Fact is Praj Industry isn’t a bellwether consumer company or in anyway a proxy to consumer spending (like some chemical company). It is a capital goods company (sector: industrial biotechnology) and so completely dependent on industrial capex and government policy. Well managed companies in capital goods sector have performed similarly, e.g. Thermax. Regardless, through all those years of stagnant top-line Praj has maintained a decent dividend payout which may have given some solace to the long term investors in this company.
Following news might be relevant for Praj Industries.
The CAPEX requirement under new Ethanol policy is around Rs 100000 Lac crore. The buisness opportunity for Praj like companies in the Ethanol segment is in the range of Rs 20000 Cr. Praj is market leader with more then 50% share. Technologically Praj is number one in India with a very good R&D base. Praj can easily have buisness oppertunity in the range of Rs 10000 to 12000 Cr in the next 4years as against current run rate of Rs 1000 Cr per year i.e doubling of sales .
Apart from this they have developed technology for direct conversion of Sugar Syrup to Ethanol and their first plant is expected to be commissioned in next 2 months.
Apart from this there is also lot of thrust on CBG and other renewable energy in which the company is a reputed name
Technically also the Stock is trading at multi year high level (10 year high) and has crossed its resistance level of 150 to 155 on a day when there was blood bath in the market.
I think the stock will remain in uptrend for next 2 to 3 years.
Disclosure : Invested 10% of my portfolio at levels of 75
1.During the year, Company was granted 6 Indian patents and 41 foreign patents.The Company filed 131 international patents last year. In all, the Company has 74 patents granted to its name. 2. Praj bagged the Industrial Green Chemistry World (IGCW) Award for the environment-friendly furfural technology. 3. The enzymatic bio-diesel technology was expanded to use low-grade feedstocks like tallow and waste fatty acids. Praj bagged the first order for 50 TPD biodiesel plant from tallow in UP.
Ethanol availability & Requirement
1. Total Annual installed capacity of Ethanol and Alcohol in India is 693 Cr. Liters. 2. Total Annual Installed Capacity of Ethanol in India is 460 Cr. Liters( Grain Based – 75Cr. Liters, Molasses Based- 385 Cr. Liters. 3. In the next 5 years, the OMCs ethanol requirement will be approx. 2000-2400 Cr. Liters as per 10% Ethanol Blending at all India basis. 4. Praj developed lignosulphonate technology from the lignin generated from the 2G infinity plant . This can be bolted on the 2G plant to improve the overall viability of 2G ethanol plants. 5. Praj completed the DBT Biodiversity screening project in collaboration with D Y Patil University within timelines. 20,000 microbes were screened for 4 target molecules in 2 years.
Praj to set up India’s largest capacity sugarcane syrup based ethanol plant for Godavari Biorefineries:
: Praj Industries has bagged an order to set up India’s largest capacity
syrup based ethanol plant from a Godavari Biorefineries Ltd (GBL) in Karnataka. As a part
of this project, Praj will expand the existing ethanol manufacturing capacity to 600 KLPD,
using sugarcane syrup. When commissioned, this will become India’s largest capacity syrup based ethanol plant.
Godavari bio refineries belongs to the reputed Somaiya Group.
As per press release dated 16/12/2020 the Company had announced commissioning of its increased ethanol cpacity from 320 KLPD to 400 KLPD and now within 4 months the Company has announced another round of CAPEX from 400 KLPD to 600 KLPD i.e almost 50% capacity expansion in ethanol.
Laurus Labs mentions Praj Hipurity as collaborator for its bio-manufacturing plant. Pharma manufacturing in India can spurt demand for Pharma grade water and Praj is a major (listed)player in this area. Good to watch this space.
Renewable Chemicals and material is at a very nascent stage but a very long way to go… Praj has forayed into this sector through its BIOPRISM
portfolio…
Great set of results. Highest ever quarter in the company’s history. Years of research work finally seems to be paying off.
Lot is still desired in terms of their operating margins.
