Shares of Praj Industries, a prominent player in the global biotechnology and engineering space, witnessed a significant upswing for the second consecutive trading session on Tuesday, December 16. The stock climbed another 7.2% to reach ₹357.80 per share, marking its highest level in two months. This rally contributed to a cumulative two-day gain of 18%, offering relief to investors after a prolonged period of decline.
A Sharp Rebound Amidst a Tough Year
The recent surge is being celebrated by shareholders as a welcome recovery. The stock had been under sustained selling pressure since the beginning of the year, eroding significant investor wealth and drastically cutting the company's market valuation. However, despite this solid rebound, the stock's performance in 2025 remains deeply negative. The year-to-date decline still stands at a steep 57.21%.
This year's drop is notably the most severe for Praj Industries since 2008, when it ended the year with a loss of 73.40%. The stock's journey has been volatile; after falling below ₹50 in 2020, it staged an impressive bull run over the next four years, delivering staggering cumulative returns of approximately 1,900% before the rally lost steam in early 2025.
Analyzing the Financial Performance and Challenges
The company's weak financial results have deepened the crisis. For the second quarter of the fiscal year 2026 (Q2 FY26), Praj Industries reported a 65% year-on-year plunge in consolidated net profit to ₹19.2 crore, compared to ₹53 crore in the same quarter last year. The decline was attributed to higher other expenses related to its GenX initiatives.
On a sequential basis, there was a silver lining as net profit improved by 284% from the ₹5 crore reported in Q1 FY26. Revenue from operations for Q2 FY26 came in at ₹842 crore, showing growth from ₹816 crore in Q2 FY25 and ₹640 crore in the preceding quarter. At the operating level, EBITDA stood at ₹56 crore, down from ₹86 crore a year ago. EBITDA margins contracted to 7%, a drop of 400 basis points year-on-year, though they improved by 300 basis points from the previous quarter.
The company continues to face headwinds. Persistent execution challenges and subdued demand for new ethanol plants, following the achievement of the EBP 20 target, are weighing on its domestic BioEnergy segment. External business is also impacted by factors like US tariffs.
Long-Term View and Future Growth Drivers
Despite the sharp correction, the long-term picture for Praj Industries still holds merit. The stock is trading 205% higher over the last four years and had touched a fresh record high of ₹875 per share in early January 2025. At current levels, it is trading at its lowest point since April 2023.
Analysts point to a potential turnaround driven by the company's strategic diversification. Its foray into new areas like Compressed Biogas (CBG), bio-bitumen, biopolymers, and Sustainable Aviation Fuel (SAF) is gradually gaining traction. These ventures are expected to provide visibility for medium-term growth, offsetting some of the current sectoral slowdowns.
According to the latest BSE shareholding data, retail investors hold a 34.8% stake in Praj Industries. Promoters, Foreign Institutional Investors (FIIs), and Domestic Institutional Investors (DIIs) hold 32.8%, 17.5%, and 14.8% stakes, respectively.
