Industrial gas supplier Praxair Inc’s (PX) Indian subsidiary, Praxair India Private Limited recently announced its plan to construct a 300 ton daily capacity air separation plant in western India.
The company’s new state-of-the-art plant will be located in the industrial corridors of Pune-Mumbai, roughly 60 kilometers from Mumbai and is expected to come online by the end of year 2012.
Praxair India will supply liquid oxygen, nitrogen and argon to customers in the states of Maharashtra and Gujarat; a rapidly developing center of automotive, pharmaceutical and general manufacturing industries. Other growing industries in these western Indian states include chemical, food processing, textile, glass and aluminum.
The company’s other major projects in India comprise, namely, the construction of a facility to supply gaseous hydrogen and nitrogen to Indian Oil Corporation at Paradip, Orissa, apart from two major air separation plants for SAIL at Bhilai.
Praxair India has a solid customer base including Tata Steel, JSW Steel, Steel Authority of India (SAIL), Saint-Gobain Glass, Haldia Petrochemicals, Jindal Steel & Power Limited, Hospet Steel, Usha Martin and others.
Praxair aims to achieve annual organic sales growth in the range of 8%-12%, with emerging markets, including South America, Asia, and Mexico, accounting for an estimated target of 45% of total sales by 2015.
The current Zacks Consensus Estimate for the third quarter is $1.39, representing a year- over-year increase of 14.88%. Estimate for the fiscal year 2011 and 2012 is $5.48 and $6.22, reflecting annual growth of 15.53% and 13.66%, respectively.
The company faces stiff competition from its rivals like Air Products and Chemicals Inc. (APD) and Airgas Inc. (ARG). We currently maintain a Neutral recommendation on Praxair.
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