Thermax was buoyed up today on the announcement that the company is considering a proposal to issue bonus redeemable preference shares or bonus debentures.

The scrip of the Pune-based engineering company climbed 3.52% to Rs 188 on BSE. A total of 8,885 Thermax shares were registered as volumes by 10:15 IST. The Thermax scrip has now risen 37% from Rs 137 on 30 April 2003.

A meeting of the board of directors of Thermax will be held on 29 May 2003 to consider a proposal to issue bonus preference shares or debentures. Along with the proposal of bonus, the company will also declare results and, perhaps, a dividend. The company's stock is upbeat also as hopes run high over impressive results.

A solid dividend is also expected to be forthcoming for FY 2002-03. The market expects a dividend in the range of 100-150% (i.e. Rs 10-15 per share having a face value of Rs 10) what with dividend being made tax-free in the hands of investors. Last year, the company announced a dividend of 50%.

For the fourth quarter ended 31 March 2003, analysts expect the company to record a relatively substantial net profit of Rs 30-33 crore (Rs 17.72 crore) on net sales of Rs 190-195 crore (Rs 178.01 crore). For the full year (FY 2002-03), the company is expected to turn out a net profit of Rs 45-50 crore on net sales of Rs 550-555 crore.

As on 31 March 2003, promoters held 61.98% stake in Thermax, while the public and institutions held 19.71% and 14.15%, respectively.

Thermax is an established company in the boiler and heater market with a base of over 20,000 installations across industry segments, especially textiles, chemicals, pharmaceuticals, food, edible oils, and paper. The company is now focusing on service and retrofit businesses to capitalise on this installed base.

To beat the sluggish conditions in the domestic market, Thermax is concentrating on the international markets. The company has projected 25% growth from its subsidiaries in the US and UK in fiscal 2002-03. It is also looking at newer international markets such as Russia, South East Asia, Thailand and Malaysia.

In the domestic market, the company plans to revamp the dealer network, cross-sell products and enter the services business to improve the top line. It has also initiated a comprehensive exercise in domestic and global sourcing for optimum purchase efficiency and improvement in supply chain management.

For the third quarter ended 31 December 2002, the company recorded a massive 96.5% rise in net profit to Rs 5.11 crore (Rs 2.60 crore) on a 14.74% increase in net sales to Rs 115.02 crore (Rs 100.24 crore).