Praj Industries Detailed Analysis 6 Aug 09

Comprehensive biofuel & brewery technology solutions Praj is a global Indian company that offers innovative solutions to significantly add value in bio-ethanol, bio-diesel, brewery plants and process equipment & systems for customers, worldwide. Praj is a knowledge based company with expertise and experience in Bioprocesses and engineering. It has one of the largest resource bases in the industry with over 450 references across all five continents. Energy equations around the world are changing rapidly, making renewable energy sources a part of every nation’s energy policy. Biofuels has been acknowledged as a proven alternative to fossil fuels like petrol (gasoline) and diesel for transportation. Praj has been creating innovative technology platforms to make biofuels a sustainable and attractive choice for all stakeholders for the past 25 years. Apart from making agri-linkages stronger, biofuels work towards mitigation of greenhouse gases for a cleaner, greener environment. Praj has one of the largest resource base deployed in the industry towards the cause of environment. Praj also has a noteworthy presence in the Brewery industry for engineering and equipment for beer production.

Financials of Praj Industries PE ratio /08/09 EPS (Rs)7.07Mar, 09 Sales (Rs crore)126.42Jun, 09 Face Value (Rs)2 Net profit margin (%)16.42Mar, 09 Last bonus1:118/04/07 Last dividend (%)9022/01/09 Return on average equity 29.25Mar, 09

Jun ' 09Mar ' 09Dec ' 08Sep ' 08Jun ' 08 Sales Operating profit Interest Gross profit EPS (Rs) Quarterly results in brief

No. Of Shares % Holding No. Of Shares % HoldingNo. Of Shares% Holding Promoter's holding Indian Promoters Sub total Non promoter's holding Institutional investors Banks Fin. Inst. and Insurance FII's Sub total Shareholding Pattern

Our Fundamental View While Praj has been a shocker always for years in terms of the price movements, the company has continued to grow too. The business is highly innovative but very specific and is based on a very long term model. The demand for its products should dramatically increase in the long term. On the short term, we see the following: Positives: Long Term Story Intact FII Holdings Sound Corporate Results Bio-Diesel given thumbs up in budget. Negatives:  Ethanol, the main raw material of the businesss, is running short.  Bio-Diesel too dependent on the crops, which are dependent on monsoon.  The brewery industries are cash strapped So on the whole, there are both positives and negatives in Praj Industries. It can be accumulated on declines for long term without any much fear. For the short to medium term, a close watch on crude oil prices alongwith monsoon should be kept to safeguard the investments. Also, the fact that markets move ahead of fundamentals usually, make it a wise investment choice now.

Praj Industries Med Term Chart Fib Levels So, 100 zone is not just a wave resistance, it is also a fib level. So is 133 zone: wave and fib both. The downchannel Resistance, hence tgt1

Praj Industries Long Term Chart Praj Industries shot up exponentially and fell down sharply. The stock is moving in a downchannel, and is still in a downchannel, even though the index is not in a downchannel anymore. Notice the M formation. Result? 200 to 50! Notice the W formation. Result? 50 to 100+! Forward Movements: If and when 100 breaks decisively, target 133, 160, 188.

Conclusion Summarizing the fundamental, long term technical, medium term technical view, we see that there is an immense potential in the stock on the upside. The hazy fundamentals suggest us to keep a close watch on technicals, and that the stock should be bought but with a cautious approach is a critical resistance, which if breaks, tgt 133, 160, 188. It would be wise to keep 90 as stop. Below 85, it may retest 50 zone and could also make a lower low.