Energy and environment engineering company Thermax Limited has decided to set up new manufacturing facilities in India. There is also a plan to set up a manufacturing unit in Indonesia. The company is planning to invest Rs 460 crore in the next two years and the expansion plan is part of a strategy to de-risk the business and help the company reduce its dependency on the cyclical nature of the capital goods' industry and heavy reliance on one country. The company's numbers had been under pressure as investments in the domestic market were impacted.

"The cyclical nature of the capital goods' industry and heavy reliance on one country are major risks that we have been trying to mitigate over the years. The move has the dual advantage of increasing the share of products with less volatile demand profile, and at the same time, will enhance our international business revenue," said Meher Pudumjee, Chairperson, Thermax. According to Pudumjee, the plant at Dahej will produce ion-exchange resins, which is part of its chemical business with an investment of Rs 150 crore. The resins have been developed internally and will be used in newer applications like food and medicine.

The second plant will come up on the east coast of India and will focus on the cooling business. This will help Thermax to expand its cooling business as the absorption chiller facility in Pune is running at its full capacity. This will be an export-oriented unit. At present, Thermax has four manufacturing plants - two each in Maharashtra and Gujarat - and an assembly plant in Gujarat. "The ASEAN market offers huge potential and will grow as big as the Indian market and we are gearing to be ready for it. We will be setting up an investment subsidiary in Singapore through which we will invest in a manufacturing plant in Indonesia, which will become the regional manufacturing hub for the ASEAN region," said M S Unnikrishnan, Managing Director and CEO, Thermax.

The company has acquired land in Indonesia for the plant and will cater to the markets of Indonesia, Malaysia, Thailand, Vietnam, Laos and Cambodia with a total investment of USD 25 million. This has been planned as multipurpose plant for water, heating and air pollution. Thermax's revenues from international business grew 17 per cent to Rs 1,624 crore in product portfolio and the revenues from services increased 11 per cent to Rs 756 crore. Up to 25 per cent of its revenues come from its international business.

Recently, Thermax announced the acquisition of 33 per cent stake in alternative energy solutions firm First Energy. The agreement envisages stage-wise acquisition (up to 76 per cent) of First Energy by Thermax over the next four to six years. This partnership offers Thermax synergy and new opportunities in the commercial space to serve customers with alternative and cost-saving solutions. First Energy has recorded revenues of Rs 42 crore in 2014-15.

Meanwhile, better margins on newer heating and cooling products and improved operational efficiency have helped Thermax post a 49 per cent growth year-on-year in its Q1 net profit. The standalone net profit during Q1 2016 stood at Rs 62 crore against Rs 41 crore in the same quarter of last year. The operating revenue stood at Rs 1,001 crore against Rs 839 crore in Q1 2015, translating into a growth of 19 per cent. Order booking during the quarter was Rs 877 crore which is 32 per cent higher than that in the same quarter last year.