Praj Industries Ltd - REDUCE - TP Rs.80 - Result Update - Kotak

- Praj continued with its weak performance given muted order book. However, the numbers showed improvement on sequential basis. Order intake was also healthy and mainly driven by the engineering segment. The business outlook shared by the management was also optimistic as compared to earlier interactions and the management indicated that it is witnessing good rise in enquiries.

- However, the tepid order book of the company constrains earnings visibility. Hence, we prefer to be cautious until the order book grows meaningfully to a level that provides us with comfort on future earnings outlook. Also, we may revise our call if 1) the company wins back the Petrobras order which has now gone into renegotiation 2) order win in 2G ethanol project from OMCs. However, until then, we maintain "Reduce" rating with a revised price target of Rs 80, based on 20x FY19 earnings (Rs 73 earlier).

Shares of PRAJ INDUSTRIES LTD. was last trading in BSE at Rs.77.1 as compared to the previous close of Rs. 79.8. The total number of shares traded during the day was 148347 in over 699 trades.

The stock hit an intraday high of Rs. 79.55 and intraday low of 75.85. The net turnover during the day was Rs. 11497082.

Source : Equity Bulls

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