Equity Research report -- Praj Industries Limited

Summary

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 (%):

Source: www.bseindia.com

Peer Comparison:

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:

1. Praj was conferred with the prestigious Fortune India THE NEXT 500 in the Engineeringsector. Fortune India Next 500 is a ranking of the top five hundred midsize corporations inIndia compiled based on the latest sales and gross revenue figures.This award is a recognition of the remarkable growth and outstanding performanceamong the most promising mid-sized companies in India.
   2. Praj was bestowed with prestigious Golden Peacock Award in theInnovative Product and Service category for our ground-breakingproduct BIOSYRUP®.
   3. BIOSYRUP® makes it possible to store sugarcane juice in form of syrupfor up to 12 months without any contamination or loss of sugar.
   4. Praj joined Mission Possible Partnership (MPP), International Alliance to Pursuit Net Zero Aviation. Praj has been working closely with MPP inhelping formulate an energy transition strategy aimed at cleaner skies.
   5. Praj has actively contributed to the formulation a landmark report, “Making Net-Zero Aviation possible: An industry-backed, 1.5°C alignedTransition Strategy.
   6. The report outlines the transition strategy for the aviation sector to achieve net-zero emissions by 2050. Praj, with its groundbreakingSustainable Aviation Fuel technology, is a significant contributor to the aforesaid report.
   Source: Company Latest Earning Presentation

Financial Snapshot:

Balance sheet : (Rs. in Crores)

Profit and Loss Account (Rs.in Crores):

Cash Flow Statement (Rs. in Crores):

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.