Multibagger Stock: Thermax surges 100% in 7 months, 617% in less than 4 years; what should investors do?

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Thermax, a leading energy and environment solutions provider, have been on an upward trend over the last seven months, producing a stellar performance and significantly enhancing shareholder wealth in a relatively brief timeframe.During this period, the company's shares have grown from ₹2,533 apiece to the current market price of ₹5,061, resulting in a gain of 100%. Notably, the company finished 6 out of 7 months in positive territory, with December witnessing the largest monthly gain with a return of 22%.

Also Read: Suzlon Energy stock climbs 5% to attain level last seen in April 2011Zooming out, the company's shares have delivered a massive return of 617% from their October 2020 low of ₹705.90 apiece. After experiencing a significant rally without any substantial pullback, analysts remain cautious about the stock's short-term outlook but maintain a favorable view on the company's long-term growth prospects.In its latest note, domestic brokerage firm Sharekhan expects the company to benefit from India’s transition to green energy, citing its diverse offerings in the space and ongoing investments.

Future prospects in biomass, waste heat recovery (WHR), and water desalination also remain strong. Also Read: NMDC likely to benefit from rising pellet exports to China, says Incred EquitiesHowever, the brokerage notes that the company's current outstanding order book of ₹10,111 crore (1.1x TTM revenue) is soft, due to the absence of large orders.

Some sectors witnessed a slowdown in order book activity due to elections.The brokerage notes that the stock is trading at premium multiples of 76x/63x its FY25/26 EPS. Therefore, it has retained its 'Hold' rating, believing that long-term growth prospects are already priced into the