Praj Industries surges 8% on developing eco-friendly bitumen

Shares of Praj Industries moved higher by 8 per cent to hit a new high of Rs 356.80 on the BSE in intra-day trade on Tuesday after the company announced that Circular Biobased Delta has approved Praj’s Bio-bitumen samples processed from purified lignin, as a part of their flagship CHAPLIN program. The Netherlands-based Circular Biobased Delta is one of Europe’s premier consortia to promote bio-economy.

Lignin is one of the co-products resulting from the second generation ethanol plants, paper-making and also from compressed bio-gas plants. Bitumen is a black viscous mixture of hydrocarbons produced by fractionation of crude oil and has wide applications in road construction and roofing as a binder.

Praj has now developed a proprietary process (under patenting) to convert the crude lignin into Bio-bitumen which has the potential to replace this fossil-based bitumen and offer eco-friendly green bitumen. The binding and viscoelastic property of Bio-bitumen makes it useful for applications in asphalt.

Circular Biobased Delta (CBBD) facilitates cooperation between knowledge centres, public authorities and industry to grow usage of biomass as a raw material in the chemical, construction and packaging industries. Under its flagship program CHAPLIN, it aims at stimulating the development and commercialisation of Bio-bitumen as a binder for use in asphalt so as to improve the greening approach in road construction while reducing CO2 intensity, the company said in a press release.

The stock price of Praj Industries surpassed its previous high of Rs 351 touched on May 11, 2021. In the past six months, the stock has zoomed 360 per cent as compared a to 14 per cent gain in the S&P BSE Sensex.

The company reported a robust performance for the quarter ended March 2021 (Q4FY21) with its consolidated net profit more than doubling to Rs 52 crore, on the back of higher operating income. It had reported a profit of Rs 24.86 crore in the year-ago quarter.

The company’s income from operations during the quarter under review jumped by 91 per cent year-on-year (YoY) to Rs 567 crore from Rs 296 crore in the corresponding quarter of the previous fiscal. Earnings before interest, taxes, depreciation and amortisation (EBITDA) margins improved by 233 basis points (bps) to 13.21 per cent from 10.88 per cent in Q4FY20.

The company said order intake during the quarter stood at Rs 650 crore. The consolidated order backlog as of March 31, 2021, was at Rs 1,748 crore (FY20 order backlog at Rs 1,083 crore), which comprised 85 per cent domestic orders and 15 per cent international orders.

At 12:45 pm, the stock was trading 6 per cent higher at Rs 350 on the BSE, as compared to a 1.3 per cent rise in the S&P BSE Sensex. A combined 5.2 million equity shares had changed hands on the counter on the NSE and BSE so far.

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