Rs 75 to Rs 475: This stock turned into a multibagger in three years; hit record high last week

Shares of Praj Industries Ltd have turned into multibagger in the last three years. The stock, which closed at Rs 74.9 on August 28, 2020 closed at Rs 475.60 on BSE on August 28, 2023, delivering 535% returns in three years. During the period of two years and one year, the stock climbed 40.7% and 22%, respectively. In comparison, Sensex has zoomed 64.68% in three years. The biotechnology stock hit a yearly low of Rs 299 on March 28, 2023 and a record high of Rs 514 on August 22, 2023.

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In the last session, Praj Industries shares ended 1.25% higher at Rs 475.60 against the previous close of Rs 469.75 on BSE. Total 1.04 lakh shares of the firm changed hands amounting to a turnover of Rs 4.97 crore on BSE. Market cap of the firm climbed to Rs 8737.39 crore.

In terms of technicals, the relative strength index (RSI) of the Praj Industries stock stands at 58.6, signaling it's trading neither in the overbought not in the oversold zone. Praj Industries shares have a beta of 0.7, indicating very low volatility in a year. Praj Industries shares are trading higher than the 20 day, 50 day, 100 day, 150 day, 200 day but lower than the 5 day and 10 day moving averages.

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The firm reported a profit of Rs 58.7 crore in the June 2023 quarter compared to Rs 41.3 crore profit in the corresponding period last year. Revenue from operations climbed to Rs 748.8 crore in the first quarter of current fiscal compared to Rs 735.4 crore in the year-ago period. Operating profit climbed to Rs 75.5 crore in Q1 against Rs 55.9 crore in the June quarter of the last fiscal.

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Here’s a look at the outlook of the stock.

Abhijeet from Tips2trades said, “Praj Industries is bearish on the Daily charts with strong resistance at 505. A daily close below support of 458 could lead to targets of 429-382 in the near term.”

Aditya Gaggar Director of Progressive Shares said, "A robust rally was seen in the Praj Industries Ltd right from the price of Rs 40 to Rs 440 followed by a consolidation of almost 2 years. Recently, the stock has not only given a breakout from the congestion but also from the Rounding Bottom formation with a considerable volume. Leading and Trend following indicators support price activity and suggest a continuation of the trend. As per the pattern, the target is Rs 600."

Gaurav Bissa, VP, InCred Equities said, "Praj Industries has witnessed a swift and a strong upside from Rs 300 levels in the last few months. The volumes in the last few weeks have been more than 20-week average implying the stock has witnessed strong accumulation. The stock is however trading near its rising trendline resistance on the weekly charts. A weekly close above Rs 500 will result in a fresh breakout which can push the stock towards Rs 550-560 levels. RSI is trading above its breakout level of 70 which suggests the stock is likely to sustain its uptrend going forward and a move above 78 in RSI will likely give a further push to the stock price. Investors are advised to buy Praj only after a weekly close above Rs 500 levels and ride the uptrend."

Ravi Singh, market expert said, "The technical setup in Praj Industries like RSI, MAs and Williams are in the neutral zone suggesting the upmove to end soon. The long term MAs are trading above the stock price and beta of the stock is very low. Also, the stock has a strong resistance near Rs 500 levels. However, in the current momentum, Praj Inds may touch the levels of Rs 500 but from there we may see some correction in the stock. Considering the business model of the company, long term perspective investors may continue in their positions."

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, "The stock has maintained a good support base near Rs 460 levels and has indicated a positive bullish candle pattern in the daily chart. We anticipate an upward move in the coming days and with the RSI also showing a trend reversal has signaled a buy. We suggest to buy and accumulate this stock for an upside target of Rs 540 keeping the stop loss of Rs 460."

Axis Securities has maintained its buy rating with a target price of Rs 500.

“Domestic business augurs well as Ethnaol Blending continues with strong traction in FY23 and mostly like pre-poning its target, the overall demand-supply gap of Ethanol, increased interest in grain[1]based distilleries and decarbonisation impetus is auguring well for Praj along with development in other key verticals such as CPS, ZLD & High Purity gaining traction. Praj is a key beneficiary of multiple tailwinds provided by the bio-economic revolution, giving strong growth & revenue visibility for the next 3-5 years. The company's is the pure equity play on global decarbonisation theme & therefore we maintain our BUY rating with a target price of Rs 500 valuing the company at 25x FY25E,” said Axis Securities.

Praj Industries Limited is a biotechnology company. The company’s business lines include BioEnergy, Praj HiPurity Systems (PHS), Critical Process Equipment & Skids (CPES), Wastewater Treatment, and Brewery & Beverages.