PRAJIND - Praj Industries

📊 NSE: PRAJIND 🏢 Engineering 📅 Last Updated: 12/14/2025 11:11

💰 Financial Performance

Revenue Growth by Segment

In H1 FY26, revenue was split as Bioenergy (64%), Engineering (26%), and Praj HiPurity Systems (10%). Order intake for Q2 FY26 was INR 810 Cr, with Bioenergy contributing 71%, Engineering 16%, and PHS 13%.

Geographic Revenue Split

Export revenue accounted for 46% of total revenue in Q2 FY26, a significant increase from the historical average of 15-20%. The order backlog of INR 4,420 Cr as of September 30, 2025, is 65% domestic.

Profitability Margins

EBITDA margins moderated from 11.19% in FY24 to 10.06% in FY25, and further declined to 5.89% in H1 FY26. PAT margins followed a similar trend, dropping from 8.18% in FY24 to 1.66% in H1 FY26.

EBITDA Margin

EBITDA margin stood at 10.06% in FY25 (INR 324.8 Cr), down from 11.19% in FY24 (INR 387.9 Cr). H1 FY26 EBITDA margin compressed significantly to 5.89% (INR 87.3 Cr).

Capital Expenditure

Praj generates steady cash accruals of INR 180-250 Cr per annum (post-dividend), which are utilized to fund capital expenditure and working capital requirements without external debt.

Credit Rating & Borrowing

CRISIL Ratings assigned an 'A+/Stable/A1' rating. The company maintains a strong financial profile with nil debt (excluding lease liabilities) and an interest coverage ratio of 19.9 times in FY25.

⚙️ Operational Drivers

Raw Materials

Steel and specialized engineering materials are primary inputs. Material costs moderated to 10% of revenue in early FY24 but increased in FY23, impacting margins by approximately 70-80 basis points.

Capacity Expansion

Manufacturing facilities are located in Pune and a Special Economic Zone (SEZ) in Kandla, Gujarat. Specific capacity units (MT/units) are not disclosed.

Raw Material Costs

Raw material costs are a major driver; softening of material costs in FY24 improved margins to 10%, while price spikes in FY23 moderated margins to 8.1%. Procurement is managed through advance payments to mitigate volatility.

📈 Strategic Growth

Growth Strategy

Growth is driven by pivoting toward 'Praj GenX' for high-growth segments, expanding the pharma/ultra-pure water portfolio, and leveraging the INR 4,420 Cr order backlog. Diversification into zero liquid discharge (ZLD) and industrial effluent treatment provides non-ethanol revenue streams.

Products & Services

1G and 2G ethanol plants, brewery installations, zero liquid discharge (ZLD) systems, ultra-pure water systems for pharma, and critical process equipment.

Brand Portfolio

Praj, Praj HiPurity Systems (PHS), Praj GenX, Praj Matrix.

New Products/Services

Praj GenX is a new strategic pivot expected to contribute to revenue uptick in FY27. 2G cellulosic ethanol technology is a key focus for the bioenergy segment.

Market Expansion

Targeting the sustainable aviation fuel (SAF) market and expanding the international footprint, which reached 46% of revenue in Q2 FY26.

Market Share & Ranking

Established market leader in the domestic distillery and brewery installation business.

🌍 External Factors

Industry Trends

The industry is shifting toward E20 ethanol blending mandates in India, benefiting the bioenergy segment (71% of Q2 FY26 orders). Future shifts include 2G ethanol and sustainable aviation fuels.

Competitive Landscape

Operates in the capital goods sector against domestic and international engineering firms; specific competitor names not disclosed.

Competitive Moat

Moat is built on proprietary 2G ethanol technology, an established domestic leadership in distilleries, and a robust R&D setup (Praj Matrix). These are sustainable due to high technical entry barriers.