Multibagger stock: Over 1,000% return in 10 years! What's next for Praj Industries?

Shares of Praj Industries have delivered over 1,000 per cent return in the last 10 years. The multibagger stock is up over 270 per cent in the last 5 years. It is trading 24 per cent lower from its 52-week high of Rs 650.30, hit on November 30, 2023. However, it has recovered over 66 per cent from its 52-week low of Rs 299.

The company reported its earnings for the quarter ended December 2023. Praj's net profit rose 13 per cent to Rs 70 crore in Q3 FY24 as against Rs 62 crore during the previous quarter ended December 2022. Sales declined 9 per cent to Rs 828.62 crore as against Rs 911.47 crore during the previous quarter ended December 2022.

What's next?

According to Axis Securities, the transition towards cleaner forms of energy is the only sustainable way to grow and this will attract major global investments in the coming years. "The recent correction in stock prices leaves a healthy upside of over 28 per cent from the current market price and we therefore revise our 'Hold' rating to 'Buy'," it said.

The brokerage firm has revised the target price upwards to Rs 635 per share on account of the impact of improvement in margins as the company’s order book comprises higher margin profile orders and better commodity prices improve gross margins.

"Praj Industries is one of the best pure-play investments at carbon neutrality and sustainable environment. The global commitments and interest in the decarbonisation theme are only increasing with time. This bolsters our confidence in the company’s long-term growth prospects," it added.

Prabhudas Lilladher also remains positive on Praj in the long run given its leadership in domestic ethanol, large domestic CBG pipeline, focus on newer technologies like 2G ethanol, bio-manufacturing, SAF, multi feedstock plants, the healthy export outlook in engineering driven by ETCA, and improving margins owing to a growing share of services and exports.

It has revised its FY24/25/26 EPS estimates by -5.2/+2.1/+9.2 per cent factoring in lower execution this year followed by a strong pipeline of opportunities across segments going forward and upgraded the stock to ‘Buy’ rating from 'Accumulate' with a revised target price of Rs 647.

Prabhudas Lilladher believes that the restriction on the use of sugar syrup in ethanol production delayed execution this time around. However, it believes that this is likely a temporary phenomenon.

About Praj Industries

Praj Industries is engaged in the field of bio-based technologies and engineering. It is a supplier of ethanol plants and offers sustainable solutions for bioenergy, high-purity water, critical process equipment, breweries and industrial wastewater treatment.

(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)

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