Thermax Gearing Up For Mega Capex To Boost Green Hydrogen Production

Thermax Ltd. is prepared for large-scale capex to set up a solid oxide electrolysers manufacturing unit in India, the company’s Chief Executive Officer Ashish Bhandari said.

Recently, the Indian multinational engineering conglomerate announced a partnership with UK-based Ceres Power Ltd. for green hydrogen production with large-scale solid oxide electrolysis cell manufacturing in India.

The two companies have entered into an agreement for Thermax to manufacture, sell and service stack array modules based on Ceres' advanced solid oxide electrolysis cell technology.

Thermax also plans to establish a manufacturing facility for the electrolysers, develop the supply chain, and localise critical components over the next two years.

“The investment (towards indigenisation of the project) will change depending on the success that we get at each stage but we are prepared for hundreds of crores of investments on setting up full-scale manufacturing capability for solid oxide electrolysers,” Bhandari told NDTV Profit.

The Thermax CEO said that hydrogen as a technology for the future will be important for India’s many hard-to-abate industries like steel, refining, petrochemicals, and fertilisers.

“I think solid-oxide technology for electrolysis is a key tech that can make this change happen faster,” he said.

The company is focusing more on green technology, which is reflected in the breakup of its Rs 10,500-crore order book, Bhandari noted.

“Right now, we are running about 70% of what we call as green (energy) and 30% of traditional fossil fuel,” the top executive said.

With the new opportunities towards green transition, Bhandari said that he expected the margins of the company to improve.

“I think Q1 in particular we had some exceptional hits. On our bio-CNG portfolio in particular and on our project side, we had items that resulted in one-time hits. Overall, I’m confident that our margin profile will continue on a trend of improvement,” he added.

Thermax share price on Thursday surged 1.8% with an intraday high of Rs 5,296.15 apiece on the BSE, up from its previous closing price of Rs 5,197.30 per share.

The stock was trading at Rs 5,274.20 apiece, up by 1.48% on the BSE around 2:20 PM.

Four out of the 23 analysts tracking the company have a "buy" rating on the stock, nine suggest "hold" and 10 recommend "sell", according to Bloomberg data.