Praj Industries is seeing strong growth in its core segment Bio Energy in the domestic business, thanks to the overall demand-supply gap of ethanol, increased interest in grain based distilleries and decarbonization incentives, along with growth in other key verticals like CPS. giving good indications. , ZLD is gaining traction, highlights brokerage Axis Securities.
“Praj is a major beneficiary of the multiple tailwinds provided by the bio-economic revolution, which delivers strong growth and revenue visibility in the coming quarters,” the note said.
multibagger stock Has received a Buy rating from Axis Securities with a target price of 477 per share. Shares of Praj Industries have gained over 112% in the one-year period, while the stock has gained nearly 16% (Year-to-date or YTD) so far in 2022.
“Praj continues to see good traction in its grain-based distillery business, which is expected to increase allocation of additional grains for ethanol conversion by the government. This will help potential clients in 2 key issues, raw material supply assurance and price assurance with the rise in crude oil prices both improving the overall project viability for grain based projects,” Axis Securities said.
However, according to the brokerage, the major risks would be material cost pressures in steel, volatile RM weight on operating profitability in the near term and Russia-Ukraine crisis to ease trade in the euro area.
“With crude rising to an all-time high with global commodity prices rising due to the Russia-Ukraine war, such high crude oil prices effectively widen the ethanol-crude price gap which allows more ethanol in petrol.” Makes it economical and rational. This will create a tailwind from the increased demand for ethanol in terms of fixed contracts for distilleries and in turn attract investment in distilleries by other players which is good for Praj Industries.”
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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