Praj Industries (PRJ) Research Report

Key Highlights

• Praj Industries expects FY27 to be a recovery year driven by improved order inflows and better utilization of the GenX facility.
• The GenX facility is expected to break even at revenue of INR4-5 billion, despite elevated fixed costs.
• The company is undergoing a structural shift in its 1G ethanol business, transitioning from greenfield to brownfield opportunities and services-led revenue.

Business Segments

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• CBG Segment: A healthy pipeline of INR10 billion exists, although execution remains constrained by feedstock and offtake challenges. Recent policy support for CBG blending into gas pipelines improves long-term visibility.
• SAF (Sustainable Aviation Fuel): Emerging as a key global opportunity, Praj Industries is focusing on high-value engineering mandates.
• Iso-butanol: An emerging alternative fuel, with potential for growth.
• Services Segment: Gaining traction as a stable, annuity-like revenue stream.

Valuation and Recommendation

• The stock is trading at a P/E of 28.2x/21.0x on FY27/28E.
• We maintain our 'Accumulate' rating on the stock, valuing it at a P/E of 26x for Sep'27E, with a target price of INR340.