Hold Praj Industries; target of Rs 393: Prabhudas Lilladher

hold

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

We revise our FY26/27E EPS estimates by -37.8%/-20.6% and downgrade the stock from ‘Buy’ to ‘Hold’ amid delayed order booking and execution due to tariff related uncertainties and liquidity challenges in domestic market. The company delivered a weak quarterly performance, with revenue declining 8.4% YoY and EBITDA margin contracting 685bps YoY to 5.6%, primarily due to execution delays. Tariff-related uncertainties affected order finalization, while funding constraints among customers halted dispatches in the domestic market straining working capital of the company and elongating the execution cycle. India’s achievement of the EBP20 target, coupled with uncertainty over the timeline for the new EBP mandate, is expected to limit near-term greenfield opportunities for Praj. Meanwhile, the company is exploring alternative uses and geographies for its GenX facility amid the uncertainty over tariff implications. Despite these near-term headwinds, Praj’s diversification into CBG, Bio Bitumen, biopolymers, and SAF is gaining traction, providing new avenues for growth.

The stock is trading at a P/E of 52.1x/30.6x on FY26/27E earnings. We value the stock at a PE of 29x Mar’27E (32x Mar’27E earlier) with a revised TP of Rs393 (Rs545 earlier).

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.