Praj Industries Reports Rs 23 Crore Profit in Q2FY27

Revenue reached Rs 849 crore, while the order backlog remains at Rs 4,455 crore.

Reader Takeaway: Strong export-driven backlog supports future growth, though domestic ethanol project funding delays remain a key operational challenge.

What just happened

Praj Industries delivered a steady performance in the second quarter of fiscal year 2027. Revenue rose 1% year-on-year to Rs 849 crore, exceeding brokerage estimates by 3%. The company reported an EBITDA of Rs 52 crore, reflecting a 74% growth compared to the previous quarter. Profit After Tax (PAT) stood at Rs 23 crore, marking a 20% increase from the same period last year.

Strategic Developments

A major highlight is the board's in-principle approval to invest Rs 100 crore in a 50:50 joint venture with BPCL. This initiative aims to establish 8-10 Compressed Bio-Gas (CBG) plants with an estimated total project cost of Rs 800-1,000 crore. Additionally, the company is progressing with its GenX business, which has now qualified with 18 global customers, and construction on India's first Bio-IBA plant remains on track for late 2026 completion.

Order and Execution Dynamics

The total order backlog is Rs 4,455 crore. Bioenergy accounts for 75% of these orders, while engineering and HiPurity segments contribute 19% and 6% respectively. Exports remain a significant pillar, representing 37% of the total order book. However, management noted that execution for certain greenfield ethanol projects continues to be hindered by customer funding constraints.

Risks to watch

Growth is primarily threatened by delays in domestic ethanol capital expenditure and potential shifts in government policy. Investors should monitor the pace of order execution and the ability of clients to secure necessary project funding to ensure that the order backlog converts to revenue as expected.

Context metrics

The brokerage firm has maintained a HOLD rating with a target price of Rs 260, citing valuation at 21x September 2028 estimated EPS. Management has reiterated its long-term revenue target of Rs 10,000 crore by FY30.