ICICIdirect.com's report on Praj Industries
"Praj Industries posted a disappointing set of numbers with ~25 percent YoY decline in topline due to a delay in execution of large projects. Simultaneously, the company posted a loss at an operating level due to lower sales and high fixed cost. Despite the order book witnessing an increase of 15 percent YoY to Rs 1010 crore (incremental orders of Rs 252 crore) execution delays continue to haunt the revenues of the company. Net profit has also seen 75 percent YoY drop despite higher other income of Rs 9.9 crore during the quarter. We believe Praj is struggling to execute large orders, which has consequently resulted in delays of revenue recognition. We believe lower execution along with new orders from low margin waste water management would keep margins lower at 2.6 percent in FY14E. We remain cautious on the business environment and revise our target price to Rs 35."
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