Ladies and gentlemen, good day and welcome to the Praj Industries Limited [Q4] FY 2022 earnings conference call. As a reminder, all participant lines will be in listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touchtone phone. I now hand the conference over to Mr. Anuj Sonpal from Valorem Advisors. Thank you, and over to you, Mr. Sonpal. Thank you. Good afternoon, everyone and a very warm welcome to you all. My name is Anuj Sonpal from Valorem Advisors. We represent the investor relations of Praj Industries Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings conference call for the fourth quarter and full year financial year ended 2022. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Now let me introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. Because we have with us Mr. Shishir Joshipura; CEO and Managing Director. We also have with us Mr. Sachin Raole; Chief Financial Officer and Director of Resources. Now I request Mr. Joshipura to start with his opening remarks. Thank you, and over to you, sir. Thank you, Anuj. Good day, everybody. I welcome you to Praj Industries earnings call for quarter four and FY22. First, all of you had the opportunity to go through the analysis presentation for the quarter that ended March 31, 2022. I hope you and families are still keeping safe and healthy. Let me now briefly take you all through the quarterly business highlights and industry developments, following which, Sachin Raole will take you through the financials. The year has witnessed rising global awareness about energy security and low carbon intensity energy footprint across economies. Biofuels are finding increasing market traction across the globe. This is also evidenced in the speech of the Minister of Petroleum and Natural Gas, Shri Hardeep Singh Puri, during the World Economic Forum, Davos, earlier this week, where he laid special emphasis on transiting to a different energy mix for the country for production and use of biofuels from alternative sources as well as green hydrogen. As the world economy recovers from pandemic and geopolitical disturbances in Europe, we see a gradual return to normalcy of opportunities in international markets. A big movement for biofuels and waste-to-energy across the world is creating a positive opportunity for Praj. Capacity addition for production of ethanol in India on the back of the advancement of E20 target to 2025, 2026, continued its momentum. Currently, the ethanol blending in petrol in India has reached nearly a 10% mark and we are certain that India will reach E20 target as planned. Cabinet has approved amendments to the National Policy on Biofuels 2018 to advance India's ethanol blending target. The amendments approved include allowing more feedstock for production of biofuels, advancing ethanol blending target of 20% with petrol by five years to 2025-2026 from 2030. The amendment also allows granting of permission for export of biofuels in certain specific cases. The year witnessed a very strong execution of the order book despite challenges posed by ever-increasing commodity prices coupled with challenges of supply chain disruptions and availability. We were able to leverage our strong project management capabilities and capacities efficiently, as reflected in our improved asset turnover and return on capital employed. We managed to scale up the operations significantly without affecting the working capital cycles. Our bioenergy business continued its strong performance with a healthy order book exceeding INR 900 crores in this quarter. Around 2/3 of these orders are from ethanol based on press mud feedstock. I'm happy to share with you that nearly 30% of these orders are based on our new technology offerings. On international front, we are beginning to see good momentum building for setting new capacities for ethanol production. With low-carbon ethanol theme picking up in the United States and some other markets, our ability to customize the solutions for reducing carbon intensity in operation will put us in a strong position to address this emerging opportunity. We are strengthening our reach in international markets by enhancing our presence in Europe, South America, and North America. We have formed a focused O&M business unit that will serve customers post-commissioning of the plants through the life cycle. Offerings such as performance enhancers, carbon dioxide capture solutions, and O&M services will help customers address their productivity, environmental, and performance problems. On the 2G front, execution of the IOC project has progressed up to 90% completion level. Plant will commence commissioning from quarter two of this year. The war situation has pushed back the development of 2G projects in Europe by at least six months. Even as we continue to engage with customers in Nordic region for deployment of CelluEnergy technology, the new dynamics of energy management are likely to shape the demand for biofuels in Europe favorably. On the CBG front, in a much-awaited development, government has revised the CBG prices from INR 46 per kg to INR 54 and indexed it to the price of CNG. This will certainly enhance the financial viability of the projects. I'm very pleased to confirm that we have successfully commissioned two projects based on press mud. The development on rice straw to CBG project at Badaun site continues and we expect to commission this in quarter two of this year. The new pricing policy is expected to revive the interest from the industry wanting to set up CBG capacities. As for the engineering and PHS business, we continue to see momentum by way of healthy order book and improving inquiry basket. On the CPS front, business has built a robust order book and a healthy prospect base. Our strategy of working with select global customers in clean tech and green tech field, such as green hydrogen and waste to energy, is showing very promising results. Modularization is fast gaining acceptance with global customers and is clearly emerging as growth engine for the business. Almost 1/3 of the overall order booked in the quarter was for modules. To meet the increasing demand for CPS business, we are also adding capacity at our Kandla factory. On the brewery front, hospitality and tourism sectors are slowly picking up, and beer consumption is reaching pre-COVID levels. With this, many brewery players are now considering their plans to set up new greenfield projects and capacity enhancements. Many MNCs and local players are also looking to execute new product launches in flavored beer and non-alcoholic beer segments. Zero liquid discharges continues to enjoy traction in our markets of interest such as metals, chemical, fertilizer, et c.. On the PHS business front, our strategy of focusing on complex injectable and vaccine manufacturers has found good traction and acceptance in the market. As the Indian pharma industry turns into global-sized capacity building biopharma space, we expect fermentation technologies to acquire center stage. Leveraging the parent organization's prowess in fermentation and HPS's deep understanding of sterile applications, we expect positive development on the business side. R&D program. In charge, Matrix, is progressing as per the timelines and metrics. From the technology readiness point of view, two projects have satisfactorily crossed the bench scale development milestone. On the concerned front, continuously rising raw material prices coupled with supply chain uncertainties continue to pose challenges and pressures on margins. The recent announcement, the government on the steel front, may help reduce some of the volatility and uncertainties on the pricing front. However, several geopolitical factors will impact the pricing level of commodities and it remains to be seen if prices and stability will return to pre-COVID levels in near future. The resulting pressures on margins from the above situation calls for several actions at our end to create a counterbalance. Our dynamic costing model coupled with strategic sourcing, digitalization of processes, and actions on standardization is expected to help us address these challenges. Overall, our business environment for our core businesses as also for offerings in clean tech and green tech space is developing favorably, and the phenomena of energy transition being witnessed in several economies makes us believe that our business will continue to see positive traction across different business segments. I'm happy to share that during the Global Flagship Industry event, the Advanced Bioeconomy Leadership Conference 2022, at Washington, D.C., USA, our Founder Chairman, Dr. Pramod Chaudhari, was bestowed with the coveted 2022 William C. Holmberg Award for lifetime achievement in the advanced bioeconomy. This is the first occasion when this award has come outside of the United States and that too at a time when India is celebrating the Diamond Jubilee of Independence. With this, I will now hand over to Sachin Raole for his comments on the financial performance. Thank you, Shishir Joshipura. The consolidated income from operations stood at INR 829.01 crore in Q4 FY2022 as compared to INR 567.10 crore in Q4 FY 2021. PBT for the quarter stood at INR 78.05 crore as compared to INR 73.19 crore in the corresponding period of the last year. Profit after tax stood at INR 57.65 crore in Q4 FY 2022 as compared to INR 52.01 crore in Q4 FY 2021. For the full year ended March 31, 2022, income from operations stood at INR 2,333.32 crore as against INR 1,304.67 crore in FY 2021. PBT stood at INR 204.88 crore in FY 2022 as against INR 113.11 crore in FY 2021. PAT for FY 2021 was INR 81 crore, and in FY 2022 it is INR 150.25 crore. Margins for the quarter has seen a reduction of 5.5% on account of continuous increase in commodity prices and adverse sales mix. That is the higher domestic sales versus international. During the year, we have also executed first of its kind projects in a couple of new technology areas which carried lower margins as compared to mature businesses. Export revenues accounted for 21% of FY2022 of the total revenue. 71% is from bioenergy, 20% from engineering, and 9% from PHS business. The order intake during the quarter was INR 1,101.5 crore with 84% from domestic market. Of the total order intake, 91% came from bioenergy, 6% from engineering, and -4% from PHS business. As compared to the last year, export orders intake has seen 37% growth. There were INR 679 crore orders from the international market in the current year as compared to INR 495 crore in the last year. The order backlog as of March 2022 is at INR 2,878 crore, comprising of 86% domestic, and out of which 75% is from bioenergy, 20% from engineering, and balance 5% from PHS business. Cash in hand as on March 31 stood at INR 623 crore. As mentioned earlier, some of the projects at Matrix have reached a bench scale, and investment is being considered in the demo plant to take the product development program ahead under the RCM program. The board of directors proposed a final dividend of INR 4.20 per equity share. That is 210% of the face value of INR 2 per equity share for the financial year ended March 31, 2022, which is subject to the approvals of shareholders at the forthcoming annual general meeting. This comprises a final dividend at the rate of 135%, plus a special Amrit Mahotsav dividend at the rate of 75% in commemoration of 75 years of independence. With this, I will conclude my remarks. Thank you all for joining, and we should now be happy to discuss any questions, comments or suggestions you may have. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use hands-free while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Gaurav Chopra from Union and AMC. Please go ahead. Hi, Sir. Congrats on a great set of numbers and thanks for taking my question. My question was on the margins front. You know, if you can sort of you know, our order book is fairly strong at INR 2,800 crores and last quarter, we had talked about that the incremental orders with what we are sort of taking accounts for you know, higher raw material prices. Qualitatively, if you can guide us whether we should be there at double-digit EBITDA margins in fiscal 2023. If not, why? If you can you know, give us broad guidance on that front. Okay. The orders which we mentioned in the last quarter, that they are coming at the higher, considering the higher raw material prices, t hat's true. They are not yet coming to the execution stage. They will start coming up maybe from quarter two once the initial phase of engineering is over for those projects. Second thing, the increase which has happened subsequent to that also, especially in the month of February and March, that was absolutely over and above what we had seen in the last three quarters also. That was the additional burden which has come in the current quarter, and to some extent on the orders which are under execution, where the orders for the raw material was not placed. That's the margin pressure which we have seen. The way in which now commodity prices have started showing little bit a downward trend, we expect that, yes, the pressure will start coming down, and we will see a reflection of that, not necessarily in the first quarter but we will be seeing maybe from the second quarter onwards. Got it. You know, broadly, if you can, you know, think about fiscal 2023 as a whole, is double-digit EBITDA margins is a stretch or, it is possible with the current scenario? Gaurav, I will not be able to give you the number per se but we can see, I mean, that's the endeavor of ours, that we will see the improvement in the margins, and that's the efforts which we are going to put in. I would not be able to give you a direct answer to your question whether it will be double digit or not double digit. Got it. Secondly, you know, in the order intake what we have in the quarter, we have seen a 15% decline in the high-purity segment. This segment is, you know, we were talking a lot about, you know, getting incremental orders from the pharmaceutical side and everything but it seems to be not picking up. Any particular reason, and is it expected to pick up going forward? Any color on that? The PHS order book on its own is definitely increasing. In the overall, if you look at in terms of percentage, it looks like it is lower because the overall volume is very big. Otherwise, they are having their own order book. Rather, this is the eighth quarter that they are continuously maintaining their streak of more than INR 40- INR 45 crores kind of an order book in every quarter. For PHS, the order book actually is growing in relative terms because the bioenergy business is growing at a much faster pace. In a relative term, it may look less, but PHS by itself is not degrowing. It is actually growing fast. Got it. I might be looking at some wrong numbers. I, you know, I thought it was a 15% decline on a YY basis in terms of order intake. No, no. If you are looking at the absolute total number, no? Naturally the percentage-wise it is less. As we, Shishir mentioned that bioenergy number is, was on a very high side. Got it. Within our mix, the number is looking smaller but absolutely within their business relatively, they are growing. Okay? If I can clarify it. Got it. Okay. Okay. Thanks for taking my questions. Thank you, Gaurav. Thank you. The next question is from the line of Lokesh Maru from Nippon India AMC. Please go ahead. Hello, Shishir, sir. Hi, Sachin, sir. Congratulations on fantastic numbers. I have three questions. One is in continuation with what I had also asked last time on the macro front within the ethanol space. That whole, like, installed capacity in India has reached 850 crore liters like you mentioned and out of which 67% is sugar-based, 33% is grain-based. We are right now blending somewhere around 10%, right? And given the push towards 20% blending, how much do you think would be the targeted capacity to achieve that 20%? Is it like INR 1,500 crores or so? Is it fair to assume that? Lokesh, just to answer this question. We will need a delivered number of about 1,400 crore liters to reach the 20% margin. 14? A 20% blending. Sorry. If you look at that number that means that installed capacity will have to be around 1,900 crore, you know, because this is a seasonal production number as well. Right. The installed capacity will have to go to 1,900 crore liters and the delivered capacity out of this, we expect over 1,400 crore or in that range. Yeah. Because. Sir, the values have jumped from 850 to 1,900. Is that right? Roughly about. Yeah, that is correct. Of the 1,400 crore that we said, now I'm talking of the need at the country level, then about 1,000 will come to the blending program and about 400 will go to other applications. Right. Okay. That leaves us with, actually, is it fair to assume for a small program that leaves us somewhere around 20,000 km per year additional installations to go forward in next four years period. Right? My next- Sorry, I couldn't get your number to KMP. Sir, that would mean somewhere around 20,000 KLPD of installations in next four years. A 20,000 KLPD. A 20,000 looks like, I don't know from where you got to that number. Yeah. That includes an assumption of, you know, 3.3 crore liters being delivered. That's correct. Roughly correct. Yeah. Yeah. Sir, at an industry level, how much revenue potential does that mean? Well, you know, this question has been asked many times. We have tried to explain. It depends. The scope of work that depends on multiple factors. Number one, what's the feedstock? Number two, if it's greenfield or a brownfield. Number three, if it's greenfield, is it a relocated project? Four, what is the scope of work? To put a fixed number out on this capacity becomes very, very difficult for us to locate. You know, it's not easy because there's too many variables there for us to say. You know, somebody can debottleneck an existing capacity, change the feedstock. There are many dimensions by which an ethanol capacity for us can go up. It's a tough number for us to calculate, to say, "Okay, you know, this means so many INR crores of pieces of opportunity." Right. Sir, on the same, since our order inflows have also been very strong, so we are maintaining what kind of market share as per your calculation? We are maintaining our market share. As we have indicated in the past, we don't see any reason for any market share change to happen in our business as of now. It's just that as I had mentioned last time, it is around 60% and we had mentioned that we are seeing a shift of feedstock from more sugary-based feedstock to more starchy feedstock and that's also been borne out by our order book in the last quarter. Yes. Sir, out of the 850 crore installed in India, does that mean like we have always been maintaining between 50%-60% market share? Does that mean we have installed 50%-60% of this 850 crore liters overall in India? That is correct. Great. Thank you, sir. My last question and I will join back with you. Last quarter have definitely been volatile like you had already mentioned. Just if you can throw some indicative gross margins for projects you would have signed this quarter till date for April and May till date as in we had somewhere around 37% gross margins for last quarter. Anything, any number that you can indicate for recent contracts that we have signed? Sorry. Okay, t hat's something that I'll have to disappoint you because we will not be able to give that number out. Sure, sir. Okay. I will join back with you for more questions. Okay. Thank you. Thank you so much. Thank you. Thank you. The next question is from the line of Amish Kanani from JM Financial. Please go ahead. Yeah. Hi, sir. Congrats on a reasonably good performance on the top line. So my question is, you know, one, I understand, you know, you don't want to guide us on the quantum of, you know, margins both at maybe gross margin or EBITDA margin. But sir, you know, for our understanding of, you know, where we are headed, if you can give us some sense of, you know, what will be your, you know, ideal target, say, you know, when things normalizes, in terms of, you know, we have now on a quarterly basis, our gross margins have been, you know, moving from 40% to 37%. You know, EBITDA margin in that context, we have been able to do on an annual basis a reasonable job, you know, and it's dipped but not as much as gross margin. The question, sir, is at a steady state basis, you know, is it possible to give us some sense of, you know, where we would like to. Our operation, you know, has increased in terms of operating leverage is kicking in. If you can give us some sense of where, you know, we would like to stabilize either, say, a gross margin or a EBITDA margin, say, six or nine months down the line or maybe on an annual basis, that'll be helpful. That's question number one. In that context, sir, I saw, you know, employee costs have not increased as much, you know, and because of which, at least our EBITDA margins have been supported. You know, if you can give us some sense there, you know, because we understand in that space maybe, you know, there could be some inflation there as well. If you can give us some sense there. Okay. Amish, your question that way is very, very idealistic, that if the situation is ideal, then what will happen? Let me just try to figure this out. We have always maintained that our gross margin should have been better than what we have reported for a reason. Of course, we have seen the dipping because of the raw material prices or the commodity prices behaving the way in which they have behaved. To some extent, I have already said that if over a period of next two quarters, we will see some kind of a normalcy returning to, the commodity prices and helping us on the gross margin. Another aspect which we have always maintained that the volume is going to give us some kind of a leverage. To some extent, you have also answered that question when you said that employee cost has not gone up in tandem with the top-line growth which we have seen. Two aspects are going to play according to us. One, the commodity prices coming to some kind of a normalcy. Second, the way in which we have seen the leverage is going to kick in is going to give us benefit on the EBITDA margin. What that EBITDA margin will be in the absolute term, unfortunately, from a guidance point of view, we have a practice of not giving those kind of a numbers, so I will not be able to spell out the number. We will be able to see in a normalized scenario a very different kind of an EBITDA margin. Definitely, let me tell you, yes, it will be in a double digit. Okay, sir, that helps. And sir, in terms of, you know, order book pipeline, you know, we have done a wonderful job in getting new orders, and you did mention, you know, there was some disappointment at least on the international side, on the European side. If you can give us some sense of, you know, how is the outlook on the order book pipeline and/or, you know, actual accretion. Because last two quarters there have been a decent run rate of INR 900 crore-INR 1,000 crore. Our old run rate was more like INR 500 crore-INR 700 crore. You know, annually and/or, you know, some sense of pipeline, you know, if you can give us some sense. Amish, in the whole year, we had a 37% growth in the international business. You know, I mean, I can share with you that maybe we are fortunate in India, we are not seeing some of the economic impact of pandemic on those. When you go to some of these places, they took much longer. I've said in the past as well that different economies have a different challenge to overcome because of the way the pandemic impacted everybody globally. Some markets have opened later, some have opened earlier. We are among the earlier parts, but maybe there are lots of parts of the world where markets have opened later, number one. Number two. They are opening now, which is important. Number two, as I mentioned in my opening remarks, we are seeing a movement for on the biofuel side, that a lot of economies are clearly making strategies to make biofuels and/or low carbon intensity of operation for their economies a priority. Biofuels have a very important role to play there, which is what you will see unfold as we go forward. This is second part. Third is the war in Europe has definitely put a bit of a, what I'll call a shift of timeline. Because of this war that broke out on the front, it obviously meant that the risk profile of the funding et cetera changed. It is our estimate that this has pushed the projects on the advanced biofuels by at least six months from a funding perspective. They'll recover in the time to come, but right now we see a clear six-month shift that is happening on that front as well. Not that the projects have gone away or anything like that. It's just that the whole process gets delayed because the risk profile and analysis of that completely changes. From that perspective, I think we are looking at different dimensions here in terms of what's happening in international work. On the other hand, as I was mentioning, we are seeing a revival of economies. Brazil is beginning to open up. We are going to commission our first plant there by end of this year. That will change a lot of dimensions for us. I was talking about United States, where focus will shift to in reducing operations to low carbon intensity. Many of these positives will start building up in Bristol as we travel through the year. I'm very sure that the international business is we are just beginning to see the return of the international business. In a year when there were difficult times ahead, we were able to show 37% growth on our order book. I'm sure that we will look at even more positive times. There's a big focus coming on clean tech, green tech, green hydrogen. All of these are positive drivers for our business in the international. Sir, in terms of pipeline, domestic pipeline, last year this time versus, you know, this time, is it gone up significantly? Looks similar in terms of nature? Assuming that, you know, our market share remains same, you know, how do you see our pipeline at this point in time versus the last time? Continues to be robust. Absolutely no reason to be alarmed on that front. In fact, it continues to build positively from where it was. I think, you know, we will continue to see a traction. Okay. I have a few more questions but I'll get back into queue. Thanks. Thank you, Amish. Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants, we request you to please limit your questions to two per participant. Should you have any further questions, you may please join the queue back. We have the next question from the line of Jay Shah from PhillipCapital PMS. Please go ahead. Hello. Congratulations on the good set of numbers, sir. Sir, I just had a broader question on what are the developments if you can share in the RCM division. Also if you can put some light on what exactly is happening in the country or even globally in terms of you know using hydrogen as a fuel. Like where as a company is Praj you know playing a role in helping to get hydrogen made into mainstream? You'll see this hydrogen being mentioned with some color prefixes, you know, gray hydrogen and the blue hydrogen, and then there is green hydrogen and things like that. Yes. The color indicates the source of hydrogen actually, or what's happening to it, right? The push is for green hydrogen globally. There are two things. One is the refineries themselves are big consumers of hydrogen actually. They need large quantities of hydrogen. In order to meet their demand, the currently favored and tested technologies about electrolyzers using water and a combination so that you can and use a renewable source of energy for power generation, like solar or wind, and that allows you to create green hydrogen. When these projects are put up, it also has what I would call as a need for the whole plants to be set up where you can make this process happen. We call it the clean tech and the green tech space, where our CPS business has a very major role to play because they are, you know, aligning themselves with several leaders in the world in this business and as an engineering and manufacturing partner for these projects because they need large amount of modularized plants, et c.. That's one part of the business. The second part is the green hydrogen will also have a dimension around hydrogen produced from biomass resource and that's still under development. Right now we don't see what I would call as a need for, not a need but an ecosystem in place for hydrogen to be used as a transportation tool, not yet. It is still under experimental stages. On the industrial side of the use, obviously there are clearly established processes where hydrogen is being used. That is still work in progress, as far as utility is concerned in form of a, as a transportation tool for hydrogen. I hope that I have answered your question. Was there another part of the question before this? Yes, sir. Is there any new development that's happening in the RCM division, sir? RCM. Yes. As I think, Sachin mentioned in his remarks that we have two important programs that are now past the bench scale development, and they'll go to pilot scale now. That is something that we will do this year. We'll talk about it when the time comes to commercialization. It's progressing as we had planned. It's not reached the commercialization stage yet, but when it reaches, you will hear about it. Okay. Thank you so much, sir and all the best, sir. Thank you. Thank you. The next question is from the line of Prathamesh Sawant from Axis Securities. Please go ahead. Yeah. Hi, sir. Congratulations on great set of numbers. My question is regarding the recent announcement of government regarding the capping of the sugar exports. Do you see any impact of this news on your company, sir? Yes. What is actually being said is, don't produce sugar for export and this is fundamentally the method according to me and divert the sugar to production of biofuels or ethanol in this case. A lot more sugar is now available as feedstock. I think that's a key question because one, at some stage in time we'll also be asking questions around saying what's the feedstock availability but this makes available a large quantity of sugary feedstock for conversion to ethanol. I think that's a very positive move because we clearly see that as a sign from the government to the industry that they need to move their product mix in favor of ethanol, which is also good for the industry by the way, because if you see the results of any of these sugar companies as they've been announcing, for a much lower portion as a percentage of revenue, the contribution to the bottom line from ethanol is much higher, disproportionately higher from ethanol to their businesses. I'm sure they're also happy customers in this. Okay. Sir, can it be interpreted the other way whether the company, the government wants it for food protection? As in the idea for this announcement was protection of food protection for the domestic consumers. Later, do you see any fear of, you know, food versus fuel debate coming ahead from this again? Well, no, because if you look at sugar, we already have excess sugar production, so it's not that it is deficient and therefore it needs to be met. It's already excess. After what we've exported, there is still excess sugar left. We are in a very different situation as far as sugar production is concerned. I clearly see. I mean, I'm not here to contest what government's thinking or w hat I'm saying, what's the likely implication of this action. I'm sure they have their own reasons to announce what they announced. We read this as this kind of an impact coming up. It's a very positive impact for us. Okay, sir. My second question is regarding the CBG front. Any development on it, given that now you are going to go with some government body to talk against the lift, the government decision that they had withdrawn the subsidy. Any development on that? Given that the CBG prices have been revised, what's the kind of IRR and are you seeing any new interest from the CBG front? Yes. This is a very positive development that now the CBG prices have been revised and that they're indexed to CNG prices now, which is very positive development. I still believe that there's a lot of scope for improvements of viability of CBG projects because of the simple fact that my logic is why should a low carbon, higher efficiency, higher calorific value sell for a price less than its, what I would call as a high carbon, low calorific value counterpart? There is no logic. From that perspective, I think CBG has a lot more scope available for price adjustment, of course. Having said that, there is no change as far as subsidies are concerned. The move right now to index it to CNG price itself is a very positive. We are already beginning to see some inquiries now emerging, where people are saying, "Okay, we want to consider this favorably." Okay. Sir, lastly, is there any seasonality when in our order book, as in, like, Q4 usually have a larger order book? Can the large order book, new orders this quarter, be explained with that? Or is it just that they are having higher inquiries in general and the overall business is booming in general? I would not necessarily put quarter four to be a high quarter. There is some seasonality in our business, but that's not the way we see it. In fact, I use the word very very with great caution, the democratization of the feedstock that has taken place on the small production actually has evened out this seasonality, which earlier was very sugar season-based, which of course is a seasonal crop. With starchy feedstock coming in, there is no seasonality. This is actually a good thing. Much less seasonality dimension, although it is still there to some extent, but not to a great extent. We can expect this kind of a new order book growth in the coming quarters ahead also? Well. Hopefully. As they say in Hindi, Thank you, sir. Sure, sir. Thank you, sir. That's it from my end. I'll get back to you. Thank you. The next question is from the line of Bharat Sheth from Quest Investment Advisors. Please go ahead. Hi. Good afternoon, Shishir and Sachin. Good afternoon, Bharati. Good afternoon, sir. How are you? I'm fine, sir. How are you? Sir, on this CBG plant, how many demo plants so far we have installed and how we were expecting, say, success of new order or based on the plant which we have set up? How those are running, and if you can give some color? Second question on, in your initial remark you said that we are working on the supply, I mean, after plant set up, I mean, maintenance as well as carbon capture. More specific on carbon capture, what kind of, I mean, technology are we using? Is it your in-house or outsourced carbon capture technology? Bharat, I had mentioned that we are starting a focus. You know, we've been very focused on the capital side of our customers' businesses. But we realized, and we did have a business unit or an offering in the market which was on the revenue side. But we are now consolidating that as a focused business unit to start off to keep solutions offering to customers as they start operating their plants. That could come in form of performance enhancements. You know that the fermentation process actually releases a lot of biogenic CO2. We are also offering customer solutions to capture this CO2 using our technology. Because that is biogenic, in the sense that is a clean CO2. Then there are applications on food grade and medical grade and, you know, all those industrial grade stuff. Those can be further modified. We do have our own technology for that purpose. That is how we are doing this. On the CBG front that you asked the question. Yeah. We have commissioned two plants completely. They are fully running. Gas is being sold in retail outlets of respective OMCs that we have got tied up there. We will be commissioning the rice straw plant in about three months. I think that's a big event as well because there is no other plant like that what we will be commissioning t hat will happen. That's the third one. Very important, building from there, as I said, we had four plants under commissioning. The fourth one is also going to commission in the next quarter. We will have on press mud, on rice straw, as well as on industrial waste, all three big sources of organic waste covered, which will be then producing the gas from these sources. We are expecting that at the back of this new, as I'd already answered in the previous question, the back of the current new pricing norms, we are expecting increased what I would call as interest from the customers, including from few sugar mills to say how they would go about setting up their new CBG capacity. But there's a lot of scope, as I mentioned earlier, that CBG actually should be a priced fuel and not a regarded fuel. But I think we are moving in the right direction. Over a period of time, I'm sure we'll overcome the deficits as well. On any further update or new, I mean, implementation or order on this jet fuel? As you know that, the world is beginning to see signing of the aviation fuel contracts, especially by some of the global airlines for some initial volumes. That is a first step that is required for production of sustainable aviation fuel. It is just beginning to build as a momentum and maybe when we speak in next quarter, we'll have something more concrete to talk about. The technology is there. The need is there. I think we need to move to a. I think now we are going through this contracting phase for the airlines to buy with OMCs. Probably the next would be then the technology and the investments around it that will happen t hat's the way we see the development happening. Sir, with your permission, can I take one more question? Yes, please. One is on the international outlook, I mean, for this bioenergy and second on the breweries side. Second on the? Breweries. Yes. Yes, Bharat. We don't have data. So what's the- What's the question? Outlook on breweries, because I mean, we were seeing, I mean, last few years is relatively growth is slow pace. Yes. How now this is once again in post-COVID, what the breweries business looks like? We are beginning to see some, as I was mentioning in my remarks as well, that with this summer especially, we know some of our customers are actually facing problem of shortage of supplies. That's a good sign. I think beer consumption is beginning to pick back up, which is good. They are also diversifying to some of the other products, like non-alcoholic beer, you know, the zero alcohol beer and things like that, so which is also more flavored beers. We'll see this market taking positive track as we move forward during the year. Right now, the capacities that were there, that were being put to use have all come into play. I'm sure that looking at the current market response, they will start to look at planning capacity additions either in form of green or brownfield, and we will see that traction build up on the brewery side. The industrial business, again, as I said earlier as well, several countries, not only India, but several countries have realized the importance of actions that they need to do as economies to reduce the climate change impact on their respective economies and therefore the CO2 combat. Biofuels will have a very, very important role to play. We are seeing some good programs building interaction. We have augmented our resources in Europe, in North America and South America to actually go and address these emerging needs. I'm sure that we will see a positive traction develop on that as well. Thank you and all the best, sir. Thank you, Bharat Sheth. Thank you. The next question. Before we move to the next question, I would like to remind the participants to please restrict their questions to two per participant. The next question is from the line of Swarnashish Chatterjee from Aster Capital. Please go ahead. Thank you for the opportunity, sir. My first question is today, most of our business comes from bioenergy, especially from the internal business. Maybe after four-five years when India reaches its potential of 20% blending, what is your next cash flow opportunity? I mean, is it your international business or is there any progress in diesel blending, ATF blending, and what will be our future in five years? Swarnashish, that's a great question. Yes, E20 program will run its course and come to an end in 2025. However, that is not the end of it. Let me just give you two or three pointers. Number one, Brazil which is the leader in this business and in this whole sphere and they have a default blending of 27% and not 20%. That is number one. Why should we not have 27%? That's my question. Second is, currently we are only blending this at petrol level maybe, and we are working on a program, as I said in the past, on diesel blending as well, t hat's the second one. Third, we have heard about the honorable minister speaking about the fact that India needs to have flex-fuel vehicles. If flexible vehicles come into play, then you can run it on 100% ethanol as well. That's the third rule that will come into play. There are many applications, you know, the communication towers that run today on diesel genset, they need not run on that. They can go to methanol genset. There are many of these applications that will start to develop as we go. The key driver is that the focus needs to shift to low carbon intensity operations, and I think that's what all the corporates are now beginning to think about because this is a very, very important step forward. That is what will drive. That's number one. Number two, as I was mentioning, we are seeing very good traction build in the industrial business in several economies around reducing the low carbon intensity, carbon intensity in their operations. Amongst many other solutions, biofuels have an important role to play. Europe already has a regulation on ground. It's just that the war has pushed things by six months. We will have to see how we progress forward on this. As I see it, ethanol becomes a basic building block for sustainable aviation fuel. It integrates in the form of a isobutanol. There are many other equations that as we talked about RCM. Ethanol will become like a basic brick. Actually, if you go one step before ethanol gets formed is the sugars that we separate out from the different feedstocks. That's where things will start to diversify from that state. Today, it diversifies to ethanol. I think tomorrow we'll see it diversify to a different set of chemicals. We'll see it diversify to aviation fuels, and then so on. A very, very vast field is expected to open up backed by the world's need, agreement and determination to move to a low-carbon future. Thank you, sir. I have another question. Sorry to interrupt you, sir. I would request you to please come back in the queue. Okay. Okay, ma'am. Thank you. Thank you. The next question is from the line of Sagar Kapadi from Anvil Share & Stock Broking. Please go ahead. Hello. Congratulations, sir, for such a good set of numbers. Thank you. Hello. Thank you, Sagar. Sir, I would like to know what is our operating, you know, utilization levels? Because earlier three years back, you had told our capacity utilization was 60%. Currently with such revenue, I think we would have reached around 90%-95%. What is that and what will be your CapEx plans going ahead, sir? Great question, Sagar. What we did over the last two-three years is that we actually sat down and we said, "How are we going to execute?" That is what I was saying at the beginning of my remarks as well, that we had a very strong focus on execution because we have a strong order books, and we need to deliver to our customers on time. We have debottlenecked several of our capacities. We have deployed different strategies and they have all worked out well for us not to actually go out and commit ourselves to large capital expense. Without that itself, we have been able to expand our capacities. We have debottlenecked some of our operations. We have developed a very, very strong supplier base, which is helping us to our vendor base that is helping us. This vendor base is now located closer to our customers. We are looking at it from a very different perspective. In a manner of speaking, we are thinking differently to say, how do I make sure that my footprint of CO2 is least, is minimized? There are many, many dimensions on which we are working, which is helping us to overcome this problem. As I see it, we don't see. Our capacity build also have to happen on the engineering side of operations because that's also critical, people that we need. That is something that we have consciously built over a period of time, but we have also used digitization in a big way. We are completely digitizing our operations now, so that our speed of our throughput time decreases and our speed of execution increases, our productivity goes up. We are working on several levers, centralization and other levers to ensure that our execution pipeline is well built, and it's well taken off. I am not losing an iota of sleep over our capability to execute. As you can see from the last quarter itself, yeah, if you see what we've delivered in last quarter of this year, and you just multiply that by 4 x, we are pretty in a very what I would call a safe harbor. Yes, sir. Any plans for further CapEx? You know, we might be at 90%-95% currently. No, don't worry about the capacity so much. As I said that we are debottlenecked it completely, so we will be in a position to. The two things that I was mentioning, I think I'll link it to the answer that I gave earlier. The seasonality of the business has come down. That allows us to more evenly spread out. Earlier, if you see our previous year result, our first quarter will be very small, and then we start gradually increasing. Now, the four quarters are at a more or less similar level, though not exactly the same, but more or less similar level t hat's what we expect. I'm not saying it will be same. It will be growing still, but not with such wide disparity between the first and the fourth quarter. That's helping us to use our assets very well. We have. As Sachin was telling me some numbers which, around our asset utilization, we get some- Four. Four. From four to eight. That asset turnover is now from four to eight, so you can imagine how much efficiency. Mm-hmm. That's great. That's great. Thank you. Yes. Thank you. The next question is from the line of Vipul Sanghvi from Systematix. Please go ahead. Hi. Good afternoon, sir. My question was around, in the earlier question, one of the gentlemen said that, total 20,000 kL per day of distillation would be required, to reach, the 20% blending target. Sir, what kind of, capacity expansion announcements, you see that have already been made, and do you see, a situation where we will overshoot this capacity expansion target itself? I'm just trying to understand what is going to be the supply side of this, you know, this opportunity. Right now, Vipul, we don't have enough capacity. I mean, the country can consume much more than what's being talked about. I think two things have to happen. At some stage in time and maybe by end of next year, and I think that dialogue is already commenced between the government and automotive industries to see how the vehicles as we go forward will get you know, sort of aligned to the need for this high blending ratios. What I'm given to understand is that we will have default E10 across the country starting October of this year. If that is the case, that itself becomes the basic platform on which to build this particular volume. In terms of building further volumes, I think very clearly the path is clear. We see a robust inquiry. I'd said that earlier as well. A robust pipeline of inquiries. There are lots of companies. The freeing of the feedstock is actually inviting lots more companies to come and step in because earlier the sugary feedstocks were basically controlled by the sugar companies, so they would obviously be setting up their own capacities. Now many other corporate and companies are stepping forward. There are pharma companies, there are entrepreneurs, individual entrepreneurs, there are commodity manufacturers. There are many guys who are stepping into manufacture of ethanol now because of feedstock flexibility. We continue to see a very positive traction on that. Sir, you don't see a challenge as far as the availability of the feedstocks for some of these, you know, standalone distilleries? You think we will be able to get enough feedstock? No. Two things. One is we were talking about this ban on sugar exports for some time. That itself will create a what I would call as a need for a new feedstock of sorts. Although it's not new, it's already existing, but an additional quantity of feedstock for ethanol production. On the tariff side also we don't have problem. As I mentioned that when we commission within six months' time, you'll hear it. We'll commission the first lignocellulosic plant in the world based on rice straw. Once that goes on stream, that will open up further feedstocks. Feedstock should not be constraint for us, at least not in foreseeable future. Great. Fantastic, sir. Thank you very much. Thank you. The next question is from the line of Lokesh Maru from Nippon India AMC. Please go ahead. Thanks for taking my question. My question is more on CBG. We have the technology in place, we have the pricing in place. What I believe I heard was a challenge is actually aggregating the straw, getting it to the plants in location, right? If India is eyeing an opportunity of somewhere around 5,000 CBG plants across the country, there has to be some agri organized, clear organized way in which the straw is transported. Sir, your outlook or your view insight on how this ecosystem is going to evolve going forward? That is, I believe CBG is one of the biggest opportunities for us going forward, right? Is that what is your thinking? Yes. It is. I see opportunities going on and very clearly the supply chains will have to be established for feeding of these rice straw which currently gets burnt on the field standing, to collect them, aggregate them, and supply it to the nearby CBG plant b ut I am strong. There are platforms that have now emerged which are facilitating buying and selling of biomass on those platforms. They are making the producer and the customer meet on the platform that we open up. There are already platforms in place. There are policies from certain state governments which are beginning to establish a mini equivalent of mechanism for aggregation of biomass and supplies. I think as the market starts to develop, we'll definitely see. There's already a sort of aggregation in place because there are lots of biomass-based power plants and steam boilers and industries are using it. There is some sort of aggregation that is already available. I'm sure that those experiences would be used and handy when we expand it to a much bigger scale. That is something that will happen. Also, on some feedstock, like for example, press mud from sugar mills or bagasse from sugar mills, the supply chains are already established and local, so in that sense there is no problem. It is all aligning in the right direction, is what I would say. Yes, like you said, if bagasse and press mud are also now feedstock, as the ecosystem evolves, the supply side is, you know, addressed over a period of time. Do you think sugar players themselves are going to be first adopters of CBG because they have their own, so they have this input, the feedstock for these CBG plants. And how are you seeing their reaction when you go to them? What are their reactions on, you know, putting up a plant like this which might utilize the waste they produce? Lokesh, I think I was listening to one of the commentaries of one of the leading customers of ours, and they did say that over a period of time, they see themselves transforming to a multi-product energy product company and not just merely a sugar production company. I think that probably tells you the way the thinking is also evolving and emerging within the sugar mill segment. I think very clearly as we move forward and all we've seen, you know, the sustainable aviation fuel, whether it is RCN, whether it is the iteration of ethanol. We will see a lot more what I would call as focus coming in on from merely a single product. I'm sure sugar industries are well to transit themselves from only sugar to sugar plus power to sugar plus ethanol. I think the next step will be CBG and then there'll be another next step. Okay? Also there'll be many, many things that will help them to actually transit because they will have to become a multi-product. They are realizing the opportunity of a multi-product. The technology will help them. They have the, what I would say, the natural owners of some of these things. We will see. I personally believe that we will enter an era of very positive and constructive development in this segment. Wonderful. Sir, my last question is on unit economics. If you have a CBG plant, what kind of revenue per plant? Like you have installed two already and two are in the pipeline. What kind of sales or revenues are you looking at in these plants which are already installed? Lokesh, there was some disturbance in the line, like a wind noise or something. I couldn't hear your question well. Yes, sir. I think from unit economics point of view, what kind of realizations or, you know, revenue per plant? Like you have already installed two. A two are in the pipeline. What kind of revenues are you looking at, per each plant like? Lokesh, this is completely based on the capacity of a plant and on the scope which we will be undertaking. Feedstock. Naturally the feedstock, because if the feedstock is different, the project cost will be differing as compared to the feedstock. It will range somewhere between, depending on the scope which we will be taking, can range between INR 330 crores and it can go up to INR 120 crores, depending on the capacity and the feedstock. The range is very wide because of the scope and the capacity of the plant and the feedstock. There are 3 parameters. Sure, sir. That indicatively, that gives us a similar opportunity like ethanol, the order book that we are seeing currently. Even this, CBG looks quite equivalent. Is that fair to assume? Yes, CBG definitely, as Shishir Joshipura was saying, has a very bright promise in that sense. Only thing, the entire ecosystem is still in the phase of getting established. We believe that the way in which the work is going on on the ground, we will see a development happening in that front, albeit slowly in the course of a lot of quarters. We will see a picking up in this segment going forward. Sure, sir. Thank you so much for your comments. Thank you very much, Lokesh. Thank you. The next question is from the line of Saket Kapoor from Kapoor & Company. Please go ahead. Namaskar, sir, and thank you for this opportunity. Very interesting discussion, sir. Sir, firstly, sir, as you have told earlier also that, our country deciding for hybrid model of fuel would be more than going for totally EV path. In your, in your consultation, where with the ministries and all, what is the thought process, currently? Where are they in terms of, this blending part giving more, more trust to hybrid model for automobiles so that the ecosystem there also, continues? There, they were not destroying. If they go into the EV path then the, complete section of ancillaries goes out of market, as been explained. How conducive do you think this hybrid model could be acceptable and thereby giving us as a company an opportunity to supply this biofuel and supporting biofuels in different forms, sir? On the aviation fuel part, sir, the sustainable aviation fuels, what kind of testing flying hours have been done currently and what kind of feedback they have, sir? On the SAF front, let me just first take that question of your SAF, the last part of your question, set of questions. We had already mentioned that the testing is already done on the SAF which is produced by the Indian Air Force, and the testing certificate is issued by them stating that it is fit for flying the aircraft. That testing phase has already been done. Just to give a clarification on the SAF front. The other part of your question related to future of a biofuel and what will happen in the light of EV coming up. There, the way to think about it is like this. I think this is still an evolving phase for what will be the future of mobility. Is the future of mobility going to be electric? Is it going to be based on ICE engines, or is there a third technology which will become the hybrid that we're talking about in terms of, so high carbon fuel, low carbon fuel and no carbon fuel. Okay. That's the transition that we see. Hydrogen will be the no carbon fuel. Now, there are some other challenges. Although EVs, right now we're all excited about hydrogen because hydrogen poses its own challenges in terms of, we need very high pressure storage, and that increases the weight of the vehicle and things like that. The whole setup that is required to dispense hydrogen, it doesn't exist today. The vehicles that use hydrogen don't exist today. So there are very different set of challenges to be aware. To overcome all these, there's already an existing full fleet of vehicles on the road which are not fit for using hydrogen. A whole host of issues that need to be overcome on the hydrogen side. The thinking right now is that maybe for long-haul travel, especially commercial vehicles, buses, these kind of things, one can look at a dispensation from a point of purchase. But maybe for cars, etc., there will be a technology that will come through which will be onboard generation of hydrogen using ethanol in a fuel cell and then drive through fuel cell to electric motor. It's a vast subject, and it is still unfolding. We'll have to see how the technology goes, but that's still 10 years away into the future. Correct, sir. Thanks, sir. Congratulations also for this, sir, celebrating 75 years of independence. Also, I mean, it's a very unique concept in terms of this sharing this delight with your investors. Only one of its kind, sir. We haven't had any corporate coming up with any special dividend on celebrating this independence 75 years of Amrit Mahotsav. So a unique idea, sir, for sharing with your investors. Sir, in the cash flow part, sir, you had mentioned about investment in debentures and bonds to the tune of INR 25.41 crore. So, what are the yields on it, and where are these funds invested? I mean, in triple-A papers, in private, in government, where is it? Okay. The nomenclature is debenture, bonds and corporate because that's the standard nomenclature. As a policy, investment policy, we don't invest into corporate bonds at all. All the investment happens only in the fixed deposit or the mutual funds or the bonds issued by the banks. These are the only three segments where our investment goes, and we ensure that our investment is only in triple A-rated companies. We might accept the lower return, but not on the quality of the paper. A very small point, sir. Sir, we belong to the capital goods industry, and so CapEx is the word that is familiar to our growth. We may be in one of the verticals, but it is all the ecosystem that gets charged up when the wheels start revolving correctly, t here. What is the pulse on ground, sir, currently in terms of the disruptions because of these commodity prices, the war on one hand and the supply chain disruptions and the semiconductor issue, the various parts of the story? How do management like Praj and others who are totally having their ears on ground, taking into account the CapEx cycles that this country is currently moving into, where are we? Sir, whether the trust the government has given for the CapEx cycle has it started gaining momentum, or has it received some jolt because of these external factors? Sir, your thought process on this, please. Saket Ji, you know, it's a mixed bag. In the sense, of course, our order book shows that the CapEx formation is taking place, at least in our segment. Our growing order book is a testimony to that. The policy environment that has enabled that is also very, very visible, t hat's the positive part. But as you're rightly saying, some markets. For example, pandemic had a different recovery rate for different economies. The European war has created different set of dimensions for a set of economies, though not all. The high inflation may take some toll in couple of other economies where. I don't think there's a commonly applicable factor all across, but each of them will have to find their own ways and means. What is very important is that in all this, I think one good thing that has happened is literally the entire global leadership across different cutting across different political spectrums, geographical spectrums, nationalities, has a common agreement that we cannot continue in our future with this high carbon intensity energy future. That doesn't exist for anybody. Everybody says, "Yes, we should move. To what, you ask. Electric vehicles, solar power generation, wind power generation, biofuel and hydrogen, those are solution forms." Definitely, all major economies in the world, even small economies are committed to make that happen. I think that's the positive part as I see, and that will drive the investment in our business. Some other businesses which are run-of-the-mill or normal, kind of CapExes, they may have a different perspective on this, but this is how I see it. Yeah. Thank you, sir. Right. We hope that our execution cycle will also gain traction going forward. That is, as you have answered earlier, sir, yes, sir. Yes, yes. That should not be a truncated one. Yes. Yes, yes. Yeah. Thank you, sir. Thank you, sir. All the best, sir. Thank you. Thank you. Thank you. Yeah. Thank you. The next question is from the line of Akshay Kothari from Envision Capital. We request you to please restrict your questions to two per participant. Okay. Thanks a lot. I wanted to know regarding the tax benefits. Are we enjoying any tax benefit in the deduction in the form of 80IA? Right now, from this year we have shifted to the new tax regime, where we are going to pay tax at the rate of 22%. Effective tax rate will be somewhere around 25%. Technically under new tax regime, there are no benefits which are available. Sir, there was a notification in February regarding biomass and bio-briquettes, and power plants were mandated to use 5% of their total input as biomass bio-briquettes. Does it impact us in a positive way, or? Sorry, could you repeat the question, please? There was a recent notification wherein the biomass and bio-briquettes, the agricultural waste, it is converted into bio-briquettes, and then it is given to power plants. They were told to source around 5% of their total input as a mandatory provision. It was a government notification. Are we positively impacted by it or we are not into it? We have nothing to do with that. Okay, thanks a lot. That's it from my side, and all the best. Thank you. Thank you. Thank you. The next question is from the line of Ravi Naredi from Naredi Investments. Please go ahead. Thank you very much for my turn. Ethanol blending target by 2025-2026 to 20% given by Government. Please give detailed answer where we stand and whether is it possible, and do we have sufficient raw material like sugarcane, maize and rice to produce the same? Basic infrastructure of keeping this all the storage of ethanol capacity is available with these companies. That is my question. Mr. Ravi, thank you for your question. I would say in a short answer, yes, we are very confident that we will reach the target of 20% in 2025-2026. The current pace of capacity formation is indicating that we will be able to achieve the target t hat's number one. Number two, the infrastructure of storage, that's a great question, already exists. Oil marketing companies have actually made plans for making sure that across India, this kind of a facility is made available. I would just point out to a very small fact that since this is a blending program, the volume will go to replace an existing crude oil volume, crude oil-based petrol volume, right? In overall volume terms, it's not going to increase any net volume except that we have to keep providing for the growth in the economy. I'm sure that oil marketing companies are already. We have dialogued with them and we understand that they have a very clear roadmap of how they will do this and how they will go about doing this. The roadmap for blending has been very detailed, in detail worked out at the highest think tank level in the government in the country, NITI Aayog, the Ministry of Petroleum and Natural Gas, the producers, the petrol suppliers. All of us have been involved in a dialogue to make sure that this becomes a very, very successful program, and I've been participating in the industry association in different capacities as from CII, et c.. I can only share with you that as a country, we are doing a very good job of ensuring that we don't fall short of the targets. Very nice, sir. Sorry to interrupt, sir. I would request you to please email your questions. We will have to move to the next question. Thank you. Thank you. The next question is from the line of Haresh Hindocha from Subhecha Securities. Please go ahead. Congratulations on this good set of numbers. Sir, can you explain to me the detail about the CBG? I mean, last year it was a very big buzz that the 5,000 project will come up in future. Can you just also quantify what was the incentive? Now with this revised price, is there more beneficial to set up a project or not? Can you just explain the number of inquiries you have received after this announcement? Thank you. Haresh, very good question. 5,000 was the overall program that the government announced under the. Yeah, yeah. Saying they would like to see 5,000 projects being set up, t hat's the goal at a country level. Obviously, then they've announced the policy. The policy has, as I mentioned to you, we have built some, we are building four projects. Two of them are commissioned and handed over. There are two other, which are in different stages of construction. There are some others also being built by some of our other friends on the technology side. It's an ecosystem in making as I would call it. We are nowhere near 5,000 plants right now, nowhere near there. This new announcement on the policy, because in between the subsidy was withdrawn, the price was still at old levels, so the projects were not viable. I think with the new price levels, it will start to move in the viable territory. I still believe there's a lot of scope for improvement in the pricing front on the CBG side, and we will see the traction build up. We are also seeing just about beginning to see the interest coming back in terms of people saying, "Hey, we want to evaluate whether with this new structure of pricing, et cetera, it makes more sense." I'm sure it does make sense for them to go ahead and start considering the project. We will see the other part that I was talking about the transition of the sugar sector from just being a sugar producer to a multi-product complexes will also help this transition. All in all, moving in the right direction, signs are up there. I had mentioned that in my call about six months ago, that we are still about 18 months away from this opportunity actually taking place, taking shape in a good way. I still believe that that's the timeline that we have to look for. Thank you. We'll move to the next question from the line of Naysar Parikh from Native Capital. Please go ahead. Yeah. Hi, Mr. Shishir and Mr. Sachin. Thanks for taking the question. So my question is that we've obviously done amazing on the order book from around INR 600-700 crores a couple of quarters back to INR 1,100 crores. My question is that how sustainable this has been. You know, do you think we've reached some kind of a peak for maybe couple of quarters where the order book is concerned or do you see more growth even from this number? Naysar Parikh, as I was mentioning that we'll have to see how the different external factors play out, you know. I mean, in terms of the opportunity, they start to open up. Broadly speaking, we believe that there will be new. We have not found the new chapter or anything like that. This will continue to build momentum. India at E20, or let us say the policy changes to E27 or flex fuel vehicles are sort of introduced. The diesel blending program goes up, then that will further give fillip to capacity build-out program. We'll have to see how the biofuels world over are impacted by the policy directions that governments provide. That that's a key factor, t hat's one. Two, already in several markets, as I was mentioning, the focus to shift to a low carbon intensity, energy mix, is going to play out in a constructive fashion. There are indicators that we have not reached any plateau yet and we will continue to build the momentum from here. Right. I, actually my question is more, you know, near term. If you look at it today, sugar is only 1/3 for now, and 2/3 I think is shifted to, you know, grain-based, if that is correct. You know, on the grain-based side, so is it fair to say that, you know, on the sugar side, our order intake will keep reducing? And on the grain side, what kind of industries are you seeing putting up capacity, you know, really for this ethanol production, you know, in the next few quarters? Even in the sugar side, as we mentioned earlier, because of this sugar export ban, I'm sure a lot more capacity will become available for ethanol production. Sugar mills will also come back to the frame, t hat is number one. Number two is in terms of the people, as I said, there are pharma companies, there are other commodity companies, there are energy companies, there are funds. It's a very different set of people who are now setting up starch-based ethanol because that's the feedstock is freely available. So that is the key driver. Is this the 1/3, 2/3 what you're saying that all the new capacity that is now coming in will come on to starch because obviously there are no limitations on the feedstock there. With this announcement on the sugar ban, we actually see sugar also coming back in a big way to participate in capacity formation compared to it has slowed down a little bit, so it's a relative term. It's not that sugar has stopped. It's just that starch was picking up from a lower base. From that perspective, obviously more capacity is being built around on starch-based feedstock. Thank you. We'll now move to the next question from the line of Karthikeyan from Suyesh Consulting. Please go ahead. Sir, good afternoon. One question on the government thinking on feedstock availability. Has, in your conversations, there been any reference to genetically modified, you know, say corn or any of these other sources of feedstock to create, you know, a parallel supply situation so that you don't have this food versus fuel kind of a complexity? I think, Karthikeyan, this is a great question. Currently, while that question doesn't exist in India for food versus fuel, because we are looking at damaged food crops, you know, damaged grains and excessive grains and these things. There are markets where the concept of energy crops is very much present. Diversifying the feedstock is a very important step in the policy of any country's biofuel policy. I think that's what government is actually intending to say when they released the recent cabinet approvals on what needs to be happening. We will see much more broad basing of the feedstock. Today, it is restricted to a few. Till about two years ago, it was only one feedstock. It moved to three, and then now it has moved to many. We will see a change. We also see lignocellulosic with feedstock in terms of the straws and the grasses also working once this plant is commissioned that I was talking about. We will see a new kind of a regime in which different feedstocks, very wide variety of feedstock will probably start working as feedstock. Depending on the local factors, they could be chosen one over another. We don't foresee a problem on the feedstock side right now. That's correct. I was only asking because the challenges related to volatility may be somewhat reduced if you have a you know, a dedicated supply source versus, you know, you create a parallel sugarcane kind of a situation. That's the point I was trying to understand. There are countries that have gone for energy crops. I'm sure at some moment in time we will see that happen as well. Thank you. We'll move to the next question from the line of Krishna from Nimai Shah. Please go ahead. Hello. Yes, sir. Please proceed. Yes, Krishna, go ahead. Yeah, thank you for the opportunity. My question is on the ethanol demand side, E20. Currently only all the vehicles are capable for E10 as per our understanding. For E20, the new vehicles sold only would be capable for the E20 fuel. How do you see the demand side of ethanol playing? Would it be that the projections are better too high towards the demand side? It's a little long-winded answer but Krishna, right now I'll try and keep it brief in interest of time. If you use the current vehicles at higher than E10, then you don't get all the benefits that you should get out of using ethanol which a newly designed vehicle on E20 will get. There are some changes required in the fuel line components, especially gaskets. Those are easy changes to be made. You may not get full benefit into an existing vehicle that you would get into an E20 designed vehicle, if I can put it that way. There will be some loss of performance if I can. Not performance of the vehicle but loss, what you could have got. It's more an opportunity lost kind of a situation. Other than that, I don't see a problem. Okay. One more thing. Automobile industry, if you look at Maruti, has already declared that their vehicles- Yeah. E20 kind of a thing from next year. That's 50% of the market already compliant. The demand side is also getting geared up for the availability of E20 in next three-four years. You know, we are a country of engineers, so you're aware that there's so many vehicles that got converted to gas external to the factory. They were all originally petrol car, got converted to gas. We are a country of engineers, and I'm sure that if there are minor adjustments required in the existing vehicles, that'll happen. Thank you. And- Sorry, sir, I would request you to please email your questions. We'll have to move to the next question. Oh. Thank you. The next question is from the line of Prathamesh Sawiant from Axis Securities. Please go ahead. Just to understand two things. One is what's the update on the IOCL JV that we had announced last quarter. Second, the question is to understand the per unit economics. Let's say someone is starting a 100 KLPD ethanol plant. What will be its cost and average payback period or something like that IRR he expects? On the IOCL front, I think you're referring to the MOU which we signed with IOCL. Yeah. There are different proposals under which, under this MOU, which we are right now discussing to figure it out what makes sense to finalize as the first project to come up with. It is still under the, what I can say, on a drawing board. At the opportune time, we will definitely get back to you people and tell you what is the development on that front. Right now it is on a drawing board. What was the second question? Sorry. Typically, starch-based, there are many factors that will go to build this plant. Maybe a 100 KLPD starch plant will cost upwards of INR 125 crores-INR 150 crores. We can look at an IRR too, a healthy two-digit IRR. Okay. Sir, for the CBG plant also, what is the? CBG, I think Sachin mentioned to you that it's a wide range, INR 30 crore-INR 120 crore, depending on the feedstock and proximity and et cetera, what's the cost. Again, two-digit IRR, a reasonably healthy two-digit IRR. Okay, sir. Thank you, sir. Thank you. The next question is from the line of Faisal Hawa from H.G. Hawa & Company. Please go ahead. Hello? Faisal, your line has been unmuted. Please proceed. Sir, going forward, what is our R&D spend, totally, and what areas are we, you know, concentrating on doing the research and development? R&D. Yeah, we are in the process of, you know, creating a robust program. Apart from continuing with what we already have, because R&D is not something that we can commit only for a year, we'll have to have a little long-term view on this. The programs that we initiated, I think Sachin also mentioned, where two of them have now reached from bench to pilot scale. We are just evaluating the feasibility part, and we will take appropriate step at that time. Our R&D spend will continue on the same lines, in fact into a much more enhanced way compared to what it has been so far. We'll talk about it when we are ready to talk about it. Of percentage of total revenue. As I said, we'll continue at the same pace that we have continued so far. In addition also we see an acceleration because of this new development that Sachin described in his opening remarks. We will come back to you with exact numbers, but that's where we see it going now. Thank you. We'll move to the next question from the line of Raj Mohan, Individual Investor. Please go ahead. Yeah, thank you for the opportunity, and, congratulations on a great set of numbers. First on diesel, specifically any update on the progress in R&D on diesel with ARAI? Looking at it from a three-year perspective, do you think we would have a marketable proposition for blending 5%? The second question, though we are exploring on the CBG side, any impact on this astronomical increase in global natural gas prices on us? Mr. Mohan, two things. One is, you know, new policy announcement that government has done on CBG. I think they have linked it to the CNG price. That is a good progress according to me, because now that at least indexes it to some basis and not just, you know, fixes for a long-term program. That's a good thing. I think that has happened, that it is now indexed to CNG. I strongly believe that it should be other way around. Right now, CNG is higher and CBG is lower. It should be other way around, in my opinion because of obvious factors that it is much more environment friendly, et cetera t hat we will see. That's a second separate question. On the diesel blending part, it's a program that needs to get developed, testing, et cetera, and it's a whole protocol to be followed. We are working with ARAI to actually make that into a reality. There are several what I would call as elements of this program that need to be approved of, programmed into and also then actioned. It is not a very simple program because we are talking of very big change. I'm sure that what the current progress that we have is reasonably satisfactory and we'll get there. Thank you. Due to time constraints, this would be the last question. I now hand the conference over to management from Praj Industries Limited for closing comments. Thank you everyone for your time today. It was a pleasure connecting with you all. If you have any more questions, feel free to write us at info@praj.net. Thanks again for your time and have a nice day. Thank you. Thank you very much. On behalf of Praj Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.