Buzzing stock “Praj Industries”

Praj Industries is one of the established names in the ethanol and brewery business with strong credentials in India and abroad. Praj has leadership position in ethanol and brewery space. Praj Industries, a process solution specialist, has extended its expertise in chemistry and processes into new areas like waste water treatment, high purity water, critical process equipments and bioproducts. Praj's name is getting accepted in these emerging segments and the plan is to scale up further domestically and internationally. The company is optimistic and is receiving good level of enquiries.

Praj Industries has been outperforming markets for past few trading sessions. Praj Industries has suffered few years of stagnation as its ethanol plant business faced headwinds and emerging business was still nascent. With improving industrial out- look, the company may post reasonable growth in the medium term. Strong balance sheet, cash surplus, high dividend payouts are pluses not to be ignored.

The quarterly results were good as it reported a healthy 76 per cent increase in its net profits from Rs 20.78 crore in corresponding year to Rs 36.61 crore for the quarter ended 31st March 2015. Total income during the quarter under review decreased to Rs 306.19 crore from Rs 349.43 crore in the same quarter of 2013-14 fiscal.

Several key developments were communicated by the management, 

• Company breaks Rs 1000 cr mark in terms of order inflow, 25 per cent increase in order book over FY 14 
• Company has shown improvement in the margins over FY 14 on account of transformation drive & good quality orders 
• EBITDA is up by 17 per cent over FY 14. Profit before tax is up by 12 per cent over FY14, Profit after tax is up by 40 per cent over FY 14
• Boards of directors have recommended a dividend of Rs. 1.62 per share (subject to shareholder's approval)
• Order intake for emerging business doubles, on a higher quantum of order booking. Rs 235 crore order win for Petrobras project CPES business moving up the value chain
• Wins an order on EPC basis from Kakira Sugar fuel cum beverage ethanol plant in Uganda. 
• Enters into strategic understanding with Gevo for isobutanol opportunities access to additional 2nd gen technology. 
• Successful commissioning of SAB Miller, Namibia brewery. Heineken, Myanmar brewery to follow soon.

Based on balanced growth across all business segments and geographies the stock can be looked at for long term investing purpose.