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Prabhudas Lilladher's research report on Praj Industries

We revise our FY26/27E EPS estimates by -27.3%/-39.0% accounting for delayed order booking for GenX facility and slower execution of long duration engineering orders. The company reported a weak quarterly performance, with revenue declining by 15.6% YoY, while EBITDA margins contracted by 362bps YoY to 8.8%, primarily due to execution delays. Despite near-term headwinds, Praj’s growth prospects in BioEnergy remain robust driven by prospective mandates for ethanol blending in petrol to 25%-30% and blending in diesel, along with co-product development opportunities with existing ethanol plants. Innovations in the field of bio-bitumen production as byproduct of CBG and biopolymers will open up new avenues for growth in domestic bioenergy business. Meanwhile, Praj is seeing rising demand for starch-based ethanol plants, particularly from Latin America, is driving bioenergy exports. Praj’s GenX facility is now operational and expects to recognize revenue in H2FY26 driving growth for Engineering segment however order booking for GenX will remain key monitorable in H1FY26.

Outlook

The stock is trading at a P/E of 36.1x/27.1x on FY26/27E earnings. We roll forward to Mar’27 and maintain ‘Buy’ rating valuing the stock at a PE of 32x Mar’27E (33x Sep’26E earlier) with a revised TP of Rs 545 (Rs751 earlier).

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Praj Industries - 02052025 - prabhu

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