PRAJIND - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.6

📊 Core Financials Analysis

Profitability

ROE: 18.2% and ROCE: 23.6% — strong return metrics, indicating efficient capital deployment.

EPS: ₹10.5 — decent earnings, though not high enough to justify current valuation.

PAT Qtr: ₹20 Cr vs ₹59 Cr — steep decline (-71.3%), signaling earnings volatility.

Balance Sheet & Cash Flow

Debt-to-equity: 0.03 — virtually debt-free, a major strength.

Dividend Yield: 1.53% — modest, adds income stability.

Cash flows are likely stable, but recent profit drop raises caution on sustainability.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 37.4 Fairly valued vs industry PE of 37.5

P/B Ratio ~5.1 Elevated, but supported by strong ROE

PEG Ratio 2.49 Overvalued relative to growth

Intrinsic Value ₹360–₹380 (est.) Current price slightly above fair value

🧠 Business Model & Competitive Edge

Company Profile: Praj Industries is a global leader in bioeconomy-driven engineering solutions, specializing in ethanol plants, wastewater treatment, and modular process systems.

Strengths

Deep expertise in clean energy and agri-processing.

Strong global presence with 1,000+ customer references across 100+ countries

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Strategic partnerships in biofuels and sustainable aviation fuel (SAF) projects

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Challenges

Earnings volatility due to project-based revenue.

High PEG ratio and recent profit decline suggest near-term caution.

📈 Technical & Sentiment Overview

RSI: 35.9 — oversold zone, potential for rebound.

MACD: -12.8 — bearish momentum, trend weakness.

DMA 50 & 200: Price below both — confirms downtrend.

Volume: Slightly below average — cooling investor interest.

FII/DII Holding: Both declined — institutional sentiment cautious.

💡 Entry Zone & Long-Term Guidance

Suggested Entry Range: ₹360–₹380 — near intrinsic value and technical support.

Holding Strategy

Suitable for long-term investors bullish on clean energy and biofuels.

Price targets for FY27 range from ₹480 to ₹620 based on projected earnings.

Monitor execution of global biorefinery projects and SAF mandates

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Praj Industries is a niche sustainability play with strong fundamentals and global relevance, but current valuation and earnings softness suggest a staggered accumulation approach. Let me know if you'd like to compare it with Thermax or VA Tech Wabag.

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www.praj.net

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stockanalysis.com

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