The demand for alternative fuels is expected to increase rapidly amid rising diesel-petrol prices. The government is also promoting vehicles with flex fuel engines, including electric vehicles. This will increase the demand for ethanol, which is affecting the movement of many stocks. One such stock is Praj Industries which is directly benefiting from these changes.
In the changing circumstances, the stock has delivered multibagger returns in the past one year and more than doubled investors’ money. The brokerage house is still showing bullishness in this stock.
Share price increased so much in one year
A year ago, on 06 April 2021, the share price was Rs 188.60. At present its price on NSE is Rs 395. In this way, the stock has given a return of 109.44 per cent in the last one year. If an investor had invested Rs 1 lakh in this stock a year ago, his money would have more than doubled to Rs 2.10 lakh today. If we look at the record of the last five years, it has traveled only from Rs 80.80 to this point and during this time it has increased by 389 percent. So far this year, it has increased by about 17 percent.
It is noteworthy that Praj Industries is gaining traction from the grain based distilleries business. The government is allocating more food grains to make ethanol, which will further benefit the business. On the other hand, the rise in crude oil prices has led to a rise in diesel-petrol prices. This will widen the gap between petrol and ethanol, making ethanol blending more profitable. All these conditions are favorable for Praj Industries.