Buy Praj Industries Ltd For Target Rs. 608 - Geojit Financial Services Ltd
Fundamental View
Praj Industries Ltd. is a leading biotechnology and engineering firm offering sustainable solutions in bioenergy, water & wastewater treatment, brewery technologies, and high-purity systems for the pharma and biotech sectors. With a global presence in over 100 countries, and four manufacturing facilities, Praj has also formed strategic alliances— with thyssenkrupp Uhde for polylactic acid production (Bioplastic) and BPCL for Compressed Bio Gas (CBG) plants—to advance green energy initiatives
* In FY25, Praj’s revenue declined 6.9% YoY to Rs.3,228cr, with PAT dropping 23% due to execution delays and higher costs at the GenX facility, impacting margins (9.8% in FY25 / 10.7% in FY24).
* As of March 2025, Praj’s order backlog stands at Rs.4,293cr, with 77% attributed to bioenergy, 18% to engineering, and 5% to high-purity and sterile process solutions. Approx. 63% of these backlogs are domestic, and this strong pipeline is expected to drive revenue growth in the near term.
* The ?4 billion Mangalore GenX facility is now fully operational and is expected to drive volume growth from H2FY26 by resolving previous execution bottlenecks.
* Exports made up ~24% of Praj’s revenue in FY25. The company aims to increase this to 50% by 2030, driven by growing global demand for sustainable technologies. .
* With India achieving 20% ethanol blending, Praj is poised to benefit from future targets like 30% by FY30, leveraging its leadership in multi-feed ethanol technologies.
* Praj Industries experienced strong growth after FY21, supported by ethanol blending initiatives and effective execution. However, macroeconomic and policy challenges in FY24–25 slowed the bioenergy sector and postponed global investments. Despite this, Praj remains well-positioned for future growth, backed by a robust order book, strategic alliances, and its expansion into advanced biofuels and bioplastics. The stock is currently valued at 36x its 1Y forward P/E.
Technical View.
* The stock is in the process of forming a price base following a sharp correction of approximately 48% from its recent all-time high of 874, recorded in January 2025.
* Currently, it is hovering near the 50-day moving average on the daily chart, with signs of gradual improvement in momentum.
* Momentum indicators are also showing encouraging signs, with the RSI trending higher on the daily chart and the MACD positioned above the central line, indicating a strengthening underlying trend.
For More Geojit Financial Services Ltd Disclaimer https://www.geojit.com/disclaimer
SEBI Registration Number: INH200000345
