Praj Industries Ltd
Construction & Engineering
The company is growing now.
Venture Capitalist Vinod Khosla who has a 10% stake.
Market Cap.: ₹ 1,500.28 Cr.
Current Price: ₹ 83.90 ( Costly can buy on huge correction)
Book Value: ₹ 37.41
Stock P/E: 20.53
Dividend Yield: 1.92%
Face Value: ₹ 2.00
Company is virtually debt free.
The company has delivered a poor growth of 8.31% over past five years.
Expected to have good result this year sale then
profit avg : 70
no significant growth till now
ttm is 37% otherwise just 3%
If 20% growth then make sense for this price
Emerging business so less growth till date is okay for me. The price is not cheap right now is what I think. Otherwise outlook is nice for the company. Management is good looks like.
The company deals with segments like Alcohol / Fuel Ethanol and Brewery Plants, Sugar Industry, Water and Wastewater Treatment Plants, Critical Process Equipment System, High Purity Systems, BioProducts (Livestock Health and Nutrition Products), and Customised Research Service & Solutions.
For FY 15, company breached the order book position of 1000 crores. Out of this ethanol stands at 60%, Brewery 7%, and Emerging business 33%. Domestic orderbook comprises 58% whereas export order book comprises
Praj Hipurity Systems expected to benefit in a major way because of strong growth in biosimilars. This division has recently won many breakthrough orders from multiple international markets namely Algeria, Turkey, Myanmar.
Company has debt free balance sheet with cash of nearly 250 crores not much.
For 9M fy 16, revenues were 705 crores against 685 crores in 9M fy 15.
Net profit for 9M FY 16 was at 35.44 crores against 39.65 crores for 9M FY 15.
Great position at this time in make in india
Praj has market share of 65% in domestic and 30% in International ethanol. Company has identified following avenues for growth. Main customers are ethanol producers and breweries.
Like ethanol company intends to take breweries biz overseas. As of now it caters to domestic players. Recently it has received orders from large beer companies like SAB Miller and Heineken.
Launching second generation ethanol process. Company is putting up a demo plant. This plant would demonstrate second generation ethanol making process which would produce ethanol from cellulose instead of starch or molasses.
Exploring bio Products such as a) Live stock health and nutrients (Pro biotic market size in South east asia for this is 10000 crores). b) Human Health and wellness products like Omega 3 and Vitamin E and c) Industrial Biochemicals like Xylltol and furfural.
Company also expects to monetise its R&D over next 6-9 quarters.
Since past two years company has embarked on a transformation of its business model.
Company has focussed more on emerging businesses namely
Critical Process Equipment business mainly deals with Oil Skids catering to oil companies.
Industrial water and waste water management
India , thailand , uae , tanzania,
how much in research ?
Environment ethanol drives vehicles ethanol made of bio material when oil is costly not right now but in future
okay shareholder letter just above average management in capability Innovation and research patent of praj ?
waste to ethanol
water and wastewater treatment
bio products, increase pharma sector
~20 patents : Not much right? for this big company?..
integrated bio energy indian govt .. so good for a year or two
Final Verdict: Looks costly stock
I am very new to value investing and this is me taking random notes just for myself. Please don’t base any of your decision on these write-ups. That will be foolish.