Praj Industries Limited

Industrials — Engineering & Construction · NSE

₹289.05+₹1.35 (+0.47%)

DalalBaazaar Score

37 / 100

🔴 Weak

Verdict

CAUTION

Risk

Low

Driven by small-cap size, which brings sharper price swings, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:28 pm

Understanding the Business

Company site ↗

The 60-second version of Praj Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Praj Industries Limited operates in the field of bio-based technologies and engineering in India and internationally.

IndustryEngineering & Construction

SectorIndustrials

Employees1,629

Annual revenue₹3,136 Cr

How does it make money?

Turns over ₹3,136 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 1,629 employees supports ₹1.93 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.93 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., ADANI PORT & SEZ LTD, SIEMENS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 4.9% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE14.1%

What is the outlook?

4 analysts covering the stock expect revenue to grow about 17.4% and earnings to grow about 69.7% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+17.4%

Est. earnings growth+69.7%

Analysts4

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -9% while net margin moved -89% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-9%

Margin effect-89%

DalalBaazaar Score

37/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 3.2% a year
✗ Profit has declined at 53.7% a year

Quality vs. Valuation

Company Quality

35/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

26/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

176.3x

3Y Median

38.3x

40 monthly readings · mean 57.4x · range 24.4x–264.5x

Sector Median

30.1x

median of 3 sector peers

⚠️Current valuation is approximately 360% above its 3y median of 38.3x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 486% above the peer median of 30.1x.

vs. its own history

Expensive

38.3x median over 40 months · +360%

vs. sector peers

Expensive

30.1x median of 3 peers · +486%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

25.0x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Cash generation is improving
Free cash flow is up 23% over 3 years.
Very low debt
Debt/Equity of 0.13x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 22.2% to 1.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 28.9% to 4.9% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 1 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 311% over 3 years, from ₹42 Cr to ₹173 Cr.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 17.2x to 3.5x.
🟡Profit is decliningFinancial
Net profit is down 90% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 3.6 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Self-funding with balance-sheet headroom
Positive free cash flow of ₹156 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 10.4% to 6.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 360% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 22.2% to 1.8%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 5%✓ 6.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✓ 3.5x
How much operating profit can fall before interest stops being comfortably covered.
3Free cash flow remains positive✓ ₹156 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 4.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹5,313 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

176.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

4.06x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹1.64

Profitable

Profitable on a per-share basis

ROE

1.8%

Weak

Weak capital efficiency

ROCE

4.9%

Weak

Low return on total capital employed

Debt/Equity

0.13x

Low

Conservative leverage

Revenue Growth (YoY)

11.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

117.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.25%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹156 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

27.5x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

0.7%

Weak

Thin margins leave little room for error

Net Margin

0.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.46

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.16

Defensive

Steadier than the market

52W Range Position

10%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

303.0 / 322.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

26.1

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,463 Cr	₹3,417 Cr	₹3,189 Cr	₹3,136 Cr	-3.2%
EBITDA	₹360 Cr	₹428 Cr	₹372 Cr	₹214 Cr	-16.0%
EBITDA Margin	10.4%	12.5%	11.7%	6.8%	—
PAT (Net Profit)	₹240 Cr	₹283 Cr	₹219 Cr	₹24 Cr	-53.7%
EPS	₹13.05	₹15.42	₹11.91	₹1.3	-53.6%
ROE	22.2%	22.2%	15.8%	1.8%	—
ROCE	28.9%	27.0%	20.4%	4.9%	—
Total Debt	₹42 Cr	₹169 Cr	₹195 Cr	₹173 Cr	+60.1%
Free Cash Flow	₹127 Cr	₹110 Cr	-₹44 Cr	₹156 Cr	+7.1%

🔴 Revenue has shrunk at 3.2% a year over 3 years.

🔴 EBITDA has shrunk at 16.0% a year over 3 years.

🔴 EBITDA Margin has fallen from 10.4% to 6.8% over 3 years (-3.6 pts).

🔴 PAT (Net Profit) has shrunk at 53.7% a year over 3 years.

🔴 EPS has shrunk at 53.6% a year over 3 years.

🔴 ROE has fallen from 22.2% to 1.8% over 3 years (-20.4 pts).

🔴 ROCE has fallen from 28.9% to 4.9% over 3 years (-24.0 pts).

🔴 Total Debt has grown at 60.1% a year over 3 years.

🟢 Free Cash Flow has grown at 7.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,056 Cr

Total Liabilities

₹1,747 Cr

Cash & Equivalents

₹142 Cr

Operating Cash Flow

₹200 Cr

Capex

-₹44 Cr

Shareholding (proxy)

Institutional Holding

27.6%

Insider Holding

34.4%

Corporate Actions

Dividend Rate

₹3.6

Ex-Dividend Date

06 Aug 2026

Analyst Consensus

Recommendations

1 Buy · 3 Hold · 1 Sell

Target Price (Mean)

₹363.4

+25.7% vs CMP

Target Range

₹348 – ₹390

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
ADANI PORT & SEZ LTD	29.9x	14.1%
SIEMENS LTD	88.8x	10.5%

Recent News

3 mixed3 general

Praj Industries (NSEI:PRAJIND) Stock Forecast & Analyst Predictions

Simply Wall Street, 09 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Praj Industries Limited (PRAJIND.NS) Stock Price, News, Quote & History

Yahoo! Finance Canada, 09 Oct

From ethanol to data centres: Can Praj Industries turn diversification into growth?

The Indian Express, 15 Oct

Praj Industries shares rally 7% after Q1 profit more than doubles YoY

The Economic Times, 14 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Praj Industries Ltd. (PRAJIND) Share Price Rises 6.1% Today

Univest, 14 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Stock to buy today: Praj Industries (₹382.50) – BUY

BusinessLine, 23 Apr

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingRisk

WeakBusiness Quality · Growth · Profitability · Valuation

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 1 high-severity red flag sits above this conclusion and should be read first.

1 of 5 tripwires tripped — ROCE stays above 8% · see Key things to watch ↑