Thermax has been assigned a CARE A1+ credit rating for its commercial papers by CareEdge Ratings Limited, a registered credit rating agency. The company received the rating communication on January 12, 2026, and informed stock exchanges about this development under regulatory compliance requirements.

Strong Market Position and Operational Excellence

The rating assignment reflects Thermax's established market position in the energy and environment solutions sector. CareEdge Ratings highlighted the company's strong execution capabilities and diversified product portfolio as key rating strengths. The rating agency emphasized Thermax's ability to maintain its competitive edge across various business segments.

Impressive Financial Performance

Thermax has demonstrated robust operational performance over recent years, with growth witnessed across all operating divisions. The company's financial metrics showcase strong momentum:

The sustained increase in operating profit margins from 6.42% in FY22 to 9.25% in FY25 demonstrates the company's improving operational efficiency. This margin expansion was supported by enhanced profitability in the industrial product segment and chemicals segment, which helped offset subdued margins in the industrial infrastructure division and the nascent green solutions segment.

Strong Financial Risk Profile

CareEdge Ratings emphasized Thermax's strong financial risk profile as a crucial rating factor. The company maintains:

• Low leverage levels
• Comfortable debt coverage indicators
• Strong liquidity position
• Comfortable capital structure

These financial strengths provide the company with operational flexibility and support its ability to meet short-term obligations, which is particularly relevant for commercial paper ratings.

Order Book and Execution Capabilities

The rating rationale highlighted Thermax's healthy execution capabilities across both domestic and international markets. The company has experienced steady growth in order inflow, which has supported a sustained increase in its outstanding order book over the years. This consistent order book growth provides revenue visibility and supports the company's operational planning.

Rating Significance

The CARE A1+ rating for commercial papers indicates a very strong degree of safety regarding timely payment of financial obligations. This rating reflects CareEdge Ratings' assessment of Thermax's creditworthiness and its ability to honor short-term debt commitments. The rating considers the company's operational performance, financial strength, and market position in the energy and environment solutions sector.

Thermax has unveiled ambitious expansion plans in the clean energy sector, announcing a strategic investment of over ₹100 crores in its hydrogen business segment alongside plans to scale up First Energy Private Limited (FEPL) to 1GW capacity with a suitable partner.

Hydrogen Business Investment

The company's substantial financial commitment of over ₹100 crores over the next few years underscores its dedication to expanding its footprint in the rapidly growing clean energy sector. This investment represents a major step forward as Thermax seeks to capitalize on emerging opportunities in the hydrogen economy.

FEPL Expansion Strategy

Thermax has announced plans to expand its First Energy Private Limited (FEPL) operations to achieve 1GW capacity. The company intends to bring a suitable partner on board to support this significant expansion initiative, demonstrating its commitment to scaling up renewable energy capabilities.

Strategic Market Positioning

These dual initiatives position Thermax to leverage the growing momentum in India's clean energy sector. The company's multi-pronged approach, combining hydrogen technology investments with renewable energy capacity expansion, demonstrates its confidence in the long-term potential of sustainable energy solutions and their role in the country's energy transition.

Business Portfolio Diversification

The planned investments align with Thermax's broader strategy to diversify its business portfolio and strengthen its position in sustainable energy solutions. By focusing on both hydrogen business development and renewable energy capacity expansion through FEPL, the company aims to establish itself as a comprehensive clean energy solutions provider while contributing to India's environmental objectives.