Praj Industries' impressive quarterly results sent the scrip spiraling to its 10% ceiling at Rs 44.10 in early trades on Monday.

By 9:58 IST, the scrip of the ethanol fuel engine maker recorded a volume of just one shares on BSE. At that point, the total outstanding buy position on the counter was 1,000 shares.

On 17 April 2003, Praj Industries unveiled both its fourth quarter as well as full year results for the period ended 31 March 2003.

For Q4, the company recorded a 75% rise in net profit to Rs 1.52 crore compared to Rs 0.87 crore in the corresponding period of the last year. Net sales increased by 89.5% to Rs 35.57 crore from Rs 18.77 crore in MQ 2002.

For FY 2002-03, the company posted a massive rise in net profit - Rs 3.35 crore (Rs 0.22 crore). It recorded sales growth of 29% to Rs 87.98 crore (Rs 68.25 crore).

But the results for FY 2002-03 were still off analysts' targets. Following the company's healthy order book and the improved prospects for its products, analysts had expected the company to show a net profit of Rs 4.7 crore in FY 2002-03.

The company is expected to do well in the current year, aided on by the government's announcement that petrol will be blended with 10% ethanol on a nationwide basis in about two years in order to reduce the country's dependence on imported crude oil.

Oil companies have already started blending ethanol with petrol. Earlier there were reports that oil marketing companies Indian Oil, Bharat Petroleum and Hindustan Petroleum may also blend ethanol with premium fuels after testing it with regular petrol.

Meanwhile, from January 2003, it has been made compulsory for petrol stations to sell petrol with 5% ethanol in nine states. The states include the highly industrialised Maharashtra and Gujarat, and the relatively well off Karnataka, Punjab and Haryana. All the nine states together consume 60% of oil products sold in India.

Praj Industries designs, manufactures, and supplies engineering projects for fuel ethanol plants. With the government's announcement that oil marketing companies should compulsorily blend ethanol with petrol, the company will prove a major beneficiary.

In fact, in India, there has been a sudden rush to set up MSDH (Molecular Sieve Dehydration) fuel ethanol plants, following the government's decision to blend ethanol to the extent of 5% with petrol.

Praj has a licensing arrangement with Delta-T Corporation, a global alcohol processing solutions major, for its MSDH (vapour phase) technology for production of anhydrous alcohol, i.e the high purity ethanol used for blending with petrol. Based on this technology, Praj has set up two fuel alcohol plants in the country - the 40,000 litres per day facility at Balrampur Chini Mills and the 30,000 LPD unit at Shri Dutta Sahkari Sakhar Karkhana in Shirol (Sangli, Maharashtra).

Praj is now putting up alcohol plants for Kothari Sugar & Chemicals at Tiruchi (Tamil Nadu), Shree Tayasaheb Kore Warana SSK at Kolhapur and Vaidyanath SSK at Beed (both Maharashtra). It also holds orders for commissioning fuel alcohol plants of larger capacities of 1,20,000 LPD from Australian Biofuels at Queensland and 60,000 LPD from Presscane at Malawi (Africa).

Almost 60% of India's alcohol production comes from Praj's plants and over 150 installations are operating on the company's technology. Praj's domestic to international order book position is roughly 60:40 and the majority of it will be executed in the current year.

As on 31 March 2003, the promoters held a 52% (48%) stake in Praj Industries.