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A couple of days after announcing a supply contract with Usha Martin, Praxair Inc’s (PX - Analyst Report) subsidiary in India, Praxair India Private Limited declared expansion of its contract with JSW Steel Limited.

According to the terms and conditions of the contract, agreed upon by the two parties, Praxair India will supply gaseous oxygen, nitrogen and argon to JSW’s steel mill located in Tornagallu, Bellary in the state of Karnataka. A new air separation plant with oxygen production capacity of 1800 tons per day will be built at Bellary’s new unit and operated by Praxair. In addition, nitrogen, roughly 1600 tons per day, and argon will also be supplied to the customer by the new plant.

JSW Steel Limited, a part of the O.P. Jindal Group, is the largest private sector steel manufacturer in India considering its installed capacity. Praxair’s association with JSW Steel is about 15 years old. Currently, Praxair has plants with combined installed production capacity of 6800 tons per day of oxygen operating at JSW’s steel mill in Bellary.

We find long-term growth prospects quite bright for Praxair, as series of plant start-ups and contract wins signify the growing preferences among customers for Praxair’s world class technology, high quality products and gas supply services.

Praxair is slated to release its fourth quarter 2012 financial results on Jan 23. The stock currently bears a Zacks Rank #4 (Sell).

The current Zacks Consensus Estimate for the fourth quarter of 2012 is $1.38, representing a year-over-year increase of 1.2%. Estimates for 2012 and 2013 are $5.57 and $6.16, reflecting annual growth of 2.5% and 10.7%, respectively.

Other stocks in the industry performing better than the company are Arkema S.A. (ARKAY) and BASF SE (BASFY), both with a Zacks Rank #1 (Strong Buy), and Air Products & Chemicals Inc. (APD - Analyst Report) with a Zacks Rank #2 (Buy). Air Products & Chemicals is slated to release its first quarter of fiscal 2013 results on Jan 23. The Zacks Consensus Estimate for the quarter is $1.29.

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