Praj Industries Limited : Post-result announcements from the majority of the companies listed on the indices, various Brokerages came up with target prices discounting a lot of fundamental and other important factors.
Listed below is one stock associated with the ‘Ethanol’ industry that one should add to their watchlist for a potential upside of more than 20 percent:
Praj Industries Limited
With a market capitalization of Rs 9,343.22 crores, the stocks of Praj Industries Limited started their trading session on Tuesday at Rs 473.10 and closed at Rs 508.30, gaining a whopping 7.50 percent compared to the previous closing levels of Rs 473.20 apiece.
Axis Securities gave a ‘Buy’ recommendation on the company’s stock with a target price of Rs 635, indicating an increase of approximately 25 percent as compared to the prevailing stock price level.
The investment rationale for providing such a recommendation pertains to factors such as mandatory CBG blending with CNG, focus on the ‘Bio-Plastics’ segment, and growth across other segments of the company.
Having a glance at the financials of the company, the basic indicators of business, viz, operating revenues as well as net profits, have shown movements in opposing directions.
The former, on one end, reduced from Rs 882 crores during Q2FY23-24 to Rs 828 crores during Q3FY23-24, and the latter, on the other end, rose from Rs 62 crores to Rs 70 crores as a result of effective cost management.
Coming onto the ratio analysis, the company has been successful in increasing its margins with the net profit margin (NPM) reported at 6.79 percent, an increase from 6.43 percent of NPM same period last year.
Moreover, the company’s return ratios such as return on equity (RoE) and return on capital employed (RoCE) rose during the recent financial periods with the former taking a shift from 16.40 percent during FY21-22 to 22.24 percent during FY22-23, and the latter, during the same period, rising from 21.87 percent to 28.91 percent.
As per the shareholding data available for the December 2023 quarter, the company’s Promoters hold a 32.81 percent stake, and the Foreign Institutional Investors (FIIs) hold a considerable stake of 17.37 percent in the company.
Praj Industries Limited is an India-based engineering company that operates in a single segment, viz, ‘process & project engineering’. Its business line consists of High Purity
Solutions, BioEnergy, Brewery Plants, Wastewater Treatment, Bioproducts, Critical Process Equipment & Systems, and many more.
Praj Industries is considered to be a market leader in ‘Bio-fuel’ technology with a market share of around 60 to 65 percent in the domestic ethanol market. The company has a diversified portfolio that includes equipment for wastewater treatment, breweries, and high-purity water, solidifying its position as a comprehensive bio-engineering firm.
