Thermax's second-quarter earnings were ahead of street estimates but profit after tax was hit by Rs 70 crore write-down of deferred assets. Managing director MS Unnikrishnan said Q2 results were positive as far as inputs in the company are concerned as Thermax's order intake for the quarter is 28 percent more than last year same quarter. “If I were to compare that with revenue recognition for the quarter, there is still an improvement into the order book at the end of September," he said.

Talking about weak IIP, Unnikrishnan said, “There is one single order which we have received of flue gas desulfurization system from one of the power plant of Rs 475 crore. This has helped me to ensure that there is an improvement but like the way capital goods IIP indicating in terms of minus 20 percent in the last month, I don’t think it is going to be a generic thing for Indian capital goods industry; it’s a temporary number.”

“However, going forward, further fresh orders to be taken in. There will be challenges but it is not such a bad story that people are projecting it to be; the sentiments are bad so the order conclusions may get delayed but otherwise things will start picking up a little later,” Unnikrishnan added.

On guidance front, he said, “I would not want to change the guidance because the larger orders which we received in the current quarter, the revenues will be recognized next year. So it’s giving me comfort for the forthcoming year than an improvement in the guidance to be given for the second half of the current year.”

Speaking about payments, the MD said, “There is a challenge in collecting payments. One has to overwork, but we have been very particular about that.”

“We do not overspend on a project unless cash flow is also matching with the efforts put in by us, but the retention money which is there with the PSUs by the way they put the tender, for example, any PSU tender will have a minimum 10 percentage of retention. So any equipment that is supplied in a 2 year project, 10 percent will remain retained by them by full 2 year period of time whereas I will be paying to my SME suppliers within 45 days. So those retentions are the ones which normally impacts the cash flow of companies,” he further added.

“Thermax being a zero debt organization, as of now also we have not borrowed any money to run the operations for working capital. We are managing with our own treasury,” Unnikrishnan added.