Praj Industries - Sedate Quarter; On Road to Recovery; Result Update Q3FY15 :: Edelweiss

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Praj Industries - Good Show; Result Update Q2FY15 :: Edelweiss, PDF link

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Technicals-Hindustan Copper, Greaves Cotton, Praj Industries, JB Chemicals, Sobha Developers, Bharat Electronics :: Business Line

Praj Industries :Stake increase in subsidiary… : ICICI Securities

Stake increase in subsidiary…
Praj Industries Ltd has increased its stake in its Mumbai based subsidiary
Neela Systems Ltd by 9.8% for | 12.5 crore. Praj had acquired a 50.2%
stake in Neela Systems at | 64 crore on January 6, 2012. This acquisition
would be funded by the internal accruals of the company. According to
the Praj management, it would increase its stake in Neela Systems further
within three years. We believe the acquisition is EPS accretive for Praj led
by the higher profit margins of Neela. We maintain our target price of | 58
and upgrade the stock from HOLD to BUY.

Buy Praj Industries; Target :Rs 96 :: ICICI Securities

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S u s t a i n a b l e   o r d e r   i n f l o w s …
Praj Industries posted strong Q3FY12 results with topline growth of 54%
to | 219.3 crore compared to | 148.2  crore in Q3FY11. Out of the total
sales, 50% is from the domestic business and the rest from the
international business. Raw material  to sales increased from 62.9% in
Q3FY11 to 63.6% of the sales in the quarter. Despite high raw material
cost, EBITDA margins improved by 180 bps to 9.4% led by increasing
enquiries/higher engineering income  from domestic as well as African
region. Other income increased from | 6.7 crore to | 10.3 crore on
account of higher treasury gains. Higher EBITDA and other income
resulted in a 50.3% jump in net profit from | 13.7 crore to | 21.5 crore.
ƒ Highlights of the quarter
The company received orders worth | 220 crore (~85% domestic orders
and ~15% exports orders) during the quarter. Order inflow constitutes
58% of orders from ethanol and 42%  non-ethanol segment (out of this
29% from beer and 71% waste water management). Total order book at
the end of the quarter stands at | 900 crore (46% international & 54%
domestic). In the total order book, 74% comprises ethanol based orders &
26% non-ethanol (out of which 40% is from the waste water segment).
V a l u a t i o n
At the CMP, the stock is trading at 19.5x and 15.6x its FY12E and FY13E
EPS of | 4.1 and | 5.1, respectively. With a sustainable order book at
| 900 crore and continuous order inflows to the tune of | 200 crore, the
outlook for the ethanol equipment is improving. We believe the rise in
ethanol prices and rising ethanol demand to more than 1000 million litres
in domestic market would further improve the demand for ethanol
equipment and more enquiries would result in higher engineering income
and, in turn, higher margins, going forward. We remain positive on the
stock and maintain our BUY rating and target price of | 96/share.

Praj Industries - Buy: Target Price Rs 110 :KJMC

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Praj Industries declared its Q2FY12 results which remained much above our
estimates. Net sales reported a robust growth of 110.4% at Rs 2289.0 mn on
stand alone basis. EBITDA & PAT too reported a strong double digit growth of
269.5% and 130.9% at Rs 245.8 mn and Rs 205.3 mn respectively with an
improvement of 460 bps in EBITDA margins. PAT margins improved by 80 bps
to 9.0%
Key Highlights
􀁠 Q2FY12 performance places Praj on a high growth trajectory: Net sales
reported a robust growth of 110.4% at Rs 2289.0 mn on stand alone basis.
EBITDA & PAT too reported a strong growth of 269.5% and 130.9% at Rs
245.8 mn and Rs 205.3 mn with an improvement of 460 bps in EBITDA
margins. PAT margins improved by 80 bps to 9.0%. Exports contributed
around 48% to the total revenues for Q2FY12. The non ‐ ethanol business is
also witnessing a huge traction wherein it has also received a major order
during the quarter.
􀁠 Order inflows and order book witness substantial improvement: Praj received
orders worth Rs 2,800 mn during Q2FY12 of which 52% remained from the
domestic markets and the rest 48% came from international geographies.
The order backlog as on 30th September 2011 stood at Rs 9000 mn
reporting a growth of 50% on y‐o‐y basis. Order execution period for the
domestic order stands in the range of 12‐15 months and 15‐18 months for
the international order book. During the quarter the company received a
major order from a sugar company in South Africa. It also received a major
order from Tirupur Industrial belt for textile common effluent. Ethanol
business contributed around 78% to the order book with the balance 22%
being contributed by the non ethanol business.
􀁠 Kandla & Jejuri plants get operational: Praj inaugurated the second unit of
the Kandla SEZ which has the potential to contribute around Rs 600‐Rs
1200 mn in next 2‐5 yrs time frame. Praj also inaugurated its Jejuri plant
which will manufacture specialized high margin products and is likely to
add Rs 600 – Rs 1000 mn to the revenues during next 2‐5 yrs.

Buy Praj Industries; Target :Rs 96 ::ICICI Securities,

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S t e l l a r   p e r f o r m a n c e …
Praj Industries put up a stellar performance in Q2FY12 with net sales
increasing by 111.6% YoY from | 108.2 crore in Q2FY11 to | 228.9 crore
in Q2FY12. Though raw material costs were higher during the quarter,
64% of net sales compared to 58.8% in Q2FY11, a considerable
rationalisation in employee cost, from 17.3% in Q2FY11 to 10.7% in
Q2FY12, helped the company to improve its margins. Margins for the
quarter stood at 8.4% against 7.9% in Q2FY11. Consequent to the higher
sales and margins, Praj’s earnings jumped by 130.7% during the quarter
to | 20.5 crore from | 8.9 crore in the corresponding quarter last year.
ƒ Highlights of the quarter
Praj received orders worth | 270 crore (~52% international orders, ~48%
domestic orders) during Q2FY12 with the total order book at the end of
the quarter at | 900 crore ((~55% international, ~45% domestic).
The company inaugurated its two new facilities at Kandla and Jejuri (near
Pune) during the quarter. The Kandla plant manufactures high thickness
pressure vessels and static equipment while the Jejuri plant produces a
range of bio-tech products used in  the production of ethanol, beer and
sugar. The company has also formed a wholly owned subsidiary, Praj
South Africa PTY Ltd. and Praj Tanzania in Africa to execute its operations
in Africa.
V a l u a t i o n
At the CMP, the stock is trading at 21.8x and 15x its FY12E and FY13E
EPS of | 3.5 and | 5.1, respectively. With the increasing order inflows
especially from international operations and improvement in orders from
the non-ethanol business, we expect the revenues of the company to
grow at a higher rate. Further, margins are also expected to sustain at
current levels led by the higher international orders composition. We
have valued the stock at 14x its FY13E EPS of | 5.1 and added the cash
value of | 25/share to arrive at the target price of | 96.

Buy Praj Industries; Target : Rs 100::ICICI Securities

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Praj Industries


O r d e r   b o o k   c o n t i n u e s   t o   s t r e n g t h e n …
Praj Industries reported its Q1FY12 results with a robust increase in sales
increasing ~75% YoY to | 164.3 crore from | 93.7 crore in Q1FY11.
However, the change in the sales mix (higher domestic sales) coupled
with  higher  raw material  cost  (~61%  of  net  sales  over ~54%  in Q1FY11)
pulled down margins considerably to ~9.3% from ~29.8% in Q1FY11.
Therefore, in spite of a healthy growth in sales, bottomline growth
remained relatively moderate and stood at | 13.7 crore in Q1FY12 against
| 10.4 crore in Q1FY11.
ƒ Revenue mix
Revenues during the quarter accounted for a higher share (~65%) from
the domestic markets than the international markets. A higher
contribution from overseas helps the company to report better margins,
which consequently witnessed a dip in Q1FY12. The segment wise breakup of revenues included ~75% from ethanol & distillery, ~17% from
brewery plant and ~8% from software and waste-water management.
ƒ Order book position
During the quarter, the company  received orders worth | 265 crore
(accounted by ~60% international  and ~40% domestic) with ~80% for
ethanol distillery segment, 11% from the brewery segment and ~8% for
waste water segment. Hence, the company’s order book at the end of the
quarter stands at ~| 850 crore (50% international). The time frame of
execution for the orders is ~nine to 10 months.
V a l u a t i o n
At the CMP of | 89, the stock is trading at 18.7x and 15.8x its FY12 and
FY13 estimated EPS of | 4.7 and | 5.6, respectively. With the company’s
order book increasing ~21% YoY  to | 850 crore and beginning of
overseas order inflows for water and waste treatment, we expect sales
and earnings to continue witnessing substantial improvement. Therefore,
we have valued the stock at 14x its FY13E EPS of | 5.6 and included the
cash value per share of | 22. We have arrived at a target price of | 100
and assigned it a BUY rating

KIFS Result update of NIIT-Thermax-Praj

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KIFS Result update of:

NIIT LTD

OVERVIEW

NIIT offers training solutions in area of IT, business process outsourcing (BPO), banking, finance and insurance, executive management education and professional life skills. The company is restructuring the business by reducing the dependence on the government schools business. The company has not initiated a single new project in FY11 on the Government schools side. The eGuru program is gaining increased acceptance. NIIT has more than 2000 private schools. In transitioning new projects (CLS) business is expected to grow by about 16% in FY12. Improving sentiment in developed economies is expected to help CLS report better numbers.

 Key highlights:

· Total income  grew by 10% Y-o-Y to Rs. 156 cr. v/s Rs. 142 cr in June-10

· Operating Profit fell by 55% Y-o-Y to Rs. 9 cr.  v/s Rs. 19 cr in June-10

· OPM fell by 794 bps Y-o-Y to 5.6% v/s 13.5% in June-10

· Net loss widen by 1118% Y-o-Y to Rs. –12 cr. v/s Rs. –1 cr in June-10

· NPM fell by 708 bps Y-o-Y to –6.4%  v/s 0.8% in June-10

THERMAX

OVERVIEW

Thermax offers engineering solutions to various industries. It offers wide range of products and services in heating, cooling, waste heat recovery, captive power, water treatment, recycling and waste management. The company has three plants coming up in the next 18 months including

supercritical boilers, chemicals and air pollution control equipments. The company has consolidated its strong position in the sub-15 MW power plants with a 40% market share. Commercial production from manufacturing and assembly shop for air pollution control equipment at Solapur is expected to begin in the last quarter of FY12.

Key highlights:

· Total income grew by 32% Y-o-Y to Rs.1044 cr. v/s Rs. 790 cr in June-10

· Operating Profit grew by 17% Y-o-Y to Rs.128 cr. v/s Rs.110 cr in June-10

· OPM fell by 162 bps Y-o-Y to 12.3%  v/s 13.92% in June-10

· Net profit grew by 21% Y-o-Y to Rs. 80 cr.  v/s Rs. 66 cr in June-10

· NPM fell by 73 bps Y-o-Y to 7.65%  v/s 8.38% in June-10

PRAJ INDUSTRIES

OVERVIEW

Praj Industries was set up in 1984 with a vision to deliver cutting edge technologies to distillery industries. It is leading biofuel Technology Company providing number of processes and systems for ethanol and biodiesel productions. For last two quarters company has been booking orders in excess of Rs 250 crores. The total order book of the company stood at Rs 750 crore. The order book composition shows some optimistic picture. Order book is gradually shifting towards export market and order book composition as on March 31,2011 between export and domestic stands at 60: 40 compared to 40:60 as on March 31,2010.

Key highlights:

· Total income grew by 76% Y-o-Y to Rs. 165 cr. v/s Rs. 94 cr in June-10

· Operating Profit grew by 37% Y-o-Y to Rs. 20 cr.  v/s Rs. 15 cr in June-10

· OPM fell by 345 bps Y-o-Y to 12.2%  v/s 15.7% in June-10

· Net profit grew by 32% Y-o-Y to Rs. 14 cr.  v/s Rs. 10 cr in June-10

· NPM fell by 274 bps Y-o-Y to 8.32%  v/s 11.1% in June-10

Thanks and Regards,

KIFS Research

Sizzling Stocks - Crompton Greaves (Rs 182.5) Praj Industries (Rs 93.6):: Business Line,

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After the company's announcement of lower-than-expected first quarter results, its stock price plunged 14 per cent, emphatically breaking through its long-term support level at Rs 240 on June 19. The stock tumbled another 14 per cent in the subsequent trading session and finished the week with an overall decline of 25 per cent. There also was an increase in volume traded over the past four sessions.

The stock is currently testing its key long-term support at around Rs 180. Further, its daily indicators have reached oversold levels. The stock has breached the lower band of its daily as well as weekly Bollinger Bands. This also signals that it is oversold. Therefore a corrective rally is possible, in which case it can encounter resistance at Rs 195 or Rs 210 in the near term. Next significant resistance is at Rs 240.

The stock has been on an intermediate-term downtrend since its all-time high of Rs 349 recorded in December 2010. Strong declines below Rs 171 will however signal the resumption of this downtrend and pull the stock down to Rs 150 in the medium term.

Praj Industries (Rs 93.6)

The stock sky-rocketed more than 16 per cent on Friday following the better-than-expected Q1 results announcement. This surge has given a conclusive break-out for the stock, which was consolidating sideways in the broad range between Rs 65 and Rs 85 from May 2010. There is an increase in daily volumes over the past three trading sessions. The stock's current rally can encounter hurdle at its immediate key long-term resistance, pegged at Rs 100. Failure to surpass this level can pull the stock down to Rs 88 or Rs 85. Important support below this level is at Rs 74.

On the other hand, a decisive move above Rs 100 can lift the stock higher to Rs 110, which is the next key long-term resistance, and then to Rs 116 in the medium term

Add Praj Industries- Impressive order book growth… ICICI Securities

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Praj Industries- Impressive order book growth…  
Praj Industries’ Q3FY11 result were  in line with our estimates as the
topline witnessed flat growth at | 148.2 crore compared to | 147.4 crore
in Q3FY11. However, it grew ~37% over Q2FY11. The company received
fresh orders worth  | 250 crore (60% international orders and 40%
domestic) in the quarter. EBITDA margins remain low at 7.6% similar to
6.2% in Q2FY11 but declined from 22.4% in Q3FY10. The raw material to
sales ratio increased from 58.6% in Q3FY10 and 58.8% in Q2FY11 to
62.9% in Q3FY11 as 95% of the revenue contribution was from products
and only 5% was from engineering (servicing part). Net profit stood at |
13.6 crore, declining from  | 29.2 crore in Q3FY10 but witnessed an
improvement from | 8.9 crore in Q2FY11.

Praj Industries -Brewing The Right Chemistry BUY: KRChoksey,

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Praj Industries
Brewing The Right Chemistry BUY

Impact Analysis of Praj Industries Strategic Partnership with Qteros to accelerate
commercial production of Cellulosic ethanol:
The Development: Praj Industries Ltd has entered into a strategic partnership with US based
Qteros Inc. for accelerated development and commercialization of Process Development
Package (PDP) for Cellulose based Ethanol ( also called second generation Bio Ethanol). Praj
will be using Qteros’ Q-Microbe enabled Consolidated Bio Processing (CBP) platform to
develop the Process Package. The companies have set 18-24 months as targeted timeframe
for successful commercialization of Cellulosic Ethanol.

Emkay Update -28.12.10- Techcheck Daily

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Techcheck Daily

BUY 5600-6400 Jan strangles on Nifty

n     Chart of the Day: Praj Industries, high volumes just as prices breakout, expect the stock to outperform from hereon, 95-100 initial targets

n     Nifty expect a directional move in January, preferred view remains down with odds as high as 75%, recommend buying 5600-6400 strangle for Jan

n     Sensex quarterly cycles stretched, highly likely that turn windows emerge, keep a close watch on this quarters closing, it’s a touch and go setup

n     DXY bullish reversal patterns, targets at 85-88 once breakout happens

n     Stocks with positive short term view

n     Exide, Maruti, Reliance Capital, L&T(stoploss1900), Sesa Goa, Infosys, TCS, ITC

n     Stocks with negative short term view

n     GAIL, Crompton Greaves, HLL, TISCO, Bank Nifty,  Axis, Bharat Forge, Titan, ACC, BHEL, M&M

Praj Industries:: Short term pain for long term gain BUY:: KRChoksey

Visit http://indiaer.blogspot.com/ for complete details 􀂄 􀂄


Recently we had the opportunity to meet management of Praj Industries Ltd. We
had discussion with Mr Pramod Chaudhary, Executive Chairman of Praj Industries
along with his team members to understand current state of business and various
measures company is taking to bring itself back on growth track.
The synopsis of our discussion is as follows:
• On recurring disappointing performance of Praj for last few quarters:
There has been order cancellations both in Europe and North America due to
recession and though some orders were not cancelled officially by client,
financial commitment was not made towards the same. This is reflected into
Rs 150 cr order write-off by the company during September quarter. As on
September 30,2010 confirmed order-book of the company stands at Rs 600cr
to be executed over 12-14 months period.
• US senate has passed the law making 15% ethanol mixing mandatory: US
senate has cleared the bill making it mandatory for Oil companies to mix
15% ethanol. This move by US will create demand for additional bio refinery
capacity of approx 4bn gallons per annum. Current benchmark suggests
capex requirement of USD 1.75 for each gallon of bio refinery capacity
creation. Thus US Government’s move will present a business opportunity
of USD 7-8 Bn for Praj Industries. Company has informed that they have
started receiving enquiries for the same. However, they refused to divulge
any further details.
We are of the opinion that this move by US government to allow additional
ethanol mix is prompted by motive for employment generation and this
business opportunity is very real in nature. Praj will be able to win good
chunk of this business.
We expect positive announcement on this front during visit of US
president in November 2010.
• Company is taking measures to enhance management bandwidth: As with
most of the small to mid size companies, Praj had limitations on its
management bandwidth which was reflecting in muted project execution
and lack of new order wins. They had people with good technological
background but with limited relevant project execution capability. Recent
management shuffling with induction of Mr Prakash Kulkarni ( Exec
Chairman- Gabriel india, Ex MD- Thermax) can be seen as an effort to
address this crucial issue. They have shortlisted another industry stalwart as
replacement for Mr shasank Inamdar who is expected to lead the ship with
more vigour.
• Company has chalked out a sustainable long term strategy: The
management has drawn a clear roadmap to sustain momentum in existing
stream of business while at the same time nurturing R&D to tap emerging
and untapped opportunities to add additional basis points to bottomline