Target: ₹751
CMP: ₹579.50
We met 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.
Orders for the GenX facility are anticipated to begin in Q1FY26, while the facility is expected to contribute peak revenue of nearly ₹1,000–2,500 crore per annum. The CBG sector continues to face challenges due to concerns over operational and economic viability. However, Praj remains optimistic about its prospects, citing support from its multi-feedstock technology. A potential imposition of reciprocal tariffs by the US is not expected to have a material impact on Praj’s ultra-low carbon ethanol prospects.
Meanwhile, it continues to receive increasing enquiries for 1G ethanol from international markets, including Brazil, Argentina, and Panama. On the domestic front, ethanol blending reached 19.6 per cent in Jan 2025, and the management expects the next phase of order bookings to be driven by the anticipated mandate for 25 per cent ethanol blending.
We remain positive on Praj in the long run, given its leadership in domestic ethanol projects, with a 50-55 per cent market share; a healthy export outlook in engineering, driven by ETCA; a large pipeline of SAF projects in the US and domestic CBG initiatives; a focus on emerging technologies, including 2G ethanol and biopolymers; and improving margins owing to a growing share of exports and services.
