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Equity Research report -- Praj Industries Limited
4 decades of leadership in Industrial Bio-technology Space
Company Overview:
• Incorporated in 1983 under the visionary leadership of technocrat
Dr. Pramod Chaudhury.
• Praj Industries Ltd. (Praj) has grown to become one of the most reputed
and technologically advanced biotechnology and engineering companies
in the world.
• Offering a bouquet of sustainable solutions for bioenergy, high purity
water, critical process equipment, breweries and industrial wastewater
treatment
• Focused on the environment, energy and farm-to-fuel technology
solutions, with 1000++ customer references in 100+ countries across 5
continents and still counting.
• Team of 90+ technologists, 300+ patents filings, and 24 Indian and 60
international patents being granted.
• Known for its TEMPO (Technology, Engineering, Manufacturing, Project
management, and Operations & Maintenance) capabilities.
• The manufacturing capabilities are substantiated by four world class
manufacturing facilities located in Maharashtra and Gujarat, which are
near ports and supported by a multi-disciplinary engineering team.
• Global Offices located in Thailand and Philippines in South East Asia and in
Houston, Texas, USA.
Key Statistics:
Market Cap: Rs.7413 Cr.
Current Price: Rs. 403.6/-
52W High : Rs.448/-
Stock P/E :43.8
Book Value: Rs. 51.9/-
Dividend Yield: 1.04%
P/B : 7.8
Face Value: Rs. 2/-
52W Low : Rs. 289.1/-
Source: www.sharescart.com
Returns (%):
| Particular | 3Months | 6Months | 12Months |
| Praj | 6% | 20.80% | 17.80% |
| Sensex | 3.43% | 9.64% | 21.70% |
Source: www.bseindia.com
Peer Comparison:
| # | Company | CMP | M Cap | 52W High | 52W Low | PE | PB | ROCE Last Yr | ROE Last Yr | PAT TTM | Div Yield |
| 1 | Bharat Electronics Ltd. | 111 | 81139 | 277.6 | 61.2 | 29.6 | 6.6 | 27.2 | 20.2 | 2698 | 2.1 |
| 2 | Thermax Ltd. | 2561.1 | 30438 | 2607 | 1302 | 87.7 | 8.3 | 11.7 | 9.3 | 329 | 0.5 |
| 3 | AIA Engineering Ltd. | 2506.7 | 23563 | 2686.2 | 1476 | 35.8 | 5 | 17.2 | 13.8 | 662 | 0.6 |
| 4 | Bharat Heavy Electricals Ltd. | 59.4 | 20683 | 80.4 | 41.4 | 29.3 | 0.8 | 3 | 1.7 | 649 | 0.8 |
| 5 | GMM Pfaudler Ltd. | 1861.9 | 8165 | 2110 | 1251 | 64.2 | 15.5 | 16.4 | 16.2 | 155 | 0.1 |
| 6 | Praj Industries Ltd. | 403.6 | 7413 | 448 | 289 | 43.8 | 8.1 | 24.1 | 17.5 | 169 | 1.1 |
| 7 | Triveni Turbine Ltd. | 222.9 | 7179 | 242.8 | 131 | 25.7 | 8.4 | 49.7 | 36.7 | 285 | 1.3 |
| 8 | KSB Ltd. | 1886.1 | 6602 | 2097.8 | 960 | 39.5 | 6.5 | 20.4 | 15 | 159 | 1 |
| 9 | BEML Ltd. | 1549 | 6410 | 2085 | 1106.4 | 46 | 2.7 | 8.9 | 5.6 | 140 | 0.6 |
Source: www.sharescart.com
Shareholding Pattern(%):
Source: www.sharescart.com
Q1-23 Revenue Break By Segments:
Source: Company Earning Presentation
Q1-23 Revenue Break By Geographics(%):
Source: Company Earning Presentation
Growth Drivers:
Financial Snapshot:
Balance sheet : (Rs. in Crores)
| Mar-18 | Mar-19 | Mar-20 | Mar-21 | Mar-22 | |
| Shareholder's Funds | 726 | 745 | 719 | 802 | 916 |
| Minority's Interest | 1 | 1 | 1 | 1 | 1 |
| Total current Liabilities | 391 | 485 | 409 | 764 | 1265 |
| Borrowings | 0 | 0 | 0 | 0 | 0 |
| Other Liabilities & Provisions | 12 | 7 | 14 | 17 | 30 |
| Total Liabilities | 1129 | 1238 | 1144 | 1583 | 2211 |
| Fixed Assets | 283 | 276 | 280 | 270 | 272 |
| Total Current Assets | 790 | 861 | 780 | 1235 | 1841 |
| Non Other Current Assets | 56 | 101 | 84 | 78 | 98 |
| Total Assets | 1129 | 1238 | 1144 | 1583 | 2211 |
Profit and Loss Account (Rs.in Crores):
| Mar-18 | Mar-19 | Mar-20 | Mar-21 | Mar-22 | |
| Net Sales | 964 | 1076 | 1106 | 1313 | 2213 |
| Other Income | 30 | 32 | 30 | 26 | 36 |
| Total Income | 994 | 1109 | 1136 | 1338 | 2249 |
| Total Expenditure | 916 | 997 | 1028 | 1200 | 2019 |
| Operating Profit | 78 | 112 | 108 | 138 | 230 |
| Interest | 1 | 1 | 3 | 3 | 3 |
| Depreciation | 24 | 23 | 22 | 22 | 23 |
| Exceptional Income/Expenses | 0 | 0 | 0 | 0 | 0 |
| Profit Before Tax | 53 | 88 | 83 | 113 | 205 |
| Provision for Tax | 14 | 20 | 13 | 32 | 55 |
| Profit After Tax | 39 | 68 | 70 | 81 | 150 |
| Adjustments | 0 | 0 | 0 | 0 | 0 |
| Profit After Adjustments | 39 | 68 | 70 | 81 | 150 |
| Adjusted Earnings Per Share | 2.2 | 3.7 | 3.8 | 4.4 | 8.2 |
Cash Flow Statement (Rs. in Crores):
| Mar-18 | Mar-19 | Mar-20 | Mar-21 | Mar-22 | |
| Opening Cash & Cash Equivalents | 69 | 77 | 64 | 46 | 101 |
| Cash Flow from Operating Activities | 101 | 33 | 15 | 225 | 175 |
| Cash Flow from Investing Activities | -71 | -6 | 62 | -164 | -127 |
| Cash Flow from Financing Activities | -25 | -43 | -98 | -6 | -44 |
| Net Cash Inflow / Outflow | 6 | -16 | -21 | 54 | 4 |
| Closing Cash & Cash Equivalent | 77 | 64 | 46 | 101 | 107 |
Source: www.sharescart.com
Conclusion:
On the basis of Discount Cash Flow Valuation Method, we
are recommending ‘Buy’ for the stock. Since the stock
offers good opportunity, we initiate a ‘BUY’ signal on the
stock with 12-month price target of Rs 450/- share an
upside of 12.00 % from current levels.
I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Stocx Research Club). I have no business relationship with any company whose stock is mentioned in this article.
I am not a SEBI Registered individual/entity and the above research article is only for educational purpose and is never intended as trading/investment advice.
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