Buy Praj Industries; target of Rs 97: Dynamic Levels

An improving trend visible over the last few years due to Internationalization of Brewery and Emerging Businesses, particularly HiPurity Systems and Environment Business of Water & Wastewater Treatment Systems; Harnessing the existing base of Ethanol/Alcohol Plants through modernization and retrofit solutions; Enhancing the wallet share of HiPurity Systems business and adding value added services across businesses for recurring revenue. Effort is on-going to maximize value through intake of better quality orders; following more stringent commercial and financial discipline; incorporate excellence in all aspects of project/services delivery to enhance customer value. Recently, Praj acquired 20% stake for INR 350mn in Praj HiPurity Systems and made it a wholly‐owned subsidiary.

 

We initiate coverage on Praj Industries Ltd as a BUY @82-83 with a target of Rs 97 representing a potential upside of 20% from the buy price Praj is trading at a PE of 27. We are positive on the company prospects as Praj expects to improve its order book and improve its EBITDA margins in the years to come. It also expects Internationalization of Brewery and Emerging Businesses, significant growth in MPS (model process business) in pharmaceutical and biotech and this is on the back of biosimilars. Also exports of Praj HiPurity business which is again focused on pharmaceuticals and biotech, is seeing growth potential. So, there are couple of businesses in which Praj expects growth in future. For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.