Why is there change in the management? Is it because the terms for Mr. Joshi is complete? Any idea?
Yes, Shishir Sir has to retire as per the time line
I think once you see the old vehicle, scrapping policy and this this news side by side then you can see the better part of it.
Indian Government is pushing hard so that, these old vehicles can be scrapped properly and the owner gets the right worth of the car. then he buys a new car, which would be E30 enabled let’s say.
The issue is resolved
2 Likes
After the recent results, i want to take some views from the community about the company.
Everyone’s thought are welcome.
good part:
Their bioenergy revenue contribution now is 60% from previously 70% and high purity solution moved to 12%
Bad part:
- E20 blending target achieved faster, huge impact for praj as capacity remain underutilized
- GenX facility utilization is low, also coz of uncertain in US tarrifs
- Working capital is bit stressed now.
- Execution delays in current order book.
Other notes
- Mgmt still intact with vision 2030
- Q2 shud be subdued as well, only after q3 we can see some improvements.
Personal take:
Totally in headwind, Personally will revisit after q3
Disc: not invested, monitoring closely
4 Likes
India to blend Diesel with Isobutanol- benefits Praj
Praj has technology in collaboration with Gevo Inc to produce Isobutanol from sugarcane molasses and excess ethanol capacity can also be converted to Isobutanol.
After reaching 20% ethanol with petrol blend E-20 before schedule , India targets E-30 by 2030.
Ethanol blending with diesel failed , but Isobutanol blending with diesel is expected to be highly succesful
Still falling. Any reason for the fall apart from Slowdown on Green initiatives in US in Trump Presidency?
Disc: Invested. Small part of pf. Expecting long term growth with BioFuels, SAF etc.
Markets have a peculiar nature — they look ahead to the future. When the future appears promising and the probability of a business performing well seems high, markets factor that growth into the share price of the company. However, when the short-term outlook, or even the long-term prospects, become uncertain or difficult to judge, markets lose sight. In such times, there is no clear benchmark to anchor valuations, leading to drastic share price movements. Sometimes this mispricing becomes so severe that it creates an attractive buying opportunity. (This is a general statement and not company-specific.)
What is happening with the company?
I believe there are several factors at play:
- Domestic Order Book
The domestic order book constitutes 62% of the total order book, while exports make up 38%. Within the domestic order book, bioenergy accounts for 81%, primarily 1G ethanol. Currently, ethanol blending in petrol is at 20%, and the blending capacity stands at approximately 22–23%. Praj’s business is setting up ethanol plants.
In the past, as the country worked toward achieving 20% ethanol blending, demand spiked, leading to strong order flows and revenue growth. Now that this capacity has largely been established, the question is: what next? The replacement cycle for such projects runs over decades. This makes the concern less about growth and more about sustaining base revenue. Importantly, Praj is not in a consumables business. - Exports
Geopolitical tensions and U.S. tariffs under Trump have introduced unpredictability into the export segment, adding another layer of uncertainty. - Margin Drag — Praj GenX (as per Q1 FY2025–26 concall)
- “Profit mainly impacted by … GenX business expenses with no corresponding revenues, it has also affected the absorption of fixed cost.”
- “GenX facility is operational but not generating corresponding revenue, negatively impacting the company’s bottom line.”
- “The trickiest part of this ₹1,000 crore is that almost 70% are for the U.S. customers and 30% are for non-U.S. customers. Rather majority of them for U.S. customers, but the export is supposedly to happen to U.S. to the extent of 70%. 30% is supposedly to happen to the European region.”
- “What we had to see [is] how this current scenario towards the tariff and the uncertainty towards that, which is delaying the decision-making for my customers, how it is going to span out over a period of next couple of quarters. And that is what is going to decide to what extent out of this ₹1,000 crore is going to get materialized in the order booking for us.”
- Other Segments (CBG, SAF, etc.)
Segments like compressed biogas (CBG) and sustainable aviation fuel (SAF) appear promising, but at present, none of them are gaining momentum or translating into large orders. As a result, future growth visibility remains limited.
Triggers
- Any improvement in the above-mentioned factors could act as a positive trigger for the company.
- Any further deterioration in these areas could serve as a negative trigger.
This highlights why a margin of safety is essential: markets often assume everything will proceed smoothly, but disruptions like these reveal the risks.
Disclosure: I do not hold any position in the company. These are my personal thoughts and not a recommendation.
8 Likes
I think we need to be greedy when everybody else is fearful in this script. Seems like any stock showing negtaive growth or earnings is being punished.
At the same time companies like Trualt and Cian Agro are quite expensive and the same sectors like SAF and biogas are being praised as futuristic prospects for both of them. Their order intake even this quarter is more than their orders executed so future revenue visibility is there
2 Likes
Are we waiting for Q2 FY26 results to see if they are even more challenging, or if the company has turned the corner and has green shoots?
When will the results be decalred, any idea?
This quarter should be as bad if not worse. Management guided for improvement from Q3 and beyond. Lot of things are just not going their way but I have learnt to never sell a company with a great management team at the helm.
1 Like
Hi everyone,
I’m fairly new to the markets (about 2 years in), and Praj Industries has been one of my earliest and largest holdings. Over time it has grown into a substantial position in my portfolio.
I wanted to ask the experienced members here:
How do you view Praj at this stage?
Is it still a solid long-term compounder worth holding, or does it make sense to trim/exit given the current challenges and business outlook?
I’m trying to learn how to think about position sizing and long-term conviction, so any perspectives on the company’s fundamentals, risks, or future triggers would be really helpful.
Thanks in advance for your guidance.
2 Likes
As others too pointed out, the ethanol-blending mandate achieved the milestone hence much of the “growth-runway” the stock was riding is currently exhausted. New growth depends on further mandates (higher blending, SAF, CBG, exports) or diversification. This makes revenue streams uncertain for the near term
1 Like
Is this uncertainty not in price