Can Thermax Make Investors Happy Again?

The company's stock is down over 40% from its 52-week high. A turnaround plan is in the works

- Nehal Chaliawala

Arnavaz Anu Aga, the octogenarian matriarch of Thermax Ltd's promoter family, never planned to run the engineering company her father, A. S. Bhathena, started in 1966. Bhathena had found a worthy successor in his son-in-law Rohinton Aga, who took over as the chairman and managing director of Thermax in 1981 and led it to its public market debut in 1995. But Rohinton's sudden demise in 1996 forced Anu to hold the reins of the enterprise.

With no experience in heading a large corporation, nor deep understanding of engineering, Anu Aga's earnest efforts to steady the ship yielded little result in the face of the macroeconomic headwinds of the 1997 Asian financial crisis. The shares of the newly listed company more than halved in value between 1996 and 1998.

That's when an anonymous shareholder letter arrived, which has since become a part of the Indian corporate folklore. The shareholder allegedly told Aga that she had let the shareholders down.

"Letting down, for us, is a dirty word. I couldn't sleep," Aga told Mint during a meeting last December, at Thermax's head office in Pune.

She hired the Boston Consulting Group to script a turnaround. What followed is a well-documented reinvention story that is still referenced in business conferences and taught in management schools.

Cut to 2025. It's time to make sulking shareholders happy again.

During the post-covid bull-run, as investors chased themes around sustainability, the conglomerate's stock grew over five-fold between 2021 and 2024. It hit a 52-week high of ₹5,835 in July 2024. However, the stock has fallen over 40% since, and closed at ₹3,416 on 28 April as growth slowed down to a crawling pace while losses mounted in its new ventures. Brokerages across the board have trimmed price targets. In this period, Thermax's shares have also underperformed market index Nifty 500.