Praj gains 6%, hits new high on healthy outlook; zooms 95% from 52-week low

Since November 21, Praj's share price has rallied 28% after the company said it is eying opportunities in multiple sectors including SAF, biopolymers and the energy transition & climate actions (ECTA)

Shares of Praj Industries hit a new high of Rs 874.3, as they rallied 6 per cent on the BSE in Wednesday’s intra-day trade on a healthy business outlook. The stock price of the industrial biotech company has surpassed its previous high of Rs 853.30 that it touched on December 2, 2024. It has zoomed 95 per cent from its 52-week low of Rs 448 hit on March 15.

 

The company expects growth momentum to resume from H2 (largely led by starchy feedstock), as 3.5 billion litres incremental ethanol demand is expected to achieve the government’s 25 per cent blending target. Moreover, commissioning of the new GenX facility in Mangalore is ramping up gradually, and the company expects a ramp-up in inflows from H2.

 

 

Since November 21, the market price of Praj has gained 28 per cent after the company said it is eying opportunities in multiple sectors including sustainable aviation fuel (SAF), biopolymers and the energy transition & climate actions (ETCA); the company expects to triple its revenues by 2030.

 

The current revenues of Praj are close to Rs 3,400 crore annually, and the company has a goal to reach Rs 10,000 crore by the year 2030. Currently, its share of exports is around 29 per cent, while going forward, the company is looking at increasing it to 50 per cent by 2030.

 

Analysts remain positive regarding the development of the green energy ecosystem, and expect Praj to be a key beneficiary.

 

The ETCA sector, which has a global potential and contains segments like blue and green hydrogen, green ammonia and waste-to-energy solutions, is expected to drive the growth. 

 

Globally, energy majors are likely to invest close to Rs 25 trillion in the clean energy sector by 2030, whereas the traditional oil and gas market will continue to attract new investments to the tune of Rs 21 trillion in the next 10 years' time on the global front. This will lead to the significant demand for modularisation solutions for setting up plants in the above-mentioned sectors. 

 

To cater to this demand, Praj has developed strong engineering capabilities in modularisation and has set up a dedicated advanced manufacturing facility at Mangalore in Karnataka with an investment of about Rs 400 crore. Spread across 123 acres of land, this plant can deliver revenues in the range of Rs 2,000-2,500 crore annually at the optimum level.

 

The Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) agreement for the use of SAF has opened the doors to new opportunities for Praj as India has set the target of blending 1 per cent by 2027 and 2 per cent by 2028. Whereas, the EU and the US have kept the SAF blending target of 6 per cent and 10 per cent, respectively.

 

Praj is expecting a huge opportunity in bioenergy from international markets, including Brazil, Argentina and Paraguay, for corn-based ethanol. Also, it is looking at an incremental 4 billion litres of opportunity from Brazil given the increase in blending norms from 27 per cent to 30 per cent. It is also exploring ethanol production from Napier grass and is in discussion with customers for potential developments. 

 

Praj is expecting SAF orders to come in from H2FY25 and is expecting long-term approximately 1 billion gallon litres of SAF from alcohol-to-jet route, opening an opportunity worth around Rs 60,000-70,000 crore (20 plants each having an opportunity), analysts at Elara Capital had said in the company's September quarter results update.

 

Meanwhile, on December 21, Praj had announced the inauguration of the country’s first sustainable road made using lignin-based bio-bitumen.

 

"This innovative lignin-based bio-bitumen, developed under the ‘Make in India’ initiative, not only replaces fossil-based bitumen, but also helps save significant foreign exchange, strengthening our nation’s vision of Atmanirbhar Bharat," Dr. Pramod Chaudhari, Founder Chairman of Praj Industries said.

 

Praj’s proprietary technology refines crude lignin into Lignin Bio-Bitumen and has the potential to replace fossil-based bitumen and offer sustainable solutions to the road infrastructure industry. This green construction material, with a blending capacity of up to 15 per cent, offers significant benefits, including a 70 per cent reduction in greenhouse gas (GHG) emissions compared to fossil-based bitumen.