Praj Industries share price spikes 7% after Q4 earnings; up over 800% in 4 years

For the quarter ending in March, Praj Industries reported a net profit of 92 crore, up from 88 crore in the same period last year. Income from operations for the quarter was 1,019 crore, compared to 1,004 crore in Q4 FY23 and 829 crore in Q3 FY24.

For the full fiscal year, income from operations stood at 3,466 crore, slightly down from 3,528 crore in FY23. The revenue distribution for FY24 was 74% from bioenergy, 18% from engineering, and 8% from Hi purity.

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On the bottom line, it posted a profit after tax (PAT) of 283 crore for FY24, an increase from 240 crore in FY23. As of March 31, 2024, Praj Industries had a consolidated order backlog of 3,528 crore, compared to an order backlog of 3,414 crore in FY23. The order intake for the March quarter was 924 crore.

The bioenergy sector forms the dominant share of the order book, accounting for 76% of the total, followed by the engineering sector, which accounts for 19%. The HPS segment constituted 5% share, according to the company’s Q4 investor presentation. 

The company’s bioenergy portfolio comprises technology solutions for conventional biofuels, including 1G low-carbon ethanol produced from sugary and starchy feedstock. It also encompasses advanced biofuels, such as 2G ultra-low carbon ethanol and renewable natural gas (RNG) or compressed biogas (CBG). 

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Additionally, the portfolio includes next-generation biofuels like Sustainable Aviation Fuel (SAF) and future biofuels such as biohydrogen.

The company is well-positioned to benefit from India’s Ethanol Blending Program (EBP), which aims to achieve a 20% blending rate by 2025–26, up from the current 10%. 

With a dominant share of over 50% in 1G ethanol and its unique status as the only player in 2G ethanol, the company is poised to capitalise on the rising demand for biofuels, including ethanol blending in diesel and flex-fuel engines.

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As India progresses towards its EBP 20 goals, the country will need approximately 17 billion liters of ethanol production capacity to meet the demand. 

Additionally, if the 20% blending target is sustained until 2030, the country would require 11,900 million liters of ethanol, with other industries such as chemicals, cosmetics, and alcohol generating an additional demand of 4,000 million liters. This scenario bodes well for the company’s growth prospects.

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Praj Industries is a small-cap stock with a market capitalisation of 9,703 crore. It offers a range of sustainable solutions for industries such as bioenergy, high-purity water, critical process equipment, breweries, and industrial wastewater treatment.

After reaching a record high of 650.50 per share in November last year, the stock experienced profit booking and remained under pressure in the subsequent months. Despite this, the shares have surged by 812% over the past four years.


Disclaimer: We advise investors to check with certified experts before taking any investment decisions.


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Published: 31 May 2024, 01:51 PM IST

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