Buy Praj Industries ; target of Rs 751: Prabhudas Lilladher

Prabhudas Lilladher's research report on Praj Industries

We met with the management of Praj Industries at a conference, where they provided insights into the progress of Praj’s GenX facility and the growth prospects across its business verticals. The orders for the GenX facility are anticipated from Q1FY26 while the facility is expected to contribute peak revenue of ~Rs10-25bn per annum. Challenges persist in the CBG sector due to concerns over operational and economic viability. However, Praj remains confident in its prospects, supported by its multi-feedstock technology. The potential imposition of reciprocal tariffs by the U.S. is not expected to have a material impact on Praj’s ultra-low carbon ethanol prospects. Meanwhile, it continues to receive increasing inquiries for 1G ethanol from international markets, including Brazil, Argentina, and Panama. On the domestic front, ethanol blending reached ~19.6% in Jan’25 and the management expects next phase of order booking to be driven by prospective mandate for 25% ethanol blending.

Outlook

The stock is trading at a P/E of 32.7x/20.6x on FY26/27E earnings. We maintain ‘Buy’ rating with a TP of Rs751 (same as earlier), valuing the stock at a P/E of 33x Sep’26E (same as earlier).

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