Thermax Emerges as a Leader in Energy Transition

Key Takeaways

Thermax is focusing on energy transition and efficiency to adapt to current market needs.
The company has reorganized into four sectors for better execution and management, improving its operational efficiency.
International orders now constitute 30% of Thermax’s total orders, driven by sectors like data centers, oil and gas, and biomass solutions.

Transforming Thermax’s Future

In a recent interview, Ashish Bhandari, MD & CEO of Thermax, outlined the company’s transformative journey amidst challenges in the clean-tech and energy sectors. Following a period of stagnant growth exacerbated by the COVID-19 pandemic, Thermax redefined its mission to be a dependable partner in energy transition. This change emphasized a commitment to energy efficiency and sustainable growth.

Thermax’s journey has not been without setbacks. Bhandari acknowledged difficulties in managing government projects, especially those requiring extensive civil and construction work. The company has since pivoted away from long-cycle projects with complex requirements to enhance operational agility. Factors contributing to these changes include labor shortages and increasingly unpredictable weather, which have complicated project execution.

The company also faced challenges in the bio-CNG sector due to issues with promised feedstock availability and subsequent output inconsistencies, which resulted in financial losses. As a corrective measure, Thermax has halted new bio-CNG orders for the past three years but is revisiting this segment with a more reliable approach.

To streamline operations, Thermax reorganized into four distinct divisions: industrial products, project-related infrastructure, green solutions, and chemicals. This structural change aims to enhance performance across various business lines. Since implementing this strategy, the company reports year-on-year growth in both revenue and profitability, culminating in a backlog of Rs 14,000 crore—the highest in the company’s recent history.

International operations are now a significant focus, comprising about 30% of total orders. Thermax is expanding its presence in various global markets, targeting sectors such as data centers in the U.S., oil and gas in the Middle East, and downstream customers in Africa. The company is working to establish local entities to handle project execution more efficiently.

Bhandari expressed optimism about future growth, citing improved product quality and the expansion of competitive offerings in international markets. The water treatment sector, once modest for Thermax, is now its fastest-growing business internationally.

Despite these advancements, challenges remain in project execution, product capabilities, and innovation. Addressing these hurdles while maintaining high-quality standards will be crucial for Thermax as it navigates its path forward in the evolving global landscape.

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