Given that we are at perhaps the brink of the manufacturing renaissance in India, what role do you see the Thermax Group playing in the next three to five years?
Ashish Bhandari: Thermax is a company that has been part of India’s energy spectrum for more than 50 years. As we look at the future, we see our role very clearly as one that balances energy availability with energy sustainability. So, energy transition-related technologies, not just green but how do you make the existing carbon footprint greener, more efficient and better.

How do you do more waste-to-energy-related projects, biomass, renewables; how do you make coal cleaner, all of these solutions are part of what Thermax looks at for the future.

After Covid, everybody is excited about the push towards manufacturing aatmanirbharta (self sufficiency) or China plus one. For Thermax, what has changed and do you think the excitement in the markets and in general the industry is a real deal?
Ashish Bhandari: We have been asking that question now for a couple of years. It was first the recovery from COVID. Now, is it real? The last month and a half, as part of Thermax’s reinvention journey, we have been traveling to multiple cities in India. Last month alone, I went to Chandigarh, Ahmedabad, Kolkata, Hyderabad and Lucknow. In almost every place that I have gone to where I meet CEOs as well as customers. Everyone looks positive. Yes, because of the elections, maybe for a quarter or so, decisions will be pending. People are wondering should I wait or not? But almost every customer, every segment that I speak with, are bullish about their future. They are looking to invest and that is a sense of optimism that I have not seen for a very-very long time.

How much of the excitement is coming from businesses where you are gaining because China is losing?
Ashish Bhandari: Tough to say directly. Yes, anecdotally, when you ask people, you get some instances like textiles and very clearly you can hear that across the board, in some amount of chemicals and pharmaceuticals you can hear that. Anecdotally, here and there, but I would say that for almost everybody that I speak with, including people that are looking to add capacities in India, the domestic consumption story is a big part and perhaps a bigger part of the dialogue.

Energy transition is something everybody is excited about. You are excited about new energy. How much of the energy transition in new-age business is going to be the needle moving business for Thermax in the next three to five years?
Ashish Bhandari: A significant portion. It already is and going forward, I would imagine by 2030, almost two-thirds of Thermax would be growing businesses that are very small today as part of the larger Thermax portfolio. We expect to drive almost every one of these newer areas that we are getting into and they are not necessarily, there are solutions around; even cooling, how do you do industrial cooling in a very energy efficient way, they are not necessarily hydrogen or solar based. There are a variety of new ideas and capabilities that the market is ready for and these will drive the growth for Thermax going forward.Can I say that manufacturing, at least the area which you represent, it is at the cusp of a multi-year growth and it is like saying, somebody identified IT or TMT sector in 1995 and 1996 and before it got topped out, it actually enjoyed five, six, seven years of a mega bull run. Do you see that kind of an excitement in the business and the sector and the areas which you represent?
Ashish Bhandari: I guess it is a relative point on how much growth to expect. Do I expect a multi-year strong momentum based on India demand and also in many cases, international demand as well, based on differentiated capabilities we have in India? Absolutely yes. I think every sector that we look at and the biggest statistic that is getting quoted around a lot is that India has to build three new Indias in the next 25 years. What we have done in the last 75 years, we need to build three of those Indias in the next 25 years which means the demand for everything, not only steel, cement. How do you make water cleaner; how do you recycle more water, desalination; how do we make our air cleaner? Almost every part of the puzzle. Newer things would be required. New technology, more demand, more capabilities and these are the spaces that Thermax plays in.

A lot of questions are coming in from there, really – A) what is the energy of the future because you said that a lot of models and energy sources are being tested around right now. B) Your current order balance is about Rs 10,000 crore, in the next five years what could be this figure? I am guessing you are already pencilling in a manifold growth.
Ashish Bhandari: So, we have not actually put in a specific number on size over the next five years. We have done extensive work on what this period will look like, but our focus is on what capabilities we want to develop by which portion and how these markets will unfold, how the larger growth will come about. We will see, but the capabilities is something that we can focus on developing and what money we need to be able to focus on these capabilities and build them out and making sure that we have access to funds, we have investment capability in that, that is our focus.

In terms of how big the backlog will be, what the size of the business will be, is almost a secondary discussion. I would actually want to talk about the first part of what you talked about, which is what will that energy basket look like in the future? There, especially if we take the next five to seven years, there is still quite a bit of uncertainty. First, there is uncertainty around coal. What will the future of coal be? And as we look right now, India is going through a phase where we will be investing in coal which was not something I would have said a couple of years ago also. There is a big set of investments that are coming in coal. Most of these are large supercritical power plants driven by PSUs and related large companies. There is also demand across the board for clean coal related technologies, including coal gasification and FGDs and variety of related technologies.

The one which is not that clear is how carbon capture will come about and whether carbon capture will have a big role in India or not. The other big question is the role of hydrogen going forward and how big can hydrogen grow? We are all making investments, but the cost of hydrogen coming down is a very big open question, along with some of the policy decisions that are needed to drive hydrogen to scale.

One more that I can refer to is just this push on biofuels in every sector that we look at, whether it is bio-CNG, bioethanol, bio-related aviation fuels and the like, the whole space has got a lot of new technology, but again needs policy support and variety of other interventions. So, the theme is policy, what will it do, how will green financing come into play, what role will it take, what technology decisions pan out or not pan out. So, overall, a very-very exciting period as we look at, one that comes with some amount of risk as well.

Let us use the GDP as a benchmark here, the GDP is expected to grow in the region of about 7% to 8%. I add back inflation, that makes it a nominal GDP of about 12% to 13%. If I look at fine companies like Thermax, they will gain 2% or 3% more than the GDP. So, can I say 15% to 18% growth for Thermax, like a big picture growth for Thermax for the next three to five years?
Ashish Bhandari: I do not know if it is given, but that is definitely the number to aspire for and to do better. I do not think anything is given. Lot of it depends on many things that will unfold, but as an aspiration and to aspire to meet those and to do better than those, I think that is a fair ask.

So, I will not be fair away from the mark when I say the next three to five years for Thermax and for the sector which you represent, achhe din nahi bahut ache din hai (the times are not good, they are very good).
Ashish Bhandari: I will rely on your judgment. Where I come from, is at least a focus on capabilities, which is perhaps easily the most exciting time in the last couple of decades, on the kinds of newer things that we can bring to the market and an appreciation and demand for those kinds of things. If the larger economy continues to do well, the rest of the growth will come through.