax holds a 15.17% stake in Exactspace, which is classified as an associate company. The agreements also grant Thermax an option to acquire the remaining 49% stake after three years, under specified conditions.
Exactspace specializes in developing Artificial Intelligence-based Industrial Internet of Things (IIoT) solutions, primarily for Thermax’s manufacturing clients. The acquisition aims to enhance Thermax’s service portfolio, which includes predictive asset maintenance, process optimization, asset efficiency improvement, and analytics-driven failure analysis.
The deal, valued at ₹30.48 crore in cash, does not require any governmental or regulatory approvals. The financial arrangements are subject to transaction adjustments, with the remaining stake targeted for acquisition in three years. Exactspace Technologies, incorporated in December 2017, reported annual turnovers of ₹6.21 crore, ₹5.51 crore, and ₹5.52 crore over the past three fiscal years.
In related financial updates, Thermax posted a remarkable net profit of ₹205 crore for the third quarter, surpassing the expected ₹153.4 crore and marking an 80% increase year-on-year. However, revenue increased by only 4.2% year-on-year to ₹2,634 crore, falling slightly short of the predicted ₹2,726 crore. EBITDA rose significantly by 34.5% to ₹254.3 crore, with the EBITDA margin improving from 7.5% to 9.7% compared to a year ago.
Exceptional items contributed to the enhanced profit, including a ₹59 crore boost from reversing a provision and interest income from a court order. Nonetheless, there was a one-time cost of ₹21 crore due to changes in labor codes. Thermax continues to show strong order momentum, with order bookings climbing 34% year-on-year to ₹3,080 crore. As of December 31, the order balance was ₹12,641 crore, reflecting an 11% increase from the previous year.
Despite the positive results, Thermax’s shares closed down 2.11% on the BSE, finishing at ₹3,110.00.
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