Welcome to the Praj Industries Limited Q2 FY23 earnings conference call. As a reminder, all participant lines will be in the 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 then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anuj Sonpal from Valorem Advisors. Thank you and over to you, sir. 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'd like to thank you all for participating in the company's earnings call for the second quarter and six months ended on financial year 2023. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's 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. Purpose of today's earnings call is to educate and bring awareness about the company's fundamental business and financial quarter under review. Let me now introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We have with us Mr. Shishir Joshipura, CEO and Managing Director, Mr. Sachin Raole, Chief Financial Officer and Director of Resources. Now, without any further delay, I request Mr. Shishir Joshipura to start with his opening remarks. Thank you, and over to you, sir. Thank you, Anuj Sonpal. Good day, everyone. I welcome you to Praj Industries earnings call for Q2 and H1 FY23. All of you had the opportunity to go through our business presentation for the quarter ended September 30, 2022. It is once again a pleasure to connect with all of you. Let me briefly take you all through the quarterly business highlights and industry developments, following which, Sachin Raole will take you through the financials. We closed H1 FY23 on a strong note with a healthy growth in order book and delivery volumes. The challenge around volatile commodity prices, global inflation, supply chain imbalance, those often persisted throughout the quarter. However, with continued focus on customers, combined with our technology progress and increasing favorable business environment, we are able to stand out. Global economy continued to face headwinds in form of geopolitical situations, high inflation and continued uncertainty and volatility on the energy front in several parts of the world. Energy transition is creating several new opportunities for sustainable fuels, and we are confident of leveraging and delivering to our potential. India's EBP 20 program is moving ahead of its target. There's a clear recognition that biofuels have increasingly important role to play as they address multitude of issues across economic, social and environmental spectrum. Introduction of flex fuel vehicles, ethanol-driven power generators, diesel blending program, et cetera, are likely to drive future demand for ethanol beyond EBP 20. Earlier this month, country saw launch of pilot vehicle on flex fuel, strong hybrid electric concept. This is a solution that will favorably address several dimensions of the ecosystem in future. Recently, Uttar Pradesh government has issued a comprehensive policy to attract significant investments in biofuel projects to increase agricultural income in the state. This policy aimed at supporting and promoting production of compressed biogas as well as other biofuels in the state. The government has also given the go-ahead to the ethanol policy that seeks to open and promote units in all the districts of the state. Coming to the business updates, our bioenergy business in 2021-2022 sugar marketing year, India exported almost 11.2 million tons of sugar, which clearly indicates that we have enough sugary feedstock available for ethanol production in a sustainable way. Along with this, availability of lignocellulosic feedstock will ensure India can address higher ethanol demand in near future. In the ethanol market, we continued our strong performance on order book, and our execution remains at optimal levels with multi-product sites in different geographies. On international front, the U.S. government passed Inflation Reduction Act, IRA, that has significant provisions for support on advancement of biofuels across different modes of mobility. As a result of this development, low carbon ethanol is likely to emerge as an interesting business opportunity. With announcement of blending mandates in Canada and Mexico, our market development activities are finding good traction for lead generation in these markets. Our first project in Brazil is on schedule for commissioning at the end of this year. Our service business is receiving positive response from customers for combination of operation and maintenance and performance enhancer offerings. During our trials at a few select plants in Brazil, we have successfully demonstrated performance of RPE solutions. On the 2G front, our plant at IOCL Panipat was unveiled by the Honorable Prime Minister in August 2022. This plant will benefit more than 100,000 farmers and is expected to create around 1,500 jobs for rural youth. 2G ethanol has high potentials of displaced GHG emissions, higher potential to displace GHG emissions compared to 1G. This plant alone will help eliminate around 350,000 metric ton of CO2 every year, which is equivalent to replacing 63,000 cars on road annually. 2G plants will address the serious concern arising due to global warming. The success of this project will pave way for many projects domestically as well as international markets. On international front, discussions are progressing favorably for establishing a 2G plant in Europe. With Russia-Ukraine war and energy crisis in Europe, it will further propel need for 2TS model, which is the most sustainable fuel alternative. Earlier this month, International Civil Aviation Organization, ICAO, announced that ICAO member states adopted a collective long-term global aspirational goal of net zero carbon emissions by 2050. This will be further boost to demand for SAF. In September, I had an opportunity to attend Global Clean Energy Action Forum organized by the U.S. Department of Energy in Pittsburgh. It was widely attended by ministers, government officials and global CEOs. Organizations across the globe may speak different languages, practice diverse cultures, but it was heartening to see everyone talking in unison about clean energy with zero emissions. On the CBG front, customers are now seeking solutions for different varieties of agricultural residues. Our R&D is working on a program to find optimal solutions for addressing these needs. After conducting extensive trial and demonstration plants, we are integrating our learnings to enhance scope and performance of our solutions in the field. On the CBG front, the energy transition phenomena is driving development of blue and green hydrogen projects across the globe, creating interesting business opportunity for this business. Our ability to modularize engineering solutions across the technology platform is helping us to create significant competitive advantage. Our additional capacity in Kandla is now fully operational, and we are exploring further capacity enhancements. On the brewery front, beer consumption levels have crossed the pre-pandemic levels, and we are now experiencing healthy flow of inquiries from India as well as Africa. The new brewery formation is expected to gather speed in the latter part of FY 2023. Our Zero Liquid Discharge business received good business potential mainly from the private sector players and expects few important contracts to be concluded in second half of the year. On PHS business front, our strategy of focusing on high capacity fermenters base is receiving positive response from customers as this enables us to offer enhanced suite of solutions to pharma industry. PHS is also witnessing increasing traction in international markets with very healthy inquiry inflow. On the renewable chemicals and materials front, Praj has entered into an MoU with ICT to establish Parimal and Pramod Chaudhari Center of Excellence and Innovation for Biopolymers. This center will undertake research, promote academic pursuit, and explore newer applications, including developing biodegradable plastics and solutions to curb the plastic menace. Before I end, I would like to share with you a couple of awards that we won recently. Praj received F 2.0 award from CII for contributions to the climate action initiatives. Several different industry organizations such as Indo-American Chamber of Commerce, Renewable Energy India, and many others recently honored our Chairman, Dr. Pramod Chaudhari, with recognition for his contributions to trade and business sustainability initiatives. With this, I now hand over to Mr. Sachin Raole for his comments on the financial performance. Thank you, Shishir Joshipura. Good day, everyone. Let me take you through the financial highlights for the quarter and half year ended September 30, 2022. Consolidated income from operations stood at INR 86.2658 crore in Q2 FY 2023 as compared to INR 52.41 crore in Q2 FY 2022. EBIT has increased by 40.62% and stood at INR 65.26 crore in Q2 FY23 as compared to 46.27 crore in Q2 FY22. Similarly, profit after tax stood at INR 48.13 crore in Q2 FY23 as compared to 33.34 crore in Q2 FY22. For H1 FY23, income from operations was INR 1,606.45 crore as against INR 918.67 crore in H1 FY22. EBIT stood at INR 120 crore in H1 FY23 as against INR 76.57 crore in H1 FY22. Cash of INR 89.59 crores in H1 FY23 as against 65.54 crore in H1 FY22. Export revenue accounted for 17% of the total revenue, 74.7% is from bioenergy, 19.5% from engineering, and 5.7% is from PHS business. The order intake during the quarter was INR 981 crore with almost 93% from domestic market. Of the total order intake, 85% came from bioenergy, 10.8% from engineering and balance from PHS business. The order backlog as of September 2022 is at INR 3,346 crore, comprising of 87.5% from domestic orders. Cash in hand on September 30 is INR 314 crore. I now conclude my remarks, and I would like to thank you all for joining us on this call. We would now be happy to address 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 then one on your touchtone phone. If you wish to remove yourself from the question queue, you may press star then two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the questions are sent in. The first question is from the line of Dhananjai Bagrodia from Ask Investment Managers Private Limited. Please go ahead. Is it audible? Please proceed. Can you hear me? Hello. Yes, please proceed. What explains the difference between standalone PBT of INR 82 crores versus consolidated PBT of INR 65 crores? Dhananjai, we can't hear you. What explains the difference between standalone PBT of INR 82 crore versus consolidated PBT of INR 65 crore? In other income, we have INR 20 crore dividend income coming from the subsidiary company. It is pending in our standalone result. Consolidated, too, INR 20 crore naturally gets knocked off. That's why the consolidated PBT looks lower than standalone. Okay. Operating cash flow from during this quarter, lots of higher receivables. Can you comment on that? More than higher receivables, actually we have gone ahead with the increased inventory. The plan which we have taken in last two quarters, we will go for very calculated inventory accumulation on the commodity prices side. That's what has resulted into our inventory going up. More than the receivable. Receivable number of days are absolutely sluggish as compared to last quarter. This phenomenon of increased working capital is mainly on account of inventory side. Okay. Lastly, regarding payables and receivables, are we losing bargaining power with suppliers due to excess of them now? The payables are receivables, right? Payables. Are we losing bargaining power with suppliers due to excess of them? No, there are various mechanisms and methodologies in which we are using the cash on our balance sheet. When we have any negotiation happening with the vendors, we also go for early payment with the cash discount for that matter. These are the three, four measures which we have taken to counter the commodity price increase. One of them was to give the early payment for payables and go for the cash discount. Lastly, regarding your margins, margin is not improving despite falling RM. Is there anything which you could read into that? Because our margins have been worst in this quarter. If you look at even the composition of our sales is mainly almost tilted towards the domestic sales. Domestic sales, it has even the EPC component. It is not only E&C component. EPC component is also heavily plays role here. That component naturally there is little margin as compared to your suppliers, one aspect. Second aspect, if you look at traditionally when our exports are more than 25% or 30%, our margins are very different. Today our export sales, as I already mentioned, are not in tandem with the growth which we are seeing in the domestic market. They are good. They are definitely better, but they are not running in equal speed with the domestic number. That's the reason why this blended margin looks low. Otherwise, of course, there is a component of commodity prices which we are continuously saying that we will see this impact continuing at least in H1, and that's what has happened to some extent. It is coming down, but it has not completely gone away. Okay. These are the two major reasons. Sure. I'll come back to you later with more questions. Thank you. Thank you very much. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to answer questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Thank you. The next question is from the line of Shailesh Kanani from Centrum Broking. Please go ahead. Good afternoon, everyone. First of all, congratulations for delivering bookings, I think, on high quarterly revenues. My question is with respect to installed current capacity, current production capacity. As per you, what is the current capacity on an Indian domestic basis? What is the capacity we are having on installed production? You know, Shailesh, very clearly, Garvit has said that there is now 1,000 KLPD which has been achieved in the country. From the capacity perspective, I think that's where we are. We need to go to 20%. We are at halfway mark as far as capacity is concerned in terms of what is required. In last we checked, I think we were at 850 crore liters, right? Ordering was of further INR 300 or INR 400 crores was already tendered. I just wanted to know the opportunity pending on the order pipeline. Correct. As we had said last time as well that. Yeah. When the EBP 20 program started, we had roughly estimated that 1,000 crore liters we need to get added. We have said that we are at halfway mark on it. Right. Just to get some numbers, right? Last time, I think we had an interaction where you said INR 1,800 crore-INR 1,900 crore worth of the potential capacity requirement to produce something in the range of 1,400 crore liters, right? For EBP 20. Where 1,000 crores is more potential gap. Correct. Just wanted to know. One minute. Straightforward number. Sorry. If you're looking for the straightforward number based on what is the current capacity already created and ordered and what is the balance. Right. Yeah. Yeah. Balance will be in some ways in a range of INR 500-600 crores, which we saw at the beginning of this year. Something has got ordered during this quarter. Still I believe that balance capacity creation should be in the range of eight- I just wanted to tell how many more quarters we should see good amount of traction on that. Okay. That answers that question. Just on your opening remarks, you had mentioned that post E20 as well, we are seeing opportunity coming up, right? Just two questions on that. One, One, till what level do you see that kind of opportunity or what capacity you forecast? And also on the feedstock availability front. Both of them, if you can answer. Correct. As I said that applications will change. Right now it's very simple, plain vanilla, 20% blending all vehicles on the road, ethanol-petrol kind of market segment. If you look, start looking differently, and let me start. We just saw the first flex fuel vehicle, which was also strong hybrid connections. Essentially is the ideal solution for India, was launched just last week by an auto company. That is very positive development. Flex fuel vehicles will drive 100%. It's no longer limited 20%. It will go all the way up to 85%. That's the first answer to you. Second, we have talked about the stationary, the number one was stationary. What we call DG sets industry, switching over to a more sustainable form of fuel, which is ethanol. That's the second one. Third, application that will actually emerge would be about, the application on, mobile and diesel engines, and that's where one is the railway is one sector and, vehicles, is another segment. So there are several other avenues, that may even in future develop around, the sustainable aviation fuel. Several opportunities will open up, such as telecom towers, data centers, many of those which are currently running on diesel. But they need, they can very sustainably shift to, ethanol. I think one is the EBP 20 program. All of these will also start to drive, and the numbers we need to compute, exact numbers when we should probably connect directly to you on that one. There's an opportunity is even bigger in that. Aren't there any question marks on the feedstock availability? I understand last two years there has been some plentiful. It is expected to be a buffer on the sugar production side. Overall in general, do we have that kind of availability of feedstock on a sustainable basis? Yes, I think you hit the point that I made around excessive sugar production and export et cetera. That is very clearly one feedstock availability indicator to all of us is that it's adequate, number one. Number two, the bigger and actually the biggest opportunity is going to be the lignocellulosic feedstocks, which is why we are so positively looking forward to you know, committing and handing over of the IOCL project because that will go beyond any doubt that that's the feedstock to stay. Currently there is no use of that. We just burn it off, right? There is a huge amount. I don't think we have currently any worries around feedstock availability. There's enough and more. Of course, we will have to continue to find different feedstocks as we move forward. Right now, I don't see that's the challenge at all. Mr. Kanani, last question again, please. I'm sorry to interrupt. I would request you to begin the queue, sir. Sure. The next question is from the line of Ravi Dharamshi from ValueQuest Investment Advisors. Please go ahead. Yeah. Thank you for taking my call. I just wanted to check on the CBG. Are we starting to see any kind of traction on the ordering front? We are beginning to see some activity developing. As I mentioned, the very, very supportive policy that came out from UP government is just about two weeks old. We will, maybe a little later in time, be able to answer this question in a more affirmative way. We are clearly beginning to see activities beginning to develop in that space. There were some issues regarding the supply chain. Those have been sorted out. Policy-wise, supply chain-wise, financing-wise, everything is in place, and ordering is the only thing left. No. The sales to begin, right? No, no. It is a very local issues in this case. It depends on where the location is very clearly. On the funding, there is a provision that's made available to public-private. Not many projects have come up, and that's the key point. Obviously some more ironing out is required on offtake, et cetera. In general, the environment for setting up an ecosystem involving CBG plants is becoming increasingly more favorable. Got it. Just one last follow-up from my end. On the margin front, of course, you gave an explanation of the domestic and export business. Just to understand, the steel prices have fallen almost 60% from the top. Also, our gross margins here used to be much higher earlier. You have earlier guided that this year we are likely to double digits. Just wanted to check, I mean, first half almost gone, and we are still at some 8% kind of margin. Will we be able to still stick to 10% plus kind of margin guidance? We are not giving any guidance on what the next quarter will look like. I can tell you that, A, we believe that the highly volatile commodity price changes that we saw are hopefully behind us. That should have a clear bearing on what we do forward. Although there'll be some, as you can see, this is about INR 1,000 crore odd level. It's still some, you know, this is impacting flexibility as we go through the year. Sachin was also mentioning around improving the mix, which will also lead to improvement in margin. As we move forward, we are setting the path and take those actions to get there, and that's where we stay. Okay, thanks. I will get back in touch. Thanks. Thank you. The next question is from the line of Vikram Suryavanshi from Phillip Capital India Private Limited. Please go ahead. Yeah. Hi, sir. Congratulations for good growth. What we are looking at is that, how, when we can see the pickup in export given the geopolitical situation, because I know we are doing extremely well in domestic markets. Yeah. I think the fuel export is the area where we can also do much better and how we can see the growth in that area. This is my first question. The second on Bio-CNG side, now I think environment is quite conducive in terms of not only CBG prices, but even by-product prices also. So is that helping to really see the ground level pickup or how is your reading on this opportunity? Vikram, on the export side, I think the observation is going on. As we had mentioned that we expect, the second half at least to start changing on the order booking side, and probably that will be reflected in the revenue through the few quarters in terms of the results. But because obviously, already as Sachin was mentioning, it's not that our order book is low. It's just that domestic is very, it's domestic is at a very different speed. Having said that, we are also cognizant of the fact that we need to increase the speed of our international order book, and that's what we are focused on, and we expect that H2 will be different than H1. That's, I hope that answers your question. Yeah. Second on the CBG side. On the CBG front, there is still, as I said, there are still some last mile duty issues to be settled, in terms of pricing point for by-products, offtake agreements, and policies for fertilizer, because that's an important by-product out of a CBG plant. On the gas pricing side, I think a lot has been done, but some of these interconnected, as I call them the last mile pricing issues, connectivity issues that still need to get addressed. State of UP has tried to address some of these, though not all. I think as I said, as we move forward, we expect to see a more favorable environment in which to operate. Maybe next quarter we can talk around this a bit more. No problem. Thank you very much. Thank you. The next question is from the line of Isha Agarwal from VT Capital. Please go ahead. Ms. Isha, I have unmuted your line. Kindly proceed with your question. Yes. Thank you for the opportunity. Some of the questions regarding your Bio-CNG. Can you help me understand what's the update and how people are adopting it, especially the sugar companies? Are we seeing any demand coming from them? Hello? Hello? Sir, we cannot hear you. Ladies and gentlemen, please stay connected while I try to reconnect the management. Ladies and gentlemen, thank you for your patience. Management has been connected. Sir, kindly proceed. Esha, could you please repeat your question? Yes, sir. Sorry for the drop, yeah. Yeah. My question was regarding the BIOSYRUP® tech. I just wanted to understand how are we seeing sugar companies adopting the different tech. Are we seeing any good demand coming for this BIOSYRUP® tech? Isha, when we developed the BIOSYRUP® technology, it was with a purpose to demonstrate that syrup can become a sustainable feedstock, that can enable ethanol plant connected to sugar plant to run right through the year and not be dependent on seasons, you know, change of season, right? That was the purpose of demonstration of this technology. Obviously, there are some other dynamics which still have to be resolved in terms of, you know, establishment of BIOSYRUP® as a feedstock, the storage system infrastructure for that. Also the dynamics in the sugar market that decide whether we want to produce sugar or we don't want to produce sugar. There are many other dimensions that also have to play. Our purpose was to demonstrate that the technology is available. When, as and when the factors align themselves, this is an option that the customers can opt for, just the way they are putting options or say molasses, B-heavy molasses or anything like that. It's another feedstock that is available. Hello? Miss Isha, we couldn't hear you. Can you please repeat? Can you hear me now? Yes. Yeah. My next question was regarding the 2G plants. I just wanted to understand the rationale, like for setting up 2G plants, if the cost is double, then why would somebody opt for going for 2G plants instead of having a 1G plant? And also just wanted to understand if the prices for 2G ethanol is decided by the government or it is set by the OMC? Second question first. There is no notification as yet on 2G ethanol prices. We don't know as to what the prices are going to look like and what mechanism will come into play. That is number one. Okay. Number 2, why would somebody want to put up a 2G plant? There are 3 or 4 dimensions. First and foremost, that the 2G technology actually reduces emissions of CO2 by over 85%. That's not possible for a 1G technology to do because obviously, it is limited, has its own inherent limitations. That's number 1. Number 2, availability of the feedstock. That is a question that was also previously asked by one of your colleagues. We have to understand that what is the problem that we are trying to solve. The technology would be to what. For example, if energy is a problem we're trying to solve, this is one way to solve it. If we want to address the CO2 emission, ethanol is the way to solve it. 85% reduction in GHG emission is a very definitive way of solving it. Tomorrow, when aviation fuel starts to become the norm of the day, the airlines will look for some very low carbon intensity fuel to be put into their wings, right? If that happens, then obviously at that time, this is the only solution because this is the way it will go. Next one, this also provides an outlet for farmers to not to burn their standing residues of crops, but actually realize money out of it. Different scopes, different goals. There are very different set of reasons as to why 2G plants will come up. Because what we are not factoring in when we look at only the current one investment perspective. What you said is correct, it is high investment. What we are not looking at is, farmer's income levels, the calamity of climate, the amount of, health costs that we have to bear. Now, it just so happens that different stakeholders are bearing this cost. That's why we need an enabling policy environment that sort of brings everybody on the same platform. I think we are moving in that direction, not only here but also outside, in rest of the world. Yes. Got it. Thanks so much for that. Thank you. Thanks, Esha. The next question is from the line of Dikshit Mittal from LIC Mutual Fund. Please go ahead. Yes. My question was on margin itself. There was a kind of growth we have seen on the top line. At least operating leverage should have played out right in terms of the margin. As you mentioned that, but because of export and domestic mix, that margin is low. Does that mean that the domestic orders we are basically keeping below 7% margin or is there something else that I'm missing out? Not necessarily. I was only saying that the blended margin will go up only if there is an export element coming in. If you look at the entire revenue mix, export revenue is very minuscule in the first half. Because another element, as I was mentioning about the construction activity, there is a little late as compared to the supply portion. The blended is looking like this. It doesn't mean. Of course, there will be different projects and different businesses carrying different margins. Not necessarily that domestic is carrying lowest and that's the reason why it is getting reflected that way. Just what is the impact of this commodity volatility on overall, maybe it's been observed during first half? First half it should be in a range of at least 1%. Okay. That can contribute enough and that is the case. I think that's what made it our belief. Last year it was higher than 1%. Now at least in H1 we are seeing the lower impact of that because that impact is still there. Like if I see your history on a much lower top line, you were touching 78% some of the years. Entire only purely because of 10% your exposure has been at least 30%. Now it's 17%, so that much impact. That's right. Because that 13%, again, I'm excluding that it is completely from the engineering side or on the equipment supply side, and no construction components at all. That and naturally margins will be very different. Lastly, as you mentioned, this difference of standalone and during this from. That's my takeaway. Oh, okay. Thank you. Thank you. The next question is from the line of Lokesh Maru from Nippon India Mutual Fund. Please go ahead. Hi. Thank you for the opportunity. Am I audible? Yes. Thank you, sir. I have two questions. Number one was on other expenses. Other expenses right now would be 20%, right? It is more or less around the on-site expenses and the labor charges and travel and site, which form major component of it. It has been trending mostly downwards in the last two years. Like you, as our top line goes up, cost should remain where it is. Other expenses which are variable in nature should also go up in tandem with the top line. Any guidance or you know any thought around how would you look at this component as% of your top line going forward and in future as well? Your observation is right. Mainly these other expenses, as you mentioned, are completely related to the business activity point of view, and major component of that is sitting in the project activity. Currently, if we are doing 80 projects, and tomorrow if we are going to do 160 projects, absolute number will change, percentage will remain more or less in the same kind of a range because it's almost 90% variable in that sense. Hello? Mr. Maru, we are not able to hear you. Sir, can you provide how much volume were we able to do in last quarter? Like, we have the case number, but could you also provide the volume number in terms of KLPD only for the biofuel, please? No. We don't provide this breakup. We only provide the breakup on the basis of business segments. Okay, sir. Okay. Thank you. Thank you. The next question is from the line of Amish Kanani from JM Financial Services. Please go ahead. Hi, sir. Congrats on your contributions here. So there are two-part question. One is, you mentioned, you know, exports- Mr. Kanani, we are not able to hear you properly. Can you please switch to your handset? Yeah, yeah. Yeah. Is it better? Yes. Yes. We hear. Yeah. Yeah, sir. One, you mentioned exports might see some traction in the second half, at least from the order side. If you can give us some sense of, you know, in the past we were hoping for some, you know, orders from EU, but maybe, you know, the war has kind of vitiated that environment. If you can give us some sense of whether that's happening. In that context, you know, you did mention about Brazil, Canada and Mexico, so Mexico. If you can give us some sense of where is the traction and what is the kind of inquiry there? I mean, just as mentioned, they are our driving forces in the market. We are clearly seeing blending mandates coming in in Mexico and Canada. The expectation was that this energy transition is a phenomenon where all economies and countries are thinking increasingly in terms of being their own producers of their energy needs is something that's now visible. These are initial proof, but I think that's the first dimension. Second is, we clearly see the demand emerging for decarbonized fuel more and more. As you know, biofuels are a clear answer for that, irrespective of the mode of transport, whether it is on the road or surface or air or marine or wherever. That's the second one. We believe that if you look at these mandates, energy security plus decarbonization is an agenda. I think that opens up a completely different canvas on which the demand for biofuels across the globe starts to accelerate. In Europe, the driver is the fact that there's a directive which says you need to create a recipe by 2030 for 2G ethanol. It is a mandate given. That is the driver there. In America, low carbon ethanol because that's how the market mechanism works. The lower the intensity of carbon in production of that particular fuel, the better realization it gets. That's their driver. China has introduced a E10 blending program. Right now, because of the political situation, maybe there's a bit of a gap there. I'm sure that they'll pick that because uncertainty is just that they have to go through the election process. Different drivers in different markets, but everywhere clearly, energy security and decarbonization are two very, very clear drivers for driving the demand. Just this IOC plant, planning question. Is there any migration of inquiries from the domestic Indian companies for, say, additional plants? I understand it's expensive, but maybe oil and gas companies would go further is a hope. The way oil prices are volatile and the balance sheets are being impacted. Any sense of where the traction will be post the OMC? I mean, if I answer probably stay same as what I gave in the first case. The certainty and decarbonization is the driver, and this is a big decarbonization drive, right? If you go through the lignocellulosic feedstock route, that's the highest reduction of GHG footprint. We will clearly see this trend developing. Yes, a lot of people are watching the impact results that come out of the first commissioning. We are very aware of that, and we are working on that. Then of course, there'll be two more projects that we are commissioned towards the next calendar year in India itself. I think that will give a very clear. Yes, it is a 15-month kind of a period from now. In that 15 months, we will actually showcase to the world of what the possibilities are. I think that will become a very, very definitive signal for driving this opportunity forward. Sure. Sir, last question. What is the average execution of this outstanding order book and if possible by vertical? That'll be helpful. Thanks. The outstanding order book as of September, right? Yeah. Say 80% is bioenergy. What is the average execution time, if it is different from vertical to vertical, you know, by vertical? It will be in the range of 12-15 months. Certain orders are going beyond 18 months, not necessarily of bioenergy. On an average, it will be falling within a band of 12-15 months. Okay. Sure, sure. All the best. Thank you, sir. Thank you. Thank you. A reminder to all the participants, please limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Thank you. The next question is from the line of Aman from Goldman Sachs Asset Management. Please go ahead. This is on the CPE segment. If you can, highlight what kind of equipment are you supplying, and specifically you mentioned something on the hydrogen, fuel cells et cetera side. What is the equipment? What is the exact play that we have over there? Aman, in case of CPE, as I was mentioning that modularization is a big offering from that business. What we do is, given a process, and the process is not ours, somebody else's. Given a process, we are able to conceptualize and engineer a plant that gets modularized, but the site work is reduced to minimum. That's the basic concept. For blue and green hydrogen projects, that's becoming a big demand from because on multiple accounts, A, many catalysts. B, only a handful of companies globally have the resilient technology to actually give the process licenses for these. We are also working with CPE business very closely with them to create this solution. This enables them to go on stream by reducing the space time significantly and obviously cost is there. That's the driver for this business. We are in a position not only for processes and technologies that are made available on this space. As I was mentioning also for our own ethanol 1G and 2G technologies, we are finding traction in terms of our enterprise, the plants, which then reduces significantly the site work, and especially in the advanced market or the developed world, this is a very big attraction. Got it. Just what would be the scale of these projects on the hydrogen side? What kind of capacities are you able to take it to? Depending on the process path and many other factors as to is it a co-located project or an isolated project, which part of the world, what's the feedstock for them? There are many variables. I may not be able to give you a specific answer on that one. Each creates this opportunity depending on who the OEM is. Many factors. I will not be able to give you a robust answer. Sorry for that. Sure, sure. Any tie-ups which you can highlight in this space which you have done? Sorry to interrupt. I will request you to rejoin the queue, please. There are many other participants who are waiting on the line. Yes. Aman just very quickly close the answer. Yes, we are working very closely with several leading technology providers in the world. Our agreements do not permit me to take their names, so I won't be able to do. Thanks. Thank you. The next question is from the line of Amit Anwani from Prabhudas Lilladher. Please go ahead. Hi, Amit Anwani. Yes, Amit. Hi, sir. This is Amit Anwani. My question is with respect to exports, as you have already highlighted few things about it and I think on the bioenergy side. Anything, I mean, just wanted to understand this engineering business which is more export oriented as I understand. Can you go through what levels in next two to three years and how at all we have to see, say next 2.5 years, how the business mix is going to change? Second point is on the margins. Obviously, I understand that you cannot share the details on that. Anything directionally where the margins are heading in each of these two subsegments would be helpful to understand. Yeah. Just to give you answer to the second question first, you know, if I tell you that our efforts are making inroads to drive it northwardly in both the segments, which we are on. That's what we are attempting to do. Yes, there are factors that we have to and the challenges that we have to meet and overcome. Fundamentally, the effort is to take it northwardly in that direction. In terms of your question on the engineering businesses, probably this call is too short a duration for me to or Sachin to make an explanation. You probably follow us, and we'll dig into higher detail that we'll be able to elaborate on this. Maybe that is one answer, but maybe we can meet separately, and we'll be happy to walk you through that. Sure. Second, sir, on the competitiveness, if you could just highlight about the market share and how much premium we, if at all we are winning the awards, what is the, say, gap between the closest competitor you might see fit in? Yeah. As I've mentioned in the call, we have actually seen in this quarter our market share move up, especially for the domestic business. We've moved it significantly upwards, excess of 66% now. Having said that, on how much premium we can pay our customers, well, I don't have a quick answer for that, and maybe I'm not the right guy to answer that as well. It is for our customers to perceive the value that we deliver. For us, we are really leaving it to the customers to see value in what we are delivering and we're able to get our share of that as well from them. Right. Just the market share increase was because of the valued product or something else, if you can just highlight anything you have there? What happens is that, you know, we built these plants over three decades now. Over time, sometimes the first bite may become expensive, and the experience is not as effective. Then they come back and say, "No, maybe I do understand that there's a value in your experience and technology and knowledge that you deploy." That's the phenomenon that we are seeing. Probably that's the phenomenon that we are seeing. People are beginning to value what we are able to deliver in difficult markets with alternatives. Even if there are some, what do I call it? Even if there are difficulties, we have the knowledge and the organization, skill, and commitment to set things right, and I think that's what is standing us in good stead. Okay. Last question, if I may. About this year to the tender out 500-600 crore liter opportunity, I understand this will be mostly grain-based. If you could just highlight what kind of traction, which kind of customer profile, where we are seeing the maximum traction for this grain-based plant. Thank you. Amit, actually, as we had mentioned in the past, certainly we did go through a phase where grain-based competition became more significant than sugar-based. Indications are, and as I have mentioned just now, that we are exporting so much of sugar. Maybe this was a special year. As world sugar supply starts to stabilize, maybe we will see a lot more sugar diversion taking place for ethanol production. Probably we will see a balance coming back. I'm not saying shift back, but at least traveling in the direction of higher share of three feedstocks. Then when we, as we discussed, in the next year when the glucose anaerobic plant for commission, maybe even glucose anaerobic feedstock markets. Thank you. Thank you. The next question is from the line of Prathamesh Sawant from Axis Securities Limited. Please go ahead. Yeah. Hello, sir. Good afternoon. I have two questions. One is regarding how you've launched the second generation IOCL plant. I want to understand, what is the commercial feasibility of this 2G plant type? Have you achieved commercial feasibility or it's dependent on the government subsidy? Okay. Okay, Prathamesh. Let me tell you this. First of all, this is a global phenomenon, and there are markets where it is feasible to put up 2G-based plants. Okay? As I was mentioning, India, the ethanol 2G ethanol rates are still not specified. Yeah. And that needs to get specified, obviously, and that will determine the viability as well. We need to commission. What's more important is to understand that this is a technology that's not sanctioned by the government. All right. Yeah. There's no other technology to do. When the focus shifts to GHG reduction or carbon footprint reduction, I think that the cost dynamic, because we don't have in India, at least not yet, the carbon market. In markets where carbon is priced and valued, it's already viable. Okay. Will our core focus on 2G plant would be on the export front? Would you like to say that? We are very clear. Our job is to create solutions for a feedstock. Wherever the feedstock is, if we go to different countries, the feedstock could be pulse residues. If we talk in India, it is more like rice straw, at least to start with. That is important stalk we have to see. If it is in Eastern Europe, maybe it is wheat straw, but depending on where we are. If it is in Southeast Asia, maybe it is some other component of the I mean, do you see the markets coming for this particular product in more of an export scenario as in the domestic front as of now? Okay. On the Kandla capacity expansion, I want to understand, can we get the number of capacity utilization on our business as in we are what we are because we can see that we usually have an execution rate of 29% of our order book. Is it to say that we can see this number going above 29% as we cannot because we have a large order book? Perhaps the existing capacity which we have already created, which has in-house and outsource both, is good enough to take care of the current order book. The comment related to we are looking for expansion of our existing Kandla facility was meant for our export business, and we believe that we will have to ramp it up going forward. Mainly it will be required on the critical equipment side more than on a bioenergy side. Because in critical equipment the manufacturing has to happen at our end and precise end. In the bioenergy we can actually outsource some non-critical equipment. That's the reason the balancing is a little different. To answer your question, current capacity is good enough to take care of our current order book. We are preparing for the next phase in the engineering business, especially on the critical equipment side, and that's what we are evaluating from capacity expansion point of view. Okay, sir. Thank you. That's all my answers. Best of luck. Thank you. The next question is from the line of Harsh Bhatia from IDFC Mutual Fund. Please go ahead. Yeah. Thank you. Just on this fermentation side, when you're talking about PHS, what is the level that we can see in terms of inquiry pipeline, in terms of volume or value? Anything that you think you can share from domestic market where we are currently, and if you could provide some metrics for context, like where could China possibly be as of today or any other Western country, so that we can gauge the overall opportunity size for the fermentation side. I'm talking in terms of the pharma side for fermentation. In the large high purity side. I'm sorry, we're not in a position to answer the question as compared to China because I think the industry itself is at a very, very nascent stage right now in India as compared to what Chinese fermentation capacities are. We have to see how the industry develops. We are clearly seeing a trend, having some dialogues as well as some specific capacities being created by certainly the early leaders in the industry. It's still very early. Well, your question is more rooted a year down the line, and that's when we'll be able to answer it in a more authoritative way. Right now, I mean, it's not that there is a clear visibility in terms of how much of Chinese capacity is either shifting or being replicated or additional capacity created. What we are seeing is that the inquiry levels have significantly changed from very small sizes which a few companies are doing to reasonably large tonnages to multiple companies. That's what we are seeing right now. Okay, sir. Thank you. Thank you. The next question is from the line of Sagar Kapadia from Anvil Share and Stock Broking Private Limited. Please go ahead. Hello? Hello? Yes. Sir, could you please elaborate? In your statement you said comprehensive ecosystem is being set up by UP for CBG and other biofuels. Because whatever I have inquired with people, they say to get even the rice straw and other agri raw material, there is a lot of, you know, problems here. The farmers are not giving them. I think your question is correct, Sagar, that it has to happen. First and foremost there needs to be a policy which sort of encourages people to do the right thing, right? That's what, where the government can do. The actual action on the ground will have to be facilitated by industry, like by farmer cooperatives, you know, maybe some more action even at state level. What I meant to say was that and the policy changes are indicative of government's desire to make this into a successful program. Today we are all talking about the ethanol program because the 2018 National Biofuel Policy explicitly says that. We have been with ethanol for over 30 years, and we have seen that this ecosystem development takes time. We know that in CNG's case, hopefully it will not take that long. The likelihood is it'll also take about five years and maybe a couple more before it becomes a very robust ecosystem just the way say ethanol market is today. That has to be the case, and we can conclude that, yes, it is very new. We are not even a CNG economy yet. India is one of the leading automotive manufacturers, and they have a strategy to roll out you know engines that are CNG-based. It's a whole ecosystem that has to move in tandem and come to a minimal inflection point after which it takes off. Okay. Anything you want to highlight in UP government policy? You said they are doing some source of funding which will, you know, help the setting up of plants to get such raw materials, agri raw materials. Yes. As I said, the policy is there. Now let me say action on the ground. There's a lot of push that is taking place to create predictable supply chains. This is new business, this is a new application, and I think we should give it some time before it, we can get those people answer. Okay. Thank you. The next question is from the line of Ravi Nadar, an individual investor. Go ahead. Hello. Yes, sir. Sir, what is the progress on diesel blending, sir? We are developing a binder, so I want to- Yes, that is still a project that is under progress. We will let you know once we are ready. Very soon. Okay. Sir, on sustainable aviation fuel, when will you get the first order, I think? It's not about getting the first order, Ravi. It's about understanding that what needs to happen. There's still dialog going on as to why. Because even if I put up a plant, there must be an agreement to buy the SAF and use it in the aircraft side. I think we've to go to that place in the U.S., which is the leading market in the world right now. I was there two weeks ago. They, even they do not have any capacity. They have said by 2030, they want to create a certain capacity, which is still at about 5-6% of the overall market that they need the fuel for. I think what I'm trying to say with you is that getting SAF is a little early for us to talk about to in terms of setting capacities. What we are definitely seeing is, as I mentioned, the ICAO announcement is one policy step. The U.S. IRA program is definitely present. As I and you all know, the aircraft when it flies from point A, it has to land at point B, and there also it needs to have the fuel availability. This will develop, but maybe this is still a very early stage. Sir, any order update from second generation ethanol from Europe, sir? As I mentioned, because of the war, things got a little pushed, but the heightened awareness on energy security and the need to fulfill the directives on the RED II program under 2030, we are into very active and very advanced dialogue with a few developers in European space on 2G. The last question, sir. Any update, do you have any plan to buy back shares or give bonus to shareholders? Sorry. Share buyback plan, I know. There is nothing on the plan, on our plans as of right now. This is a matter to be discussed at the board level. If it happens, naturally it will be communicated. Right now this is not on our card. Thank you, sir Thank you very much. Thank you. Ladies and gentlemen, that was the last question that the management could answer today. I now hand over the conference to the management from Praj Industries Limited for closing comments. Hello, everyone. Thanks a lot for your time today. If you have any more questions, please feel free to write us at info at Praj dot net. Thanks again for your time today. Wish you a very happy Diwali. Thanks. Thank you. On behalf of Praj Industries Limited, I thank you for this conference. Thank you for joining us, and you may now disconnect your lines.