Praj Industries
BSE ID : 522205
NSE ID : PRAJIND
CMP: Rs.86.30
Praj Industries with its years of experience in the field of setting up plants for manufacture of ethanol and also carrying out R&D for finding solution to use non-edible crops for the same has an edge over its competitors. Strong balance sheet, good management pedigree and robust business outlook makes Praj an interesting player in the long run.
Praj Industries
Praj Industries Ltd. (Praj) is a global Indian company that offers innovative solutions to significantly add value to bioethanol, bio-diesel and brewery plants and related wastewater treatment systems for its customers. Praj is a knowledge based company with expertise and experience in bioprocesses and engineering, commanding >75% market share in India. It delivers know how, license, engineering design, plant & equipment, project management, commissioning, customer care and turnkey projects.
Investment Rationale:-
Global presence with leadership position in Indian market:
Praj has established its presence in leading biofuel markets across the globe. Praj enjoys >75% market share in India (being the only listed player in this space and other 2-3 players in non-listed space). With sound R&D set up, Praj has been able to penetrate new geographies like EU, USA and South Central America and South East Asia, having huge potential for ethanol. Praj, now enjoys >50% market share in Latin America (excl. Brazil) and South East Asia. Praj is well established in EU and many other countries.
Demand for blended petrol to boost Praj’s top line:
The increase in demand from current 650 mn. litres in FY07 to 1029 mn. litres by FY12P – CAGR growth of 10% at 5% blending, is likely to drive orders for capital goods pertaining to ethanol manufacturing. Praj would be a key beneficiary here as it offers complete value chain from consulting to plant set up & commissioning.
Order Book of Rs 800 crore:
Order Book stands at 0.9x FY11E sales. Praj’s order book as on Dec 31’ 2009 stands at Rs 800 crore executable over next 12-18 months. Of the total order book 60% is from domestic & balance 40% is from outside India.
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