Thermax Limited
NSE:THERMAX
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Thermax Limited
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Good morning, ladies and gentlemen. Welcome to Thermax Q3 FY '18 Results Conference Call hosted by Motilal Oswal Securities. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Ankur Sharma from Motilal Oswal Securities. Thank you, and over to you, sir.
Yes, thanks, Lizan. Good morning, ladies and gentlemen, and welcome to the Q3 '18 Post Results Earnings Call of Thermax Limited. With us today from the management we have Mr. M. S. Unnikrishnan, Managing Director and CEO; and Mr. Amitabha Mukhopadhyay, Executive VP and CFO. As always, we shall begin with the opening remarks from Mr. Unnikrishnan and then open the floor to Q&A. Over to you, sir.
Thank you, Ankur. Let me also apologize to all those who are present over here for being delayed by a few minutes. It has never happened, but early on, some technical grounds it happened. Apologies on that thing, but I'll compensate it by extending the time by about 7 minutes to ensure that all of you get an opportunity.A warm welcome and good morning to all my friends from the analyst community and our well-wishers for actively supporting us all the while. And let me start on with the Q3 performance. The numbers from the last 2 quarters had been discussed only at the group level. Any details needed later, I'm sure Amitabha and his team will help you out also. Starting on with the order intake, it had been a good enough quarter. I won't say an excellent quarter, good enough quarter, where our group level order intake has improved by 20% from INR 1,183 crores last year to INR 1,413 crores. And the 9-month order intake is up 46%, above the last year's first 9 months, all the way up to 4,782 even exceeding the last full year's order intake. This has helped us to increase our order carryforward at the end of the third quarter by 27%, standing at 5,546 versus the last year's 4,375, at least, ensuring that we will have a good year next year apart from a possibility of a better fourth quarter.Revenues on the expected lines from our side has improved by [ 14% ] at the group level, moving all the way from 998 to 1,141. And at the 9-month level, 3 quarters, we are a shy lower than the previous year's number, less than 1% lower, 3,114 versus 3,155. So the current quarter, after maybe substantial number of quarters, we have been able to reverse the negative trend and declare a positive number. But certainly, there are some concerns related to the margins and profitability. I'm sure you’d have already read numbers. At the EBITDA level, at the group, we are at INR 102.1 million versus last year's INR 97.1 million, a growth of 5%. At the PBT level, it is INR 96 million versus INR 91 million. At the net level, we are 9.3% more than the previous year, but going up from INR 54 crore to INR 59 crore.There are 3 specific factors which I would like to bring to your attention for the Q3, where the numbers -- the profits have come down. Two of the subsidiaries of the company, the Danstoker Group and Thermax China, has reported negative numbers, of which, Danstoker is only a quarterly number. It will certainly go back to positive in the next quarter, and recovery is -- [ making ] year-end is going to be positive. However, the Chinese subsidiary continues to be under pressure, and we also had to make some provisions related to a litigation in the local market. That is why the Chinese subsidiary has reported a larger loss than what was expected also, which has impacted -- part of the reason for the impact on the profitability.Second is, even in the domestic business, there were some orders which got executed in 1 or 2 of our divisions which had a very low margin. And it was to ensure that the projects got completed on time instead of having again the renegotiation with the customers because the -- in some of the divisions, the steel price increased over the last 1 year where the projects got delayed in execution, had an impact. And we still are in discussions with customers to ensure that at least a part of that can be recovered going forward. Now looking at the order carryforward at this juncture, it is an indication that we should be able to improve the margins in the next quarter. Of course, there are so many ifs and buts when you run a project business, but our experience says that we should be able to improve it further next quarter. So that's about the overall results to give you an indication.An update on Babcock & Wilcox joint venture of ours, there are no business being transacted, barring some very small supplies continuing on the existing orders. And our joint venture with theSPX Corporation also, since SPX have sold off their business for ACC and dry cooling to Paharpur. Our agreement will be expiring any moment. And we will continue with the business of air-cooled condensers because we already absorbed the technology and have started designing it and there is capability existing in the company. That's an update on both of them.Update on Dahej factory is I'm very happy to say that it has gone online. And in the last quarter, we have been able to commercially produce, without any flaw, a good quality, a world quality resin from that plant. The rated capacity for the first year being 1,000 meter cube per month. We have reached up to 400, and the expectation is by June, we should be able to reach the [ capable ] capacity for the plant.Indonesian subsidiary, manufacturing started. Orders have started coming in, though, I'm not very happy about the order intake for the last quarter. But no order losses are reported, so we should be seeing a better order intake for Q4 and Q1 of next year for Indonesian subsidiary.Now update and our Sri City facility for absorption cooling. As promised to all of you, June quarter, we should be able to start manufacturing from there. Stability should happen there afterwards in the second quarter. And by H1, H2, we should have a regular production starting from the Sri City factory for absorption coolers. That's all overall about the organization, but a good quantum of order carryforward. Now the focus will also -shift on to ensure that we are able to execute the capability that we have built across maybe decades to come into effect for next year. So that's about overall talk from my side. I'll leave it to each one of you to be asking whatever queries and doubts that you have and any explanations on the results. Thank you.
[Operator Instructions] We'll take the first question from the line of Sujit Jain from HDFC Securities.
The 18% rise in energy revenues in this quarter Y-o-Y versus a 9-month fall of 2% in energy revenues, so this rise, 18%, came on what account? And is this sustainable?
Yes, it is sustainable. It is not in 1 business of ours. It is embedded into the heating, into the cooling and the boilers and heaters, and captive power, there is an EPC. All of them had a positive number. Carryforward orders, barring for the cooling business, is also on a positive side. So there is -- in the visible period, there is a sustainability for this number. Percentages can vary here and there but otherwise there's a visibility.
And you spoke about why the margins came lower this quarter, the EBITDA margins. But if I look at last quarter, also, the material costs were to the tune of 52%, 53% as much as they are in this current quarter. So what kind of new normal margins one can eventually expect moving from the 8.5% that we've bagged during this quarter?
Almost similar kind of situation prevailed last year when we spoke in the third quarter con call and told you that we will try to improve and go closer to double digit. The current target is almost similar to that. But there are many things to be seen as we're executing. One month is already over, very 2 crucial months of February and March, normally for us is very important as to how we are able to ensure that we are executing the profitable order on time. So that's where the numbers will go up. In any case, it won't worsen, don't worry, it will only improve. It'll improve.
So I mean, just to add to this question, is that the Dangote order in 1Q? The $43 million captive cement power plant order in U.A.E. and the domestic chemical plant order, are these fixed-price contracts?
Yes, all of them are fixed-price contracts. See, unless you take a [indiscernible] will give India order , there is -- maybe some oil companies, there is no price variation available today in the market, and it has been the same. However, whenever a major increase in any raw material price were to happen, we always have a dialogue with the customer. But PSUs are incapable of helping us, whereas private customers sometimes agree for some amount of sharing of the improvement in increasing costs. See, you should recognize for the fact that steel prices have gone up almost by 38%, 40% in the last 1 year. And the ability of a company to pass on the cost input increase to the market in a buyer's market is not so good. Whereas if the same thing were to happen in the seller's market where all of us are plum with orders and our order book is full, then we can always say, sorry, we can't take it. So that is the current condition. It's not improved since Thermax has improved the order intake and current conditions. I may not be able to say the same thing about my smaller competitors who are still struggling in the market. So it'll take a little longer time and a better turnaround of the market to say that I will not be able to supply at normal price.
And one last question is on 9-month order inflow stand-alone. What is the breakup between energy and enrollment?
Amitabha, do you want to help him out?
So for the quarter, the order booking on energy is INR 965 crore; environment, INR 251 crore; chemical, INR 80 crore; total, INR 1,296 crore. This is the stand-alone order intake. At a consolidated level, INR 1,081 crore, energy; INR 251 crore, environment; INR 81 crore, chemical; total, INR 1,413 crore. So this is the quarterly order intake.
And for the 9 months?
For 9 months on a stand-alone basis, energy, INR 3,418 crore; environment, INR 568 crore; chemical, INR 237 crore; total, INR 4,223 crore. At a consolidated level, energy, INR 3,959 crore; environment, INR 568 crore; and chemical, INR 255 crores; total, INR 4,782 crore.
The next question is from the line of Harish Biyani from SBI Mutual Fund.
Sir, again on the margin, so rupee has appreciated in the past couple of months, in fact, a year or so now. And if you look at the commodity prices, they have been inching up. And all the contracts that you have been getting over the past couple of years, they -- those are all competitively fought with much aggression. So despite that, whatever performance has come in the energy segment is commendable, clearly, but incrementally, despite all these pressures, we still kind of believe that margins are inching upwards to double digits in the next couple of years, is that a fair understanding?
There are 2, 3 assumptions that we have in our mind. Number one and foremost is our ability to continue to operate with the tightness -- cost tightness that we have been able to manage. Any laxity in that certainly will be the -- pointed towards reduction in margins, which we will not allow as a management. Point number one. Second, we are not expecting the rupee to strengthen any further. It's a debatable issue, I'm sure. Even today, the forwards are available at 66, which means the [ globe ] is currently telling with American economy going to strengthen and Indian economy not going to strengthen as much, and with inflation not at the -- in 2s, in 3s, in 4s, you may not find any further strengthening. So our anticipation going forward is that rupee will loosen a little more. Now will it be 65 or 66, 68 is anybody's guess. But in my opinion, it cannot be coming down to the version many -- some of you do talk about coming down to 60. So that's an assumption which I have in my mind. Beyond that, I'm not expecting commodity prices to be strengthening. The minimum import price was something, [ which was ] advocated, we -- all of us put together, to ensure that the steel industry in India survives and flourishes, but not does -- enters into a level of profiteering. So certainly, there'll be -- they almost come to a level where I can today import at whatever is the rate might be, as the government has potential to be able to, I mean, manage. And third country sales, with the facilities outside the country available for a company like Thermax, we'll have to relook at, do I make everything in India or do I buy certain things prefabricated from other countries where the steel price is similarly as bad as India. See, even if levelized pricing were to be happening, then we would have been able to pass it down. And next assumption which I have, I need to be telling [indiscernible] that I’m seeing some green shoots in the infra area, barring the power. If, selectively, they were to start moving upwards, not only Indian [ cue ], and American economy is stabilizing and moving upwards, global economy is still talking about at least a point -- 20 basis point improvement in the global GDP. And Europe currently is not talking anything negative. Many of the negatives, barring the German political uncertainty. And Japan, after maybe a decade, talking about a growth in that country. And China, again, no more negatives. The global economy is now looking up, and the lack of investment of the last, maybe I would say, almost a decade, India survived because of their impetus and similar done by the then government, UPA government 2008. But despite all of the stimuluses, the investment cycle has not really caught on in the developed world, which I think is also going to the gap of 8 to 10 years. Some amount of pickup is going to happen in the larger economies of the world. So these are all, again, conjectures and inferences from various data points. If there is a recovery going to happen, I'm not trying to say that 2003 to 2010 is going to repeat in India, but selectively and going towards an investment cycle, then the prices should improve in the market also. Even if the prices don't improve, our ability to pass on the cost increase, at least at pass-through level, should happen. We don't want to do profiteering. So when I compare that to those good days when we made maybe up to maybe profits in teen numbers, I mean, Thermax is 13% also. So the ability of the organization remains. So my suggestion or a talk related to -- we would want to aim for double digits. It is a realistic assumption. But I mean, it's not 1 item, multiple items can be realized. All of them can also support us. That's the reality.
Right, sir. My second question is, if we compare the previous upcycle versus, say, hypothetically in the next couple of years, we have an upcycle or a start of an upcycle, do you see any industry which were there in the previous upcycle which may not participate in this particular upcycle? Because one issue was the availability of coal or certain industries may not want to put in more CapEx. They would want to [ coal asset light ]. So is there the -- so what are you looking at in the coming upcycle whenever it is?
Yes, there are 2 distinctive differences which I want to talk. Number one is that last upcycle, Thermax was a domestically oriented company with very little export orientation, we took orders. In the current upcycle, even though we are global in nature, we’ll be present as much in India as in the international markets, so there should be an upside on the internationalization initiative of the company. Point number one. Number two, negative, which is I'm very clear about the fact that the conventional coal-fired or fossil-oriented power will not come back to normalcy even in the upcycle were to be taking. I may take an exception for the captive power to circulation because the lack of investment that has happened in past, maybe 4 to 5 years, in India has been adding frugal levels of capacity in thermal-oriented power plants where coal is still available in the country. So if -- imagine a $2.5 trillion economy were to grow at maybe an 8% or 9% for a period of 4 to 5 years, the energy intensity within economy, 1 is to 1. There is no way we'll be able to bridge the power gap unless people go for captive, that's my own assumption. Now that's something which we'll have to live through -- experience at that stage. So that is my assumption. Steel is another item where I would have expected things not to grow, but I am privy to the fact that the government themselves [ is consisted of ] very senior committee, comprising of 3 to 4 secretaries and some experts in the industry, and to plan for a capacity upgradation from 130 to 300 million tonnes per annum. It's a humongous task and even ambitious plan. But if that were to come back, predominant part of the steel industry in India is private in nature, and there are global players who can come because not all balance sheets are stressed in the world. So if we are going to be having a protection given or -- I don't know how to say protection given the level of the current, but this is an indicator that government of India overnight can decide about various increases. We were bringing down our customs duty regime to single digits, and today, there are items which are at 20% duty also. The mobile phones that you buy today will have components coming at 15%, and some of them will get into 20% -- 15% to 20% duty regime. So it's an indication that they can protect the industry. And WTO is not, I mean, such a tool anymore, the way it prevailed in the last cycle. So with a weakened WTO, I presume that India will invest. But even steel is also a possibility is what I want to say. Cement, in any case, is local industry. Nobody's going to bring in cement from some country. It's just for a number of times that it's impractical to be getting in cement from outside India. So the -- so if a cycle were to pick up, the answer I want to give, barring the main thermal power, every infra-oriented larger investment will go up. Now one item, and we'll start with fertilizer. Well, their government policy currently is not to favor urea beyond a level. They possibly believe that we are going to discourage usage of that and we will move to NPK. So the moment we are going move to NPK, the investment cycles will come down. So our opportunity in a classical fertilizer plant, which should have maybe a couple of hundred crores with the captive power plant happening sometimes can be as high as INR 300 crore to INR 400 crore, in a combined cycle kind of a plant -- energy plant, may come down substantially. So even if fertilizer were to turn around, and it'll be needed in the country. I don't think capital goods companies are going to be benefiting substantially from that. So that's the overall take, Harish, from the turnaround possibility. They're all conjectures and inferences as [indiscernible].
The next question is from the line of Renu Baid from IIFL.
Sir, a couple of questions. A, first, we just spoke about the overall cycle panning across and the orders that we have seen. But if you can help us understand that this kind of growth in orders that you've seen across segments and sectors, how do they stack up sector-wise? Broad mix with respect to YTD in flows or order backlog, the top 5 industries, and how do they compare with during 2008, '10 days? How is it different than that mix? Are we seeing a mix now improving more towards cyclical sectors compared to consumption-driven sectors?
See, I can only talk about the orders that we received and this cannot reflective of India. Because in the first 9 months, 49% of the orders that we have received, 49.3% to be precise, is almost 50-50 domestic with international. So any inference made out of Thermax's improved order booking to Indian economy turning around will be a wrong assumption. So point number one. But if we were to look at international plus domestic, where we have been able to be successful, oil and refinery petrochemicals as a single segment is almost equivalent to 30% of the order intake in the current year, which I've never seen, barring 1 quarter when I had planned order for the big 1,700 come in. So if I had to keep that away, the first 9 months of the current year, our refinery petrochemicals segment, all of you will be surprised, with the oil prices having come down, how can it happen? Well, people actually believing that EV is a distant dream. It's a political dream, not an economic dream. It'll happen, but it's going to take time. Point number one. Second is the cement industry, more domestic, and maybe 1 order from other UAE, Sharjah Cement. Indian cement industry had been keeping all the money on their balance sheet without understanding what to do with the money because the price utilization wasn't picking. So all of them have invested with the government pressure, also for waste heat recovery-based power plant. So we had been a participant in that so we got benefited out of that. Second, the Pollution Control Act, which had multiple items related to particulate emission, SOX emission. NOX emission not yet to come, but SOX and particulate. They have pushed the steel -- cement industry, telling you guys are sitting on a pile of money, and let's do this much. And that is initiated, and ordering for augmentation of the existing pollution control equipment. So therefore, [ they go to the ] 17% of the order intake for the company in the cement industry, including international and domestic. Now there had been some sporadic investment in chemical industry, bulk chemicals, larger ones, not the distributed chemicals which I'm talking about, which is also -- maybe cements has been lucky to get some orders in that industry, 1 large order certainly would have contributed to 16%. But the real winner is the consumption sector, which I continue talking about that ordering in food, food processing, alcohol, beverages, textiles, all of them had been continuing. They are not bothered about who governs India, what is the GST, everything. While they make noise in the newspaper, on the back of it, everybody has been investing. So 17% of my orders have come -- predominant part of that's from India itself. I don't have too much of that [ particular ] order booking in the international market at this point of time, but we are trying for the duration edifice. So that is the next point. We also see other nonferrous metals -- I mean, isolated investment happening in various areas. So these are the main factors to talk about. First 9 months. Going forward, which are the other sectors which may appear over here? Fertilizer, I mentioned you, there'll be a bulk ordering going to happen, like, for maybe a couple of quarters for 2 or 3 plants. Similarly, oil, if I were to give you the numbers, in the last -- the Q3 alone, we have won orders worth INR 135 crores from the Bharat VI, which I'd been talking about. So in -- ordering is almost over for the Bharat VI Stage 1. Stage 2 is they're going to be ordering -- can be a potential of another INR 400 crore to INR 500 crore. So refinery will continue to be ordering for Bharat IV. And 2 specific refineries, [ EAL ] is ready with the quotations -- I mean, the request for quotations are going to be out in the market. That's about it.
Sure. This is pretty helpful, sir. And the second question is to help us understand, though, you did mention Danstoker was a bit weak this quarter, but as we see these revenues also have declined and losses, obviously, have mounted. So if you can help us a little more in granularity, what was the kind of provision done in China. And do we expect the revenue execution run rate in the international or [indiscernible] for us to pick up again now? Then how is the overall outlook in Danstoker levels -- at the Danstoker level?
So we have got now 3 operating companies. Number one is Danstoker in Denmark, Boilerworks in Denmark and the new edifice we started in Poland. Now for Danstoker, per se, in the current quarter had to be booking the -- all formal legal -- all expenses towards acquisition of the company, that's [ Polish ] edifice is booked in the current quarter. Apart from the 2 orders that we've executed had challenges in the margin, very specifically. So we are negative in the current quarter. However, Boilerworks is positive. Poland has marginally [ previously ] chartered release. So after absorbing all that new one, at the end of the current year, Danstoker Group is going to be a positive and profitable company, there is no doubt about that. But the profitability in the current year will be lower. The outlook for that one is that we are seeing the European economy on a positive momentum [indiscernible] just started moving in that direction. We'll be able to see an improvement in performance for Danstoker Group in the next year. China is a challenge. And well, I mentioned about some provisions to be -- also we had to make on -- we are on a legal case, which is not 1; 2, 3 of them. We see a tendency over there. I cannot talk on a con call about that, but is India having some difficulty -- are Indians having difficulty -- Indian companies having difficulty, post some of the country-to-country difficulties that we are facing, this is something which we need to watch. So I will not be pushing sales in China for some time to happen, unless we are clear about the local standing of Indian companies over there. Well, I mean, we already have business coming from the rest of the world, part of which are already fulfilled from Chinese edifice. So we'll certainly relook at -- currently, we are only waiting and watching. We're not going to push all the debt to have difficulties mounting tomorrow. So it'll be -- we were expecting it to be turning EBITDA-positive, even the current year. But I don't want it EBITDA-positive and then later have some difficulties, so we'll book that. It's not a major issue, just more time building a small business, not something large in nature. So what are the positives to talk about is that the Indonesian factory started manufacturing boilers from there. They have made the first dispatch from there. And inquiries have started increasing since we are a local company right now. But of course, traction is going to be taking time, but next year, there'll be a reportable turnover, some number to come from there. Year after that, there should be a good number come from there. And we started on the heating, and we will also be moving with our air pollution control, which has also started booking orders from Southeast Asia, using the local edifice capabilities. And water also will be moving in from standard plants there.
[Operator Instructions] The next question is from the line of Nitin Arora from Axis Mutual Funds.
Sir, just one question related to emission pricing norms, which you already -- you have been guiding us throughout the many quarters. I just want to know specifically for 1 bid which got placed by NTPC in Telangana. Just wanted your sense on the pricing from there and where we stood and -- when we were bidding for it and -- in terms of pricing? That's all from my side.
The first-ever bid for a similar plant was for Haridwar [ bench ] for [ 550 ] megawatts. We were the L1 and others where distant L2 onwards. So the current Telangana opening is at par with our L1 price of Haridwar [ bench ]. We have improved our designs and localized many other facets. So our competing capability in the market is going to be positive. Now somebody can commit a suicide and, again, bring the price down, the way it happened for supercritical boilers. If that were to happen, we will not be in the group of people who are going to commit suicide, we'll be alive. So depending upon how it's going to be panning out, we'll be participating in the next tender onwards. There are multiple tenders already put in by the company. Now, there, I said desperate because the winning party of the Telangana, if you look at it, it's not a big player in this area. I don't know whether the [indiscernible] or they are pollution controllers also. So that's not a business that they pursue, whereas we have been in that business from 1978 before the Indian Pollution Control Act was put to the parliament of India. So we have a reputation to live by, and it is not the only market that we'll be working on. So we'll play the game as it comes in. So currently, I won't be able to comment as to are we going to be the winners.
We'll move on to the next question that is from the line of Ravi Swaminathan from Spark Capital.
I have a couple of questions. Sir, when is this Tata Steel's expansion of Kalinganagar Phase 2? Do we see an opportunity from that? And secondly, there have been some of these large deals, companies acquiring district's capital power plants. Tata Steel also had mentioned one -- about one. What do you think about that? Is there a risk of them not going for CPPs, especially the larger ones like Tata Steel or Jindal?
Really, anybody going for a blast furnace route for manufacturing of steel, that's the only way for a competitive steel plant currently available in the world, though some other technologies are being tried out, they don't have a choice but to go for a captive power plant. It is not that they are going to be burning fuel in that. In the blast furnace, you've got hot gases coming out and that has got to be quenched before you sending it to the atmosphere. So that is utilized as an opportunity to be converting it into steam and generating power. So that area, other than the largest public sector company of India, we are the only one who supplies similar kind of capacity. Kalinganagar plant was done by us. Tata Steel was done by us. Even earlier plants of JSW were done by us. I presume if Kalinganagar were to go for the next expansion, which I presume is already approved by the Tata Steel Board, but only thing it has to move through Tata Power because the captive power plants of all the Tata Group is consolidated under Tata Power value [ shade ]. So once it is awarded to Tata Power, I'm sure we'll be a contender, and a very strong contender in that front. Point number one. Second, steel capacity, I'm also expecting that with the government support happening post-NCLT clarity coming on the [ distant success ] of 2 or 3 companies. Amitabha, is it 2 or 3 companies [ per deal ]?
Three.
Three, including the brothers of one group? Okay. So put together, because all of the larger players, barring Tata Steel, I don't know if Tata Steel are going to participating, are looking forward to also the sale of those assets. If any one of them were to take over that asset, then they will not go for an immediate expansion, they will have a [ stretched ] [indiscernible] balance sheet. I think the other party will go ahead with that. But I'm expecting this to be commercially in the market for placement of orders in Q2 to Q3 of next year. So we'll be a strong contender for that. If they were to go for an EPC, I'll be very happy. If they at least go for the boiler, certainly, we'll be the strongest contender for that one. Is that okay, Ravi?
Yes, got it, sir. And in terms of waste heat recovery for cement, is it an ongoing process that you see? Looking actually cement, the other players are also going for it? Or is it like it is business as usual and there won't be, I mean, that great attraction? What's your feeling on that? And how is the competition from Chinese players on this?
First and foremost, cement industry and steel industry alone with building material industry, that is ceramic tile manufacturers, are identified by the government in India as guzzlers of energy. And directive authority called to them for reducing their energy intensity or else to have every possible waste to be converted into usable energy. So cement companies are now willfully -- I mean, it also makes commercial sense at this point of time. See, all the -- all our prices of INR 2.5, INR 2.2 unnecessarily clouds our mind. In reality, the purchase price of electricity by any of these bulk buyers if they don't have a captive power plant will go all the way to INR 6. So it makes sense for them to be recovering whatever is being wasted by them, so waste heat recovery-based power plants for this sector had been going on. Earlier, we had to do a pioneering effort for almost a decade to fill the first plant, and then second, third happened with longer gaps. Today, there are multiple inquiries. But there were only 24 locations in the country where one could go for waste heat recovery-based power plant, and I don't know how many of them have are ordered. I have not taken stock of it, my team is fully aware of that. Many orders got placed in the last year and current year up to this point of time. In my understanding, there are some more of them left, which will get over by end of next year. But as a standard practice, the new greenfield capacity is getting created. We'll have in-built captive power base from waste heat recovery. In that, we have got a challenge. There are cement plant makers also who can possibly gobble up waste heat recovery solutions, including an association and consortium in China. But we are an active player because many in India weren't buying from China. The one Chinese company has also a localized part of it, but we are able to overcome. The moment they localize, our price is competitive. And there are some technical capabilities needed to execute an order in the cement plant without harming their operation. So that -- those are kind of capabilities which our company has created in project management and construction. So that should good -- stand in good stead.
Got it, sir. And this...
[Operator Instructions] We'll take the next question from the line of Venkatesh Balasubramaniam from Citi Research.
I had a couple of[Technical Difficulty]
Ladies and gentlemen, we now have the line for the management reconnected. Thank you and over to you, sir. Sir, the line for the current participant has dropped off the queue. We'll move on to the next question that is from the line of Bhavin Vithlani from Axis Capital.
So I have 2 questions, Unni. One is if you can help us -- or the size of short-cycle business, which is the BB boilers, the chillers? And the base business of air pollution and the water treatment and how has that been growing and what can we see the growth in this business as opposed the Indonesian facility and the Sri City facility? That's the question one. And the second part of the question is, again, coming back to the margins wherein if we can delve a bit, how would we be protecting ourselves given the volatility in the input prices? And are we seeing competition also easing out on the pricing given that domestic has not revived as yet?
So starting on with how do we see the growth potential for the heating and cooling business going forward with 2 of the facilities, 1 of which has already come online, and second which should be happening in June. We have made this facility for 2 reasons. Number one is we wanted to be having alternative to Pune. So that is one strategic decision related to heating and cooling. Second is to cater to global market for cooling from closer to [indiscernible] and a much bigger and modern facility. And heating, of course, in Indonesia. So what we had in our mind, apart from that alternate facility portion, is catering to an annual growth of ranging between in the bad year 6% to a good year 12%. So let me average it to 8%, 8.5% as the growth expectation that we have in the businesses going forward.
And how large would be if these 2 businesses, the heating business and the cooling business, the full year annual size?
Heating globally, including the Indonesia, Danstoker India operations, put together, in the current year, we are fitting for closer to a 4-digit number, may not touch 4 digit but closer to a 4-digit number. I should cross that in the next year in any case. That's the size of that business going to be. And cooling currently, including the orders picked up by our European head office and the American head office, which is supported from India, and the Chinese put together, we are little over 300 plus. That market is a niche market. There had been a contraction in one part of that market, which is not a heat pump, but the cooling business per se is remaining already growing at a rate of maybe 3% to 5% at this point of time.
[Operator Instructions] The next question is from the line of Venkatesh Balasubramaniam from Citi Research.
Actually, I got disconnected when the line got cut. The first question was the fact that you've won a lot of orders in the first 3 quarters, and we haven't seen this kind of order interest for a very long time. Now despite that, we haven't had great margins in this quarter, which has declined. And I believe last year, full year, you ended at around 9.7% and you did mention earlier that you expect that you will get closer to the double-digit mark. Now -- but given the market environment and given your carryforward order backlog, is it possible to expand margins by 100 to 150 basis points or even 200 basis points over the next couple of years, given that, as with the carryforward order backlog, you should be able to do 20% kind of top line growth? So is that an element of operating leverage that can play out? Or is it like given that these orders have been won competitively, they are fixed-price contracts in a rising commodity price environment, even getting to 10% would be an achievement and expecting like 11%, 12% margins is not reasonable?
Venkatesh, first, my apologies. It is -- we'll have to complain to TRAI because it is not incited with Thermax to cut the line, my apologies for it. Health problem, we have been facing on lines to Pune, within Mumbai-Pune. So coming to your question, yes, you're very -- your questions are very, very valid. There are certain assumptions that we are making that we should be able to improve the margin. It is from the past experience that we are talking about. See, the input prices can't be negotiated beyond a level, it's a global phenomena. And for steel, it is a local phenomenon with protection provided by the sovereign of the country so that we have [ delivered ]. If there's a challenge further also specifically for a commodity known as [ cubes ], there are really limited guys who can supply. We have [indiscernible] with protective orders from the public sector. So we'll have to resort to buying from outside. Thank God, a good part of the order intake is international in nature, which allows me to be importing duty-frees for those, even in -- I can pay duty and also claim the reversal later. So there are some advantages for the International orders on that front. Domestic, there are challenges on that. Thankfully, other than the government or maybe tenders where we have got to be able to take the orders, orders are finalized on the negotiation table. And 60% to 65% of Thermax orders do come from repeat customers. So there is an established brand and an experience to the customer. So always, there is a transfer and discussion which should happen. Doesn't mean that I'm able to aim and get. I would presume that -- see, going above the current levels in the current year with one more quarter left, we will do but to what extent can they come closer to 10? That is the question. But going forward, can we? Yes, we can. Because, see, whenever there's a challenge, we have always come with a solution, which is more technical in nature, the new products that we have introduced, cost-reduction expense that we have been able to manage. There are products that we have been able to get a cost reduction almost double digits. It shall translate into maybe 3% to 4% in the selling price, but I can't get that from the market. So I can at least come down and pick orders at least [ in the ] margin. But there is one factor which can help. I will -- I mean I shouldn't say this as an Indian, that rupee will go back to 68. I'll certainly come back to -- I'll guarantee it will be making double-digit profit. I'm sure it won't [indiscernible]. So that, as an [indiscernible] I mean, I'm sure the government will not like it because the -- I mean, crude oil price hasn't gone up. But the indications are that rupee won't strengthen any further, maybe you guys can advise me on that count. But yes, it's a play. It's a tougher play to go ahead with. But you also asked, will I have margins kicking in on account of the size going up. To a certain extent, it is all right. But for the larger projects, you budget and cost for each of the project. If it is an automobile industry or maybe with standard products, well, it could have been better. One unknown thing to all of you is about that they've got a service arm embedded in our businesses, which do not have to be shrinking the margin, and the growth for that can be compensated for part of this. And today, if I were to look at my service business alone, we'll be touching 14% of the total top end of the organization. So that is not the normal margins of single digit. So it's having double digits -- better double digits, let me say.
Okay. Sir, the second question is slightly more strategic. Sorry if that question -- if this question seems a little harsh, even -- see, sir, as we are closing -- coming to a close on FY '18 and as we look at numbers, it looks like most probably you're going to end up with something like INR 290 crores kind of profit. And as I look back in time, 2008 also we ended with INR 290 crores. So basically, in 10 years, we have basically not grown our profits. So -- and we have done -- we have taken lots of initiatives in the interim period. We have expanded in China, we have expanded in Europe. We have looked at opportunities in biomass. We have looked at opportunities in supercritical boilers. We have talked about Namami Gange as an opportunity. We talked about the pollution opportunity. But that doesn't seem to be translating into numbers. And we have had time and time again, we have expanded and taken a new initiative going to a new country, put up manufacturing facilities or made an acquisition and then we have written it off. Now as we see that you are moving into -- you have put up this facility in Indonesia. Now one thing which we wonder is whenever we see an opportunity, there is an opportunity. But are we, to some extent, underestimating our competition from behaving irrationally? Now we are in an environment globally where there aren't enough capital goods orders, and everybody is behaving irrationally because everybody is trying to fill up facilities. Is it better to hunker down and possibly, instead of expanding capacity, possibly pay out higher dividends? And is that some strategy which you have thought about? Or what exactly do the promoters communicate to you from time to time in terms of what exactly are we trying to achieve? Are we trying to become bigger in size? Are we trying to generate more cash flow? What is the key success factor on which you are judged and you are asked to operate on? Sorry if it seems like a very harsh question.
I like -- I love questions like this because it also incites us to think and sharpen our way of thinking. See, organizations, which are declining on top line and on profits and profitability, the ultimate is death. So I'm sure as an investor or somebody who advises investor, you are not wanting a death of a healthy organization. So when you have -- if you plan for a number of things but the market doesn't support you, the capability should be there to remove the cloth and put a new one and walk off without the dirty clothes. So we keep it at a largest miscalculation or maybe I would say that environmental factor, which is -- had been negative was at TBWES. Well, I mean, we have passed through that. That's nothing to worry about there because it's okay, we make money, we lose money. But in business, do you have an ability to stand by and continue to be believing that you can still make money. I'm not naming but there are companies in this country who's gone down under, including the largest capital goods company of the country has reported in next of [ INR 1,000 per loss ] in a particular area, I hope you are aware of that, for the aggressive decision they have taken. And there are a lot of capital goods company, which is possibly at now -- may reach in CLT. Maybe you have gone down under even listed companies who got market cap going all the way in material handling to $0.5 billion. So you still have Thermax sustaining and talking we'll grow. Is it guts? So that is something which we are and the capability that we have. We have done everything to ensure that in the worse of the situation, the best time was INR 6,000 crore when we were a billion dollar company. Last year, when we came down to INR 4,300 crore, we were still very close to a double-digit profit, do you believe that? And we've done it in the market where hardly anything was [indiscernible]. You've got to try in every avenue possible, and not that I'm expecting we are going to be winning in everything. Well, for that you've got to be God, we are not. So we're very clear about the fact that we are into energy environment, and we will look at every possibility and we don't guarantee everything is going to be a success. But our average of success, if you look at it, we are possibly better off than many others in this field. That solved my answer for it. Now, I'm very confident about the fact that, for example, China investment takes the trouble today on account of the fact that -- I'm not [indiscernible] shouldn't be talking about it, a standoff between 2 countries. Am I correct? I [ should ] have asked for a repetition of a president to be coming in having a different way of thinking about how he will want to control the world. So this is unpredictable when you make a business plan, I'm sure, whether I make it or anybody makes it. But these are the areas -- see, in a business you rate an organization by its agility and then ability to be withstanding environmental pressures, which we have seen in the most difficult times. We have been able to resurrect. Thank God, we're not -- we didn't have to get in the negative and the red. We are positive. And possibly you guys are valuing us based on, I mean, what you perceive is our strength. So we'll continue to continually guarantee to you that we will continue to be buying companies, we'll continue to be setting up capabilities and facilities outside. If I did not go to [ ECN ]market, which, in my opinion, for the standard products is going to be exceeding India's demand in the next 5 to 6 years' time, well, I'll not be a player over there, somebody else would have come there. Today, I'm there. So my competition will think multiple times before they're setting up the capacity and the first-mover advantage, which I'll get. But if that Indonesian country were to follow the model of the largest -- second-largest economy of the world in terms of certain policies [ related to ]. Well, I mean, I may not be able to sustain over there also. But it may not be the case. Now the next level of growth for me is that wanting to participate in the developed world. See, we have shied away from buying companies in European continent after a misadventure in the 1990s, which many of you are not aware of that, an [indiscernible] engineering, which we bought and closed down. We bought them so that knowing fully well Omnical was there as a negative company, not a classical Indian company so that we can turn it around. [indiscernible] turn around a German business is not an easy task. So when we are tired, we closed it. But today is the [ profitability of this ]. I mean how many European capital goods coming are making money. Thermax and Danstoker will report profits even today in the current year, not -- this quarter is negative, but we'll continue to be making also. And we are looking at other acquisitions also possible to increase the equipment business and to service business also. The service around the customer, well it's something which can improve the margin, a life-cycle management, which we have not been able to start it in the Europe edifice. We will -- I mean, I want to be telling that we're not going to shy away even from the North American market if manufacturing is going to come back over there. So we'll do that. Because heating, cooling and captive generation of energy in different forms will have to remain in the business or maybe manufacturing sector. And if manufacturing is going to be dying in the world, well, there is no opportunity for me. I presume that maybe -- I mean, I'm sorry for giving you a long lecture, but to tell you precisely of the 7.5 billion human beings available, approximately an 18% to 20% of them are well-provided, another maybe a 25%, 30% are getting provided, half of them don't even have the basic requirements. I very strongly believe, as somebody in the industry, that investments are going to happen in creating capacity in the underdeveloped and developing world. And we are targeting that, and we'll continue to do that.
The next question is from the line of Kirthi Jain from Sundaram Mutual Fund.
First question is with regard to chemical business, we have seen some drop in the profitability. So, any one-off reasons? Or is it the normal profitability? What do you think, sir?
It is -- [ PBT ] number you are seeing, last quarter, we have commissioned the hedge plan, this is an investment of INR 145 crores, INR 150 crores, so the differentiation would have been already there. We normally report PBT. So if I were to add the depreciation back, it has not deteriorated to that extent. Though they could have been made in the earlier quarters if there's a chunky order, which could add something better. Otherwise, nothing to worry on that account. Yes -- but -- okay, why should I not tell you about that styrene prices have gone up in the world and crude petroleum has moved up to [ $65 ]. And I'm a very minor buyer, so I cannot do a bulk buying or a supertanker to carry the styrene. So there will be input price pressure to [ set mixing], but it's not going to be impacting beyond a level because not only the [ Russians ], we also are in the construction chemicals [ started over there ] and performance chemicals. So there, margin maintenance is a possibility. Will it compromise on that? Quarter-over-quarter, once in a while, you may find this kind of a thing and going forward also for the yearly result of the next few years, the depreciation is going to be there. And just to clarify to you, I've already cleared the Phase 2 expansion program for the Dahej plant and we will commission that by possibly March of FY '19. So depreciation will further also increase. There is a reason for it, but some other time, I'll let you know about that.
Okay. Sir, on our base capacity, we have also brought this to -- 400 tonne is our current utilization at the Dahej facility. So if I look at it, it's like a 10% tonne per annum plus 4,800 annualized capacity. So -- but we are seeing only 10% growth in our chemical business, sir. So have you shipped out some of the Maharashtra business to Gujarat facility, sir?
Yes, certainly is. Let me clarify to you. Our entire intention of Dahej plant is one day to ensure that, that becomes our resin plant for the future. So the Phase 1 of this plant is 12,000 meter cube capacity, which will be -- whereas in the current year where demand is almost closer to 17,000 up to end of March. Next year, the demand is going to go all the way up to 18,500 to maybe even 30,000, if I am able to pick some bulk orders. So that's why the Phase 2 is, since you asked the question, I have to be clarifying to you. [ But we'll not ] run both the plants together. So at a very quick succession, I want to reach it up to 22,000 meter cube so that I'll take care of the capacity requirement up to FY '20. And then the Phase 3, also, will happen over there to rise it up to 40,000 meter cube, that's our ultimate master plan for that factory, which will go up only as and when we have the market improvement happening. We have been selling this predominantly in America and many other countries. Our next target market is Europe. Whatever we've done in America where we're selling approximately $14 million, $15 million of resins, we want to do the same thing replicated in Europe. We already started the marketing function for it. So the growth in that business to go to 40,000 will predominantly come from Europe and the rest of the world. That's the way we have planned about it. So currently, if you ask me, I am running both. I need to be running. And mind you, the plant in Dahej is a fully automated computerized manufacturing facility. In that, we need to be very clear about that we create the production algorithms. It does take time to reach up to 1,000. That's why I mentioned about maybe by June, we should be able to reach -- maybe, we will be able to reach 10,000; 1,000 meter cube per month, but that will be insufficient. So until first time I commission the balance, 10,000, which is going to be possibly March of the -- of '19, I let run the [indiscernible] one, that's Maharashtra one also. So both of them are running.
The next question is from the line of [ Kapil Joshi ] from [indiscernible].
Sir, just wanted to know the future outlook of the chemical segment. Like this quarter, we haven't -- we have not seen much growth in the chemical segment, like only [indiscernible] growth [indiscernible] of Q-on-Q figures. So just wanted to know what kind of growth we can see in the next 3 years -- 3 to 4 years ?
We've had constraint with the capacity for the resin business, there is no capacity constraint for the rest of them. My expectation of chemical business growth for the next, if you take a 5-year block, should grow at the rate of 15% is what I'm expecting.
If it's at average rate of...
Yes, average rate of 15-ish would be...
The next question is from the line of Bhavin Vithlani from Axis Capital.
Just a recap of the questions on the margin. So we saw environment business also volatility in the margins. Can you help us what is the steady-state margins in the environment? And how do we see the growth in environment now picking up? You spoke about some opportunity in cement sector for air pollution.
Yes, Bhavin, environment will not be able to match up with the profitability level of energy because environment business predominant part of that is the air-pollution control and water and wastewater treatment. In the water treatment, it is possible to get better margins, but wastewater treatment, the air pollution will only be seen by the industry as a burden on them rather than a social obligation on them. So margins normally come under pressure. To make more margins, one may have to make compromises on your offering, which you know Thermax will never do that thing. So we get the premium also in the market as the people deliver what we really commit on that. We are trying -- as the size of orders go up, the smaller competition cannot come into the fray. So there is an even-level play available. Only then we will be able to see a betterment of margin. Second is, as I mentioned, predominantly, we were an Indian operator for both those businesses. We are branching out into -- outside India. The Southeast Asian initiative, though, Indonesian plant was only for boiler in the beginning. We would like to localize the [indiscernible] of offerings of water and wastewater, which we are able to make double-digit profit also, majority of the time in India. We want to take it over there. We also started making forays into Middle East. Very happy to inform you that we have got an order from the municipal corporation of Kuwait for a water treatment plant. We have inquiries getting generated in those markets, which do give you a better recovery also. But even then, I cannot foresee it -- and maybe there could be a quarter or maybe some time when we get a chunky, good price order, may have a improvement in margin, but otherwise, we always trail behind the energy for profitability.
Ladies and gentlemen, that was the last question.
No, I'm extending by 10 minutes. I have taken their 10 minutes away, they should get 10 more minutes. Please give them 10 more minutes.
We'll take the next question from the line of [indiscernible] from [indiscernible].
This is Abhishek Puri from Deutsche Bank. Sir, congratulations for getting back to the double-digit growth that we have been -- you've been waiting for some time. Good to see that your return on capital is also strong in the energy business and the margins are growing. Just quickly, I think from Bhavin's question, should we assume that the environmental business margin should be between 2% to 3% where we are reporting right now? And last year, we had about 8% or 9% margin in the last 2 quarters of the year, and that is part of the reason why your EBITDA margins are lower.
Abhishek, chemical was the part of the environment last year or [ you want me to ] divide it. Okay. Environment can report 8% to 9%, I will not want to bet right now on, certainly, not 2% to 3%. Even the water business, which was a negative, has now turned positive and we are trying to improve the profitability in that area. Air pollution control, there were very less ordering and the only division which got impacted by the steel price increase is air pollution control, which maybe you may not recall right now, maybe 7, 8 years back, in con calls I used to talk about that. The only business of Thermax where steel price increase can impact very quickly is air pollution control on the [indiscernible]. In boiler business, cooling business, they are all specialized fields that we buy, and we have got rate contracts available. Our -- in any case, even for a project within 7 days of a receipt of the order, we -- our order in advance from the customer, we would have placed our orders for the specialized steel. Whereas for the air pollution control, we use very ordinary steel, very normal structural steel and ducting steel and plain sheets, which nobody in the country will be willing to sign a paid contract with us, and it is normally ordered out only as a pending of executing the order. And the customers, once they give you a 10% advance and a piece of paper telling that's the order, it's very difficult to move them on the price curve. If a price variation is up to INR 1 to INR 2 per kilogram, it's INR 1,000, INR 2,000 a tonne, it is manageable. That kind of contingencies are available in the business. But when it has gone up all the way from INR 28 in the beginning of the year all the way to INR 40, that INR 40 is something which is really, really killing. And then, of course, short-cycle orders, we will always be able to execute quickly. But the medium cycle, where I may not have delayed the project, customers themselves are delaying the project where he will still not pay me the extra price. And on principle, Thermax is a company which will never walk away from an order from a customer. That's why we have repeat orders coming from the customers because they know even when I'm supplying it and making losses, he'll say, okay, next time I'll help you out. So to retain the relationship, organization like Thermax become a little emotional when we are in contraction when you're executing it also. So that has played into the current year's balance sheet. Next year -- last year, it's not there. So currently, it is stabilized at INR 40-plus, and I don't expect the price to go beyond. At least the conventional steel will grow within the bound -- range bound of INR 1 to INR 2 or maybe INR 3, which is absorbable with a company or transferable to customer in the future. Is that okay, Abhishek?
Fair enough, sir. Sir, second question is on the order breakup that you gave into 5 segments oil and gas, cement, bulk chemicals and consumption, could you give us a sense that this order book growth of 20%-plus that you have seen for the last 3 quarters, is that likely to continue? Is there a [indiscernible] in the pipeline that probably you can share that gives us confidence that this 20% growth can continue in inflows?
It's a very tough question to answer. When I look at inquiries on hand, if finalizations were to take off, I think one more quarter can pass through. Viewing that as a prediction [indiscernible]. The [indiscernible] is almost the same. So that's where we'll have to [indiscernible].
The next question is from the line of Karan Rathod from ICICI Securities.
This is Karan Rathod from ICICI Securities. Just 2 quick questions. Firstly, could you help give some guidance for FY '18 considering that we have not grown -- we have just marginally grown for 9 months. So what could be the possible revenue growth for the full year?
Well, that is a question which I am unable to answer even to the board of my company. One month is already past, we were worried about is [indiscernible] going to kill us. Thank God, the system crashed and we escaped and run. So the next run has started in all our factories to ensure that -- we are producing to ensure that there is a growth in the current year. But it cannot be a major growth. The orders may be on hand, many of the orders are -- larger ones have come in the recent past. So revenue recognizing them beyond a level is impractical, and we won't push, I mean, for growth. But year-end revenue growth, guidance is something which, on principle, we don't give on accord of the fact that we don't want to say or do something wrong by giving a commitment, that's why. We should be growing in the current year.
Okay, so just as an assumption, could we assume that it could be in the low single digits?
Well, you guys have arithmetic known far superior than me. You must have all the numbers in front of you. You have the answers also to be arrived. So it will certainly been single digits, that's for sure. At what level -- see, one will want it to be growing as better, but currently, there's nothing negative in the market, I told you would mean that we could have a major dampener. But we don't know, tomorrow the [ GST ] system would be crashing, which is quite likely in my opinion. I give a guidance of the market and, I mean, it's unfair on my part to be doing on that count. We'll grow in the current year that much I can guarantee.
We'll take the next question from the line of Sujit Jain from HDFC Securities.
Sir, just want to understand for FY '17 or for the 9 months, in the energy revenue, if you could break up that revenue for FY '18 9 months, just to understand where we are headed to breakup that revenue between captive, heating, cooling and EPC?
That's level of granularity we don't normally give. Amitabha can give you the energy environment, he has already given.
We don't want exact numbers but just to have some sense.
It's -- even I myself haven't gone through the numbers in front of me. The way we started reporting is the way we started reviewing the numbers. It's not available. Approximate -- Amitabha, investment. Cooling is the smallest one, and what is the total of the energy itself for the revenue?
Energy revenue is for the 9 months, 2,400 -- INR 2,381 crore is the 9 months' revenue at a consolidated level.
So at year-end, I'll tell you, will the cooling -- will be just about 300-odd number will be the year-end . The balance will be between heating and -- because what happens in heating also -- well, I'll tell you, it's not that we want to hide any numbers. The way we operate over here, part of that gets reported into the EPC of my business. So it is absorbed by them, and the boilers are supplied both by the B&H, that's the larger boiler business -- project business as well as a standard boiler business. Because these days, people go for cogeneration power plants where the boiler is made by the heating division itself, not by the B&H division. There was a time when B&H was linked to only the EPC business. Then why we don't disseminate. And see, it's not a boiler alone. That's where the difficulty happens. Each division what we are giving, it's -- when you do a project, it's the components which you supply. Unlike in the heating, smaller products, it's a -- full product is made in the factory and dispatched. So we don't track it that way. Sector-wise, we will do that. Those are -- industry-wise, numbers will be available, but how much of that is embedded under the captive consumption by the power business, EPC business, we'll have to offset it. That's the reason for it.
So just to follow-up on this question, is that eventually if the captive power business and the heating business were to shift to solar power, then what is the answer from Thermax to that kind of disruption?
Of the total energy business, cooling is going to be independent. Heating is going to be also independent and, if at all, people were to go for solar, we also have a solution for solar hybridization with the heating. As we mentioned about in the current year, India global heating business would be touching closer to 1,000, in that cogeneration portion, could be a 20% legacy there globally. But that may not get impacted with the solar coming on to the [ remit ] steel. So he's utilizing that steel generation at a higher pressure and temperature. So heating business will escape, cooling business will escape. My main boilers and heater business, in that, wherever there is a captive orientation, so current year, we will be doing almost maybe a INR 750-plus crores in the EPC business for captive power overall. In that, some of them are waste heat-oriented, similar like I mentioned about. The pure captive, like maybe a coal-fired boiler generating power, all put together could be in the region of around maybe INR 500 crore, Amitabha? INR 500 crore to INR 600 crore let us say, for a total number of INR 3,000 crore in the full year. So how much will that be? Around 20% will be impacted, let us say that. The captive power will have a 20% impact on the energy business. Overall on the company, it maybe in teens, whatever is that number.
So you are saying within the EPC business, roughly INR 500 crore would be coming from pure captive and about INR 250 crore would be waste heat recovery.
Correct. And we are also now into solar. Current year, I think it should be touching INR 60 crore, INR 70 crore PV rooftop and order booking is improving. We're not really pushing it beyond a level because that is for a big number, bottom will be very small, which will not keep you happy.
Got it. But micro grid kind of opportunity for industrial, what is our footprint there?
What, with the solar or nonsolar?
Solar.
Opportunities are there, if you like, there, you've got to invest money and become an owner and a developer. It's not an area that we would want to be because that business is going to face a shakeout in the near future. And China will control the global market. And if they decide to sweep the market tomorrow, many people who are wanting to invest, an investor may find it difficult. So let me -- we also -- it's not that we don't want to grow, we want to grow in the solar rooftop business. Isolated, we may -- we also bid for NTPC-equivalent 50 megawatt and 60 megawatt. But we have our cutoff point, beyond which we'll not come down. Because a lot of pointers taken by people while bidding in anticipation of the reduction in price of the solar panels, they do take your orders, and many of them have been successful in ensuring that the prices came down. They were lucky then. But that's a point being taking. That's not the way we will do business. So we are also continuing with the solar option, solar thermal option and solar PV option, but in a very small way.
The next question is from the line of Renu Baid from IIFL.
It was the last question. This is for Amitabha, sir. Or if you can share the order backlog breakup between energy environment for the group and for stand-alone. That's it, sir.
Okay, order backlog for the -- I'll give you the consolidated breakup, INR 4,812 crore, energy; INR 713 crore, environment; and INR 30 crore, chemical. Total, INR 5,555 crore is the overall order balance.
Okay, and for stand-alone?
Energy, INR 4,403 crore; environment, INR 713 crore; and chemicals, INR 27 crore; total, [INR 5,144 crore ].
Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for the closing comments.
Thanks a lot once again to each one of you for being with us and being supportive and asking very, very interesting questions. In fact, I really appreciate questions like the way Venkatesh asked because these are the kind of things which will make us also think -- many a times, we believe we are doing the right thing. When you ask questions of that sort, it will also set us to think, and many a times come with different answers. So again, thanking you in being with us. It is not a turnaround, but it's a forced turnaround. Thermax is making it happen by going to the international market. And margins under pressure also can be improved. And let's work and report back to you as soon -- and be able to do that in 3 months down the line. Thank you.
Thank you. Ladies and gentlemen, with that, we conclude today's conference. Thank you for joining, and you may now disconnect your lines. Thank you.