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Praj Industries Limited – Benefiting from the Industry’s Tailwinds

Praj Industries Ltd. has 50 to 55% market share in India for ethanol installation.

(A) About the company

Praj Logo

Praj Industries is an Indian industrial biotechnology company with global operations. It was founded in 1983 and is headquartered in Pune, India. Further, Praj has over 1000 customer references in 100 countries across 5 continents. Also, Its diverse portfolio includes bio-energy solutions, high-purity water systems, breweries, critical process equipment and skids, and zero-liquid discharge systems.

Praj is committed to sustainable development and its vision is to make the world a better place using innovative technology solutions that are aimed at sustainable decarbonization, reducing energy and water footprints, and also for optimizing resources.

(B) Journey

(C) Executive Management

Key Management Praj Industries PAWealth

(D) Shareholding Pattern


(E) Business Segments

BusinessSegments Praj Industries PAWealth

The segments are:

(i) Bio Energy: 

This segment provides technologies and solutions for the production of biofuels, biogas, and also other renewable energy products.

1G & 2G Ethanol plants: Praj offers technologies for the production of ethanol from both 1st generation (starchy feedstocks) and 2nd generation (lignocellulosic feedstocks) materials.

Bio-Gas: Praj offers technologies and solutions for the production and also for utilization of biogas.

Future Fuel: Praj is developing technologies for the production of future fuels, such as sustainable aviation fuel (SAF), marine biofuels and BioHydrogen.

(ii) R&D: 

This segment conducts research and development in the areas of biofuels, biogas, and also other renewable energy technologies.

Customized Research Services & Solutions: Praj offers customized research services and also solutions to its customers.

BioPrism: Praj is developing renewable chemicals and also materials from biomass.

(iii) High Purity Solutions: 

This segment provides technologies and solutions for the production of high purity water and also other fluids.

Water Systems: Praj offers a range of water systems for a variety of applications, including pharmaceutical, food and beverage, and also for semiconductors.

Modular Process Systems: Praj offers modular process systems for the production of a variety of products, including biofuels, biogas, and also for chemicals.

(iv) Engineering Businesses: 

This segment provides value-added services, such as engineering, procurement, and construction (EPC) services, and training services.

Engineering Businesses: Praj offers EPC services for the construction of biorefineries, biogas plants, and also other renewable energy projects.

Brewery and beverages: Praj offers technologies and solutions for the brewing and also the beverage industry.

Zero Liquid Discharge: Praj offers technologies and solutions for the treatment and also disposal of wastewater.

(F) Revenue Segments

Praj Industries - Revenue Segment

The pie chart shows the percentage of revenue generated by different segments of Praj Industries Ltd. in the fiscal year 2023 (FY23). While, The largest segment is the sales of products and projects, which accounted for 88.6% of the total revenue. Further, The sales of services and other operating revenue accounted for 9.55% and 1.85% of the total revenue.

The pie chart is labeled with the following information:

  • Products and Projects: This segment includes the sales of products and also the projects that the company manufactures and sells.
  • Sale of services: This segment includes the sales of services that the company provides to its customers.
  • Other Operating Revenue: This segment includes revenue from other sources, such as Scrap sales and also for sale of licenses.

(G) Cost Structure of Praj Industries Ltd.

Praj Industries - Cost Structure

The pie chart shows the cost structure of Praj Industries Limited (PIL) as a percentage of net sales for the fiscal year 2023 (FY23). Further, The chart is divided into 5 segments, each representing a different cost category.

The largest cost category is raw material expenses, which account for 63.18% of net sales. While, This is followed by power and fuel costs (0.33%), employee costs (7.33%), selling and administrative expenses (6.29%), and other expenses (14.92%).

(H) Financial Parameters

Financials_Praj Industries_PAWealth

The table shows that PIL's Net sales has been increasing steadily over the past 10 years. In March 2014, the company's operating income was INR 985.84 crore. By March 2023, it had grown to INR 3528.04 crore at 15.22% CAGR.

The table shows that the PAT of PIL from March 2014 to March 2023 has been increasing steadily over the past 10 years. In March 2014, the company's PAT was INR 56.51 crore. Moreover, By March 2023, it had grown to INR 239.81 crore at 17.42% CAGR.

DuPont Praj Industries PAWealth

PIL's Asset turnover has increased from 0.8x to 1.3x over the past 3 years.

(I) Management Discussion & Concall Highlights


  • Praj has developed a first-of-its-kind 2G ethanol plant at IOCL Panipat. While, Praj is also working on two more 2G ethanol plants for HPCL and BPCL, which are expected to be commissioned in FY24.
  • India's ethanol blending program is progressing as planned, and also the country is on track to meet its 20% ethanol blending target by 2025. Moreover, The Indian government has announced a tax relief for sugar mills and a plan to build additional ethanol production capacity.
  • Praj has partnered with AirAsia India and also Indian Oil Corporation Limited to fly first commercial flight in India powered by a blend of ‘indigenous’ SAF.
  • Praj to launch a new subsidiary- Praj GenX Limited to focus on developing cutting edge modularized solutions, as well as critical equipment.
  • PHS, Praj's subsidiary has received an order for large-size fermenters for the pharma application from Oman apart from 30 Fermenter orders for various emerging and also established clients in India. PHS also booked its first order in the Semiconductor sector.
  • Praj Matrix, Praj's R&D center, is working on technologies for production of Sustainable Aviation Fuel (SAF), marine biofuels, Bio-Hydrogen and also bioplastics.

Concall Highlights

  • Praj saw an increase in share of international order reaching 35% of the total order book.
  • Praj has signed a term sheet for the formation of a 50/50 joint venture with Indian Oil to produce various variety of biofuels which includes ethanol, biogas, and also SAF.
  • The company started working on setup of 5 Compressed bio gas plants for a major company in India.
  • The United States has announced a program to produce 3 billion gallons of Sustainable Aviation fuel over the next five years.
  • Praj Industries is planning to invest Rs. 100 crore in its GenX subsidiary. The company expects to achieve asset turnover of more than 15 times on the full capacity utilization of the plant.
  • Praj has supplied all the equipment for two more 2G ethanol plants to HPCL and BPCL. Further, The projects are now in the construction stage while Praj expects the plants to start commissioning in the second half of next year.

(J) SWOT Analysis


(i) Established market position

Praj has been an undisputed market leader in the domestic ethanol plant installation and equipment business and also the domestic breweries installation segment.

(ii) Satisfactory order pipeline

Orders worth Rs 3,380 crore as on December 31, 2022, across the three business segments assure medium-term revenue visibility.

(iii) Healthy diversity in revenue profile

Praj has diversified into water and wastewater management, critical process equipment, bio-nutrients, HiPurity Systems with further the objective of reducing its dependence on core business of ethanol-based products. 


(i) Exposure to cyclicality in the capital goods industry

Praj operates in the inherently cyclical capital goods sector, where demand is dependent on the capital expenditure (capex) cycle of its end-user industries.

(ii) Exposure to project-related risks

Business is exposed to project-related risks such as fluctuations in input prices.


(i) India's EBP 20

India's EBP 20 program is moving ahead and also the government has launched 20% ethanol branded petrol at select outlets in 11 states.

(ii) New collaborations

Praj has recently partnered with several leading companies in the biofuels industry, such as Axens for SAF, Sekab E-Technology AB for expansion in nordic countries, and Indian Oil Corporation Ltd.

(iii) Growing demand for sustainable products and services 

There is a growing global demand for sustainable products and services. Moreover, Praj's focus on sustainability makes it well-positioned to meet this demand.


(i) Competition from international players

There are a number of international players in the ethanol and biofuels industry, such as Abengoa Bioenergy, Valero Energy Corporation, and Green Plains Renewable Energy.

(ii) Changes in technology 

The ethanol and biofuels industry is constantly evolving, with new technologies being developed all the time.

(iii) Government regulations 

The government could impose regulations that make it more difficult as well as, expensive for Praj Industries to operate.

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References:  Annual Reports, News Publications, Investor Presentations, Corporate Announcements, Management Discussions, Analyst Meets & Management Interviews, Industry Publications.

Disclaimer: The report only represents the personal opinions and views of the author. No part of the report should be considered a recommendation for buying/selling any stock. Thus, the report & references mentioned are only for the information of the readers about the industry stated.

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