Buy Praj Industries, target price Rs 495: Prabhudas Lilladher

Prabhudas Lilladher has buy call on Praj Industries with a target price of Rs 495. The current market price of Praj Industries is Rs 366.5.

Praj Industries, incorporated in the year 1985, is a Small Cap company (having a market cap of Rs 6705.76 Crore) operating in Engineering sector.

Praj Industries key Products/Revenue Segments include Scrap and Sale of services for the year ending 31-Mar-2022.


Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 917.73 Crore, up 3.96 % from last quarter Total Income of Rs 882.74 Crore and up 55.38 % from last year same quarter Total Income of Rs 590.63 Crore. Company has reported net profit after tax of Rs 62.31 Crore in latest quarter.

The company’s top management includes Dr.Pramod Chaudhari, Mr.Shishir Joshipura, Mr.Sachin Raole, Mr.Berjis Desai, Mr.Sivaramakrishnan S Iyer, Ms.Parimal Chaudhari, Dr.Shridhar Shukla, Mr.Suhas Baxi, Ms.Mrunalini Joshi. Company has P G Bhagwat as its auditors. As on 31-12-2022, the company has a total of 18 Crore shares outstanding.

Investment Rationale
The brokerage believe PRJ is well poised to benefit from upcoming opportunities given 1) its strong leadership in domestic ethanol plants (~50% market share), 2) global presence and 3) focus on future-ready technologies like 2G plants, Compressed Bio Gas (CBG) etc. We roll forward to FY25E and maintain ‘BUY’ rating at revised TP of Rs495 (Rs520 earlier) valuing 28x FY25E EPS.

Promoter/FII Holdings
Promoters held 32.87 per cent stake in the company as of 31-Dec-2022, while FIIs owned 17.61 per cent, DIIs 7.69 per cent.