Recent GST Rate Cut To Benefit This Mulibagger Stock, Brokerage Recommends Buy For 38% Gains

Leading brokerage firm Prabhudas Lilladher recommends "Buy" Praj Industries Limited's stock for a target price of Rs 520 apiece. If you buy the stock at the Current Market Price, considering the estimated target price, you can expect a potential gain of up to 38%. Praj Industries is a small cap Capital Goods company engaged in the businesses of BioEnergy, High Purity Systems, Critical Process Equipment and Skids, Wastewater Treatment and Breywery & Beverages.

Stock Outlook & Returns

The Current Market Price (CMP) of stock is Rs 379/share. Stock trading 2.32% above the previous close. It opened at Rs 378.95/share. The stock recorded its 52-week low on 26 May 2022 at Rs 289.05, while the 52-week high level it touched on 11 October 2022 at Rs 461.60. It has a market capitalisation of Rs 7,032.31 crore. 
 
 In the past 1 week, the stock surged 2.84%. It fell by 5.44% in 1 last 1 month, and 2.05% in the last 3 months, respectively. In the last 1 year, the stock grew 20.36%. In the last 3 years, the stock gave 267.13% multibagger returns, and in the last 5 years, it gave 247.64% multibagger returns.

 

Recent Updates

• Government lowered GST rate to 5% from 18% on ethanol meant for blending under Ethanol Blended Petrol Programme.
• Under the government's Ethanol Blended Petrol (EBP) Programme, Oil Marketing Companies (OMCs) sell petrol blended with ethanol up to 10% and mandate to increase it to 20% by 2025.
• The government had notified administered price of ethanol in 2014 and for first time during 2018, differential price of ethanol based on raw material utilised for ethanol production was announced by the government.
• With this, the ethanol procurement by public sector OMCs has increased from 38 cr. litre in Ethanol Supply Year (ESY) 2013-14, to contracted over 350 cr. litre in ESY 2020-21.

Prabhudas Lilladher Recommends Buy For Rs 520 Target Price

Prabhudas Lilladher, said, "We believe this is a positive development, which is likely to boost government target of ethanol blending to 20% by 2025. Thereby, likely to benefit ethanol manufacturers and ethanol plant manufacturers such as Praj Industries."

It added, "We remain positive on Praj given 1) its strong leadership in domestic ethanol plants (~60-65% market share), 2) global presence (+100 countries) 3) focus on future-ready technologies like 2G plants, Compressed Bio Gas (CBG) and 4) diversification in Wastewater Treatment (ZLD), Critical Process Equipment's & System (CPES) & HiPurity business. The stock is currently trading at PE of 31.6x/21.9x/20.9x FY23/24/25E. We have Buy rating on stock with TP of Rs520, valuing it at PE of 30x Sep24E."

Disclaimer

The stock has been picked from the brokerage report of Prabhudas Lilladher. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.