Praj is a biotechnology Company with global footprints having a diverse portfolio of Bio-energy solutions, High purity water systems, Breweries, Critical process equipment & skids and Zero liquid discharge systems
Company has a Bio-MobilityTM platform which comprises of Biofuels both in liquid as well as gaseous form and are derived by processing feedstock such as Agri residue, Molasses, Cane syrup, grains, oilseeds, etc
• Bio-MobilityTM facilitates energy self-reliance as it reduces dependency on the imported crude and associated forex bill. Biological feedstock being renewable in nature
• It triggers carbon-neutral cycles and thus helps preserve the environment by reducing GHG emissions
• It triggers carbon-neutral cycles and thus helps preserve the environment by reducing GHG emissions
Praj HiPurity systems offer water systems (WS), modular process systems (MPS) as well as value-added services (VAS) to customers in biopharma, sterile formulations, topical & orals, cosmetics & personal care, and the nutraceutical industry
Company operates in a niche segment and has a dominant market share in the category the company operates
•2/3rd market share in bioenergy project setup and installation business
•60% market share in brewery setup and installation
•Growing HiPurity segment along with the growth
•2/3rd market share in bioenergy project setup and installation business
•60% market share in brewery setup and installation
•Growing HiPurity segment along with the growth
Following are the ethanol industry tailwinds:
Feedstock availability will lead to an increase in the capacity of the plant from an average of 50,000 Liters to an average plant size of 150,000 liters
Feedstock availability will lead to an increase in the capacity of the plant from an average of 50,000 Liters to an average plant size of 150,000 liters
The opportunity:
The management has indicated the opportunity size of ethanol production for Praj will be close to Rs 14,000 Cr
The company is not all about ethanol really
The management has indicated the opportunity size of ethanol production for Praj will be close to Rs 14,000 Cr
The company is not all about ethanol really
The company recently bagged an order worth Rs. 226.9 Cr from Indian Oil Corporation Limited for execution of water and wastewater treatment system including zero liquid discharge system showing scope for growth in other business segments as well apart from bioenergy
Praj HiPurity systems (PHS) made important progress in the complex injectables, a niche low volume high-cost product segment, which is gaining traction across the globe
•The partnership with Aquanova, of Sweden especially to cater all important injectables and vaccine industry..
•The partnership with Aquanova, of Sweden especially to cater all important injectables and vaccine industry..
..shows tech advancement
The drugs going off-patent in the coming 2-3 years have a very high proportion of biologicals which include fermentation-based processes
PHS continues to focus on this opportunity by offering solutions for greener fermentation-based manufacturing process
The drugs going off-patent in the coming 2-3 years have a very high proportion of biologicals which include fermentation-based processes
PHS continues to focus on this opportunity by offering solutions for greener fermentation-based manufacturing process
The Praj edge:
Praj is seen as a premier ethanol machine manufacturing company as the company have developed ethanol production plants in developed countries with a good yield which have already been commissioned
Praj is seen as a premier ethanol machine manufacturing company as the company have developed ethanol production plants in developed countries with a good yield which have already been commissioned
The company has developed grain-based ethanol plants in developed countries such as the UK and North American countries. Hence, Praj has the knowledge and experience for which it has a first-mover advantage in India, where no competitor has such technology
The company has a technology of converting sugarcane syrup to bio-syrup which can be stored for a full year as compared to sugarcane syrup which has a life of 120-150 days
• This will lead to year-round ethanol production
• This will lead to year-round ethanol production
The company recently bagged an order to set up India’s largest capacity syrup-based ethanol plant from a Godavari Biorefineries Ltd (GBL) in Karnataka which will expand the ethanol manufacturing capacity to 600 KLPD
Biogas opportunity for Praj is also very huge as the government wants to increase the share of biofuel it has set an ambitious target of 5000 gas plants over 5 year period
• The company’s technology provides a 30% higher yield as compared to any other player
• The company’s technology provides a 30% higher yield as compared to any other player
Financial highlights:
Revenue grew at a CAGR of 6% from Rs 9,150 Mn in FY17 to Rs 11,024 Mn in FY20
• Export share increased from 25% in FY17 to 34% in FY20
• Share of bioenergy segment increased from 56% in FY17 to 61% in FY20
Revenue grew at a CAGR of 6% from Rs 9,150 Mn in FY17 to Rs 11,024 Mn in FY20
• Export share increased from 25% in FY17 to 34% in FY20
• Share of bioenergy segment increased from 56% in FY17 to 61% in FY20
Praj segment revenue contribution for 9M FY21:
Order backlog at the end of Q3 FY21 stood at Rs 16,650 Mn
EBITDA margin of the company has been stable around 7%-7.5% from FY17 to FY20 which are expected to increase substantially
• EBITDA margin for Q3 FY21 stood at 11.4%
• EBITDA margin for 9M FY21 are at a lower range of 6% as the company was not operating for majority of Q1 FY21
• EBITDA margin for Q3 FY21 stood at 11.4%
• EBITDA margin for 9M FY21 are at a lower range of 6% as the company was not operating for majority of Q1 FY21
Revenue for 9M FY21 stood at Rs 7,376 Mn which reduced by 8.5% YoY as compared to Rs 8.061 Mn in 9M FY20
•The revenue for Q1 FY21 was low at Rs 1,296 Mn as compared to Rs 2,116 in Q1 FY20 due to pandemic
•The revenue for Q3 FY21 stood at Rs 3,478 Mn which increased by 16% YoY
•The revenue for Q1 FY21 was low at Rs 1,296 Mn as compared to Rs 2,116 in Q1 FY20 due to pandemic
•The revenue for Q3 FY21 stood at Rs 3,478 Mn which increased by 16% YoY
Operating leverage will lead to higher margins in FY22 as costs have been stabilized
• The management has indicated no additional capital expenditure will be required for the next 12-18 months despite higher anticipated revenue
• The company generated EBITDA margin of 11.4%..
• The management has indicated no additional capital expenditure will be required for the next 12-18 months despite higher anticipated revenue
• The company generated EBITDA margin of 11.4%..
..for Q3 FY21 as compared to 8.3% for Q3 FY20
•The revenue increased by 16% YoY which led to increase in margins showing a play in operating leverage
•Cash in hand for the company stood at Rs 4,000 Mn at end of Q3 FY21
•The revenue increased by 16% YoY which led to increase in margins showing a play in operating leverage
•Cash in hand for the company stood at Rs 4,000 Mn at end of Q3 FY21
Valuation:
The company is trading at a premium valuation of PE at 52x for FY21, the valuation is high due
to lower earnings in H1 FY21 while the company’s growth has rebounded in Q3 and the
momentum is expected to continue for coming quarters
The company is trading at a premium valuation of PE at 52x for FY21, the valuation is high due
to lower earnings in H1 FY21 while the company’s growth has rebounded in Q3 and the
momentum is expected to continue for coming quarters
The company had a lean H1 led by the pandemic impact due to which the overall FY21
numbers are tepid despite a rebound in Q3 FY21, which is expected to continue in Q4
numbers are tepid despite a rebound in Q3 FY21, which is expected to continue in Q4
The EBITDA margins of the company are expected to increase due to operating leverage
as the company has already incurred the required expenditure for future growth
as the company has already incurred the required expenditure for future growth
The valuations of the company are at a premium but given the industry tailwinds, market share
and technical knowhow of Praj the company is expected to grow substantially over the years
and technical knowhow of Praj the company is expected to grow substantially over the years
Great Q4 by Praj
Amazing cash flows generated by the company.
It is only the beginning, huge runway ahead !
Amazing cash flows generated by the company.
It is only the beginning, huge runway ahead !
Praj is not stopping !
Praj's bio-bitumen samples have been approved by Netherlands based CBBD and have asked large sample size for construction of a road.
#BioEconomy
Praj's bio-bitumen samples have been approved by Netherlands based CBBD and have asked large sample size for construction of a road.
#BioEconomy
The CBG opportunity is big for Praj.
CBG can replace CNG in 1:1 ratio, the infrastructure is already present, the adoption is taking place currently.
CBG is 10% more efficient than CNG.
People have to start focusing on bio-fuel as a real game changer.
Get over EVs
CBG can replace CNG in 1:1 ratio, the infrastructure is already present, the adoption is taking place currently.
CBG is 10% more efficient than CNG.
People have to start focusing on bio-fuel as a real game changer.
Get over EVs
Another trigger for Praj.
https://twitter.com/fooddeptgoi/status/1399661278637953024?s=19
Ethanol ethanol ethanol !!!
https://twitter.com/PTI_News/status/1400120534369652743?s=19
Proprietary tech of Praj 🙌
https://twitter.com/punitbansal14/status/1400423175381475334?s=19
Structural growth on ethanol blending not a narrative anymore !
https://twitter.com/PetroleumMin/status/1400766635275816962?s=19
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