Praj Industries (PRJ IN) – Q2FY27 Result Update – Dismal Q2; GenX ramp-up key to recovery – BUY
Published on 31 Oct 2026
We revise our FY28E/FY29E EPS estimates by -14.7%/-7.8% as domestic ethanol execution, elongated project cycles and continued GenX and R&D investments weigh on revenue conversion and profitability. Praj Industries (PRAJ) reported a weak Q2FY27 performance with revenue increasing ~0.9% YoY and EBITDA margin contracting 47bps YoY on lower gross margins and an unfavourable mix. Domestic 1G ethanol execution remains subdued amid customer funding constraints and the ethanol supply-demand imbalance, particularly in sugar-based projects. However, international markets have opportunities across the US, Brazil, Argentina, Southeast Asia and Africa building into a pipeline of ~INR10bn over the next few quarters. CBG also offers growth visibility, with the proposed JV with BPCL, backed by an identified pipeline of 8–10 projects worth INR8–10bn. We maintain our ‘Buy’ rating given the recent correction in the stock price as we roll forward to Sep’28E, valuing the stock at a PE of 24x Sep’28E (26x Mar’28E earlier) arriving at a TP of INR353 (TP of INR390 earlier).
