Ladies and gentlemen, good day. Welcome to Praj Industries Limited Q1 FY 2024 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. I now hand the conference over to Mr. Anuj Sonpal from Valorum Advisors. Thank you. Over to you, sir. Thank you. Good afternoon, everyone, and a very warm welcome to you all. My name is Anuj Sonpal from Valorum 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 first quarter of financial year 2024. 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 would 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 call is purely 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. First, 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. Good morning, everybody. I welcome you to the Praj Industries earnings call for quarter one, FY 2024. First, all of you had the opportunity to go through our results for the quarter ended June 30, 2023. Last week, Praj participated in the 14th Clean Energy Ministerial and the 8th Mission Innovation Dialogue on the margins of the G20 Energy Transition Ministerial Meeting. Deliberations during the conference were also extended to discuss the formation of a Global Biofuel Alliance for worldwide development and deployment of sustainable biofuels. Several national government agencies, industry, and other stakeholders will be the part of this alliance. I'm happy to share that our ongoing partnership with IndianOil to accelerate India's energy transition towards a greener future stands further reinforced. In October 2021, we had entered into an MOU with IndianOil to form a 50/50 joint venture for production of various varieties of biofuels. Based on approvals from both the boards, we have now signed a term sheet for the joint venture formation. Coming to business performance, we have started the FY 2024 on a positive note, with robust order intake and improvement in profitability. This quarter, we saw an increase in share of international order, reaching 35% of the total order book. It is definitely a positive development. We started this year with the healthy order book, it continued to build during the quarter as well. Owing to differentiated delivery cycles of the order book that we had, the first quarter revenue is not reflecting the annual growth potential of the revenue cycle. Our pro-domestic bioenergy business capacities are continuing to be built around both starchy and sugary feedstock. Food Corporation of India has stopped issue of rice to ethanol distributors till further notice. However, the said distributors can procure rice from the open market. We are evaluating the impact of the decision and watching the development closely, till the government has clarified that the EBP20 program continues as per the original timelines. Domestic inquiry pipeline continues to be strong. On the international front, low carbon ethanol opportunity in the United States continues to develop positively. Currently, we are in completing FEED studies for several projects that will translate into firm business opportunities in near future. Argentina has advanced the ethanol blending from 10% to 15%, while Mexico and several countries in Africa are also coming out with specific mandates. Indonesia has another opportunity arising in announcement of 5% EBP mandate for blending ethanol use. Our services business is receiving good traction in both domestic and international markets, especially Brazil. We are building a strong distributor network in different markets to offer entire suite of solutions comprising of enzymes, yeast, and performance enhancers. On 2G -front, we have established successful demonstration of our enPriz process at Diosil plant in Panama. Owing to availability of different spec feedstock, our team is now working with IndianOil to define necessary modification in feedstock supply system for the process plant. As for the CBG, we are beginning to witness constructive movement in the market. IndianOil has sought EOI to set up 30 CBG plants in the country. We have received business confirmation for setting up 5 projects from a leading business conglomerate to be set up over the next 15 to 18 months, with an option of five more plants. The execution of the first project has already begun. The business landscape is undergoing very favorably for our engineering business basket as well. On the CPS front, we have received significant orders from leading PEPC companies focused on oil and gas and fertilizer segments. We are taking special efforts to improve the productivity of our Kandla unit to deal with higher loads starting from H2 of this year. On Praj GenX, we have finalized the location for the manufacturing plant, which will be set up near Bangalore. A strong inquiry pipeline is building up for the ETCS segment to be served by this facility. Our PHS business has built a very healthy order book for the year 2023, 2024. High-capacity fermenters are witnessing strong traction. With the semiconductor space rapidly evolving in India, it will also open up increasing opportunities for our ultra-high purity water solutions. I am happy to share that the PHS team has received a BioSpectrum Award for the most promising company for engineering solution services for pharma, biopharma, and pharmaceutical industry. Overall, the business outlook is very positive for our bioenergy, engineering, and high purity business. Before closing, it gives me immense pleasure to inform you that Dr. Pramod Chaudhari has been appointed as the Chairman of the Board of Governors of the College of Engineering Pune Technological University. Dr. Chaudhari will lead the first- ever full Board of Governors formed after COEP became autonomous and got the status of a technical university. With this, I will now hand over to Sachin for his comments on the financial performance. Thank you, Shishir. The consolidated income from operations stood at INR 7.36 billion in Q1 of FY 2024, as compared to INR 7.31 billion in Q1 of last year. PBT for the quarter stood at INR 777.03 million, as compared to INR 542 million in the corresponding period of the last year, showing growth of 43%. Profit after tax stood at INR 586.72 million, as compared to INR 412.62 million in quarter one of the last year. Export revenue accounted for 13.2% of the quarter. Of the total revenue, 79.7% is from bioenergy, 13.6% from engineering, and 6.7% from PHS business. The order intake during the quarter was INR 11 billion, with 64.7% from domestic market. Of the total order intake, 60% came from bioenergy, 31% from engineering, and balance 9% from PHS business. The order backlog as of June 30, 2023, stood at INR 37.78 billion, comprising of 28.1% of the international orders. Cash in hand as on June 30, is INR 8.13 billion. I now conclude my remarks, and I would like to thank all of you for joining us on this call, and would now be happy to discuss any questions, comments, or solutions you may have. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star 1 on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Prathamesh Sawant from Axis Securities Limited. Please go ahead, sir. Yeah. Thank you. Thank you for the opportunity, sir. Quickly, one question: Sir, I wanted to understand the export book. What are the kind of customers do we have? What's the average order book size that we get, and what are the kind of margins compared to the domestic orders? Prathamesh, our, if you look at our industrial business, essentially I would put it in two categories. One is business that we get for our bioenergy segment, and the second is for our engineering segment. Within the bioenergy segment, the customers are obviously those who are putting up ethanol facilities or upgrading their ethanol facilities, or putting up any of the new facilities around you. As of today, it is restricted to ethanol. On the other hand, if it was engineering, then we work very selectively with some very large technology and EPC companies, which are global leaders in their field, for specialists in the oil and gas, fertilizer, natural gas, et cetera. They are setting up facilities for their customers. We are not actually serving the end customer. We are serving, in between the technology and EPC company. Those are two segments, that we serve. Okay. The average order size for the ethanol segment would be higher and the margins? That depends, I mean, in terms of what is the size of the value. If it's an FEL study, it probably would be running to $1 million, $2 million, like that. It's just the study part. If I go ahead and supply the whole greenfield project, then of course it could run into a closer to INR 150 crores kind of level. Remember that in export markets, we don't do any site activity at all. We just supply the critical equipment, technology, and engineering. On the other hand, if you go to the engineering side of business, there again, the order size can vary between $5 million on the lower end to on the upper end, it can even go to as high as maybe $20 million, $20 million-$30 million per contract. Okay. Okay. Sir, on the CBG front, again, we are gaining traction, you've just got the order for 5 projects. What is the average order size in this segment, and how do we play it? Are we just the technology partners or we are in EPC construction and setup of this project as well? The CBG projects are still in India. The model that is emerging in India is when the customers are looking to companies to set up the full project for them. Some other customers may have different requirements, but this particular customer had the requirement that we do the whole thing for them. For them, the project size is of the order of INR 100 crores. Oh. Per project. Okay. Just finally, just one last question from my side. In the current quarter, we saw a lower run rate on order execution. Is it because of the cyclicality or was there some other reason? No, there is no other reason. It's just that the way our order book got lined up the. You know the project nature of the business. Given the site preparedness, project schedule of the customer then, and the progress of the project, in its entirety, it's just that the execution cycle got so defined that in this quarter we could not. There is no other reason at all. Okay, sir. Okay. Thank you, sir. That's it from my end. I'll get back to you. Thank you. Ladies and gentlemen, please limit your questions to two questions per participant and one follow-up question. Thank you. We shall move to the next questioner. The next question comes from the line of Levin Shah from Value Quest. Please go ahead. Thanks for the opportunity, sir. Very encouraging to see this order inflow from the international side. We have around 35%, which is close to INR 385 crores coming from international business. This has come, this doesn't include anything on the ETCA, right? One is, how we are seeing this ETCA pipeline now developing, how far are we from getting that breakthrough order, which we have been talking for some time? Second, on this, if you can throw some light on this oil and gas and fertilizer segment is what we have highlighted. What is the nature of this order, and do you see more such orders from the same industry, or there are other industries where we are in the free for more orders from the international market? Levin, when it comes to ETCA order, which will be served by the GenX facility, as you will appreciate, there we have a sort of synchronization act to do to ensure that the order intake and the absolute business and start of production at the facility are completely synchronized. There are also steps involved in terms of approval of facilities and customers. We are going through those steps. We expect that in second half of the year, we start seeing the ETCA order book build up, so that then that can get start to get executed from the GenX facility. Once contract comes, we do the engineering, we expect the facility to be ready for fourth quarter of this year, but obviously, the order book has to start at least a quarter before that. In terms of the orders from oil, gas and fertilizer, I think these are the orders where these are segments from which the orders come, orders are again for what I would call as. For example, one of the projects is there in which it is where LNG terminal being set up in United States, or there is another one in which the technology is available for improving the recovery from the bottom of the cracker units for an existing oil refinery. There are different applications that are coming through. All of them are largely aimed at ensuring that there's better recovery of the end product. There is a sustainability angle, or it itself handles the sustainable fuel. That goes without saying. Sure. even within These applications as well as we move forward, yes. Sorry. Sir, even within this industry, the orders that we would be getting would be for basically carbon capture or getting the emissions in check, right? No, these contracts are plants and depends. I can share with you on the phone the physical positive thing. Fundamentally, these could be equipment which are heat exchangers, pressure vessels, or skids, as the case may be, or a combination of these. Special purpose vessels, which then go on to be part of the overall process of the plant, which is then put together for either better recovery or a different kind of catalyst manufacturing. It could be different applications, depending on what the technology is all about. Sure. Essentially, these are all focused on clean technology. As I was mentioning to you earlier, that they are. All these solutions from our customers are focused on enhancing recovery, on reducing the footprint of energy or of carbon. There are different steps, right? Biofuel is one step. These are different steps within the existing setup. Without changing the feedstock in a refinery, what can we do? These kind of solutions are offered there. There would be many. There could be opportunities for many more such solutions. Sure. Sir, my second question was on CBG front. Finally now we have seen some order inflow after a long wait, and we have been working on this for some time. This 5 plants, the order that we have got, is it already in the order book or it is yet to be booked in the order? It's not in the order book that we reported. Okay, okay. Also, you mentioned in your opening remarks that IOCL has indicated that they would be looking at setting up 30 plants. Is there any MOU that we have signed with them or any timeline? All these 30 plants will flow to us, or is it that this is their mission statement in the sense that they would want to put up 30 plants? Levin, right now, they have come up with an EOI, you know, it's a public sector, so it has to be open to everybody. They have come up with an EOI for setting up 30 plants in 30 locations in India. After the expression of interest, we'll go. They have specified a criteria for selection of technology and partner. I think we have to go through those steps to see how they develop. The key point, which I actually wanted to indicate, was the fact that there's now a definitive movement happening in the CBG market. You mentioned that for the last almost 18-24 months, we have been talking about possibility of development, and now we can clearly see this is a step in that direction as we see that. Sure. Thanks, sir. I'll come back in the queue. Thank you. Thank you, Levin. Thank you. The next question comes from the line of Shailesh Kanani from Centrum Broking. Please go ahead. Good afternoon, everyone. Congratulations, sir. It seems that we have been working on margin accretive orders for some time, and we have been successful this quarter around. I hope this momentum continues. Sir, my question is with respect to CBG only. Can you share some more details, like, what kind of margins you will be getting? Are they margin accretive to the current order book what we have? Is there any pending thing with respect to why we have not booked within the current order book? Shailesh, I'll answer the in the reverse order. We have a very strict rule about how we book a contract. If I don't get it till 30 of June in a certain advances and contract sign, we don't Even though we may have agreement with the customer, we will not reflect that into our order book. We have a very strict policy on that. That is how. It's now moving. As I said, speaking, we have spent three weeks from 30 of June, so now the limit is there, so I'm happy to share this with you. In terms of, obviously, these, we expect that when we, when we build these programs and these projects, they will be value accretive to the company. Goes without saying. How much? I am not at liberty to say. Fair enough, sir. thank you a lot. That's useful. The second question with respect to our tie-up with IOCL. After some duration, we have been able to sign the term sheets. Can you share some further details, like, what kind of key capital would be allocated, or where this, will this tie-up would start, you know, fructifying in terms of order inflows? Probably FY 2024, FY 2025, you can some, share some more light on this term sheet? This term sheet is signed for the umbrella JV. The idea is that under this umbrella JV, we can take up the projects for different bioenergy products. It be it the CBG or be it the ethanol product matter. As it is an umbrella JV, the term sheet is right now signed. Actual formation of this JV will take somewhere between five months to six months, because there are multiple formalities which we need to take care of. At the same time, we will utilize this period to figure it out, what will be the first project which can be taken up under this JV. As I said, it is a umbrella JV. The structure which we are working out will be having an element of product by product or bioenergy, different activities coming under this JV. Right now, the capital outlays are not yet finalized. It is going to be dependent on which first project we are going to take up under this JV. The JV, umbrella JV, is going to be 60-50 between Praj and IOCL. In this case, we review that, obviously, fructify in say FY 2025, most likely? Yeah, project actually execution will take that kind of a period. Okay. If I can squeeze in last question. Sir, on benefit on margins, how long do we expect this margin, you know, benefit of commodity prices to continue for us since we have fixed price contracts? If you can share some light on that. Thanks a lot. On the raw material side, we have started this moving of the prices, it is continuing for at least last 2 quarters. We are saying that our old orders are getting executed now, rather we have completed all our old orders which were having this impact of raw material. Almost all the orders got executed now. The new orders are coming up with the new pricing formula and new margin formula. Till the raw material prices are not going to behave the way they need to behave, we don't see any impact coming up on account of raw material going forward, negative impact, I think. Margin should start moving on accounts of raw material going forward. Thanks a lot. That's not the only reason why you see this margin upset. There is also a concentrated effort we took to ensure that we improve our order book and our execution efficiencies, et cetera, which is all get reflected, our supply chain. We have taken many steps to ensure that we are able to improve these margins. Smoothing of raw material prices definitely helps a lot. Yes, sir. Thanks a lot, sir. Thank you. Thank you. The next question comes from the line of Dhananjai Bagrodia from Alchemy Capital Management. Please go ahead. Wanted to ask, sir, over and above ethanol, maybe it's a little broader question. Sorry, Dhanraj. Dhananjai, we are not able to hear you. Can you hear me now? Sir, I would request you to please move a little closer to the microphone when you are asking your questions, as you are not audible. Hi. Can you hear me now? Much better, sir. Thank you. Sure. Congratulations. Good set of numbers. Just this might be a little longer-term, broader question. After ethanol, is there any one, like, particular segment, like how we have cracked in ethanol, where we see a very long-term opportunity where we can have, the same scale up as we've seen in ethanol, so that, we're very excited? Dhananjay, you probably recall my opening statements where I mentioned about this conference in Goa and the Global Biofuel Alliance and the delegations that were being held there. I came back extremely excited about the future of biofuels in general. Okay. Yeah, there were more than 18 senior level ministers from different governments, countries, bilateral institutions, and the delegations were very, very rich. One thing was very clear that biofuels are here to stay and grow in a very, very definitive manner. Having said that, I think molecule of ethanol obviously has, and by itself, ethanol has multiple pathways still opening out for it, in terms of the E27 program, the flex fuel vehicle advance, the biodiesel and the ethanol-based chemicals. So there are multiple routes. Then, getting very specific to the question that you asked, in the longer term that you asked, one of the biggest applications that we see globally for ethanol is its conversion to sustainable aviation fuel. That's a very clear understanding across all agencies that alcohol ATJ, that's the pathway on which you convert ethanol to SAF, is the pathway here to stay with its maximum potential. That's going to be one big application. PBT or R&D also is developing very positively, not only in India, but also outside India. We will see this and many other iteration comes. The third iteration that would come through would be around what happens on the different side of the equation, that is the renewable chemicals and materials. What we talked about so far is only an MSP side of, or the mobility side of, Bio-Mobility side of the equation. Mm. Moving on. Bio-Mobility will be here, and the next platform that we call as Bio-Prism, which is the renewable chemical and material that also will be expanded, where ethanol and ethylene both will have a very, very long-term role to play in terms of what happens with conversion, efficiency, et cetera. I personally believe that we will see an expanding canvas, and which will continue to expand into the different dimensions of Bio-Mobility as well as on Bio-Prism or renewable chemical materials. Sure. Fantastic. Where would we be placed? Let's say, obviously, ethanol we've managed to crack, but let's say in the sides of, let's say, Bio-Mobility or the other programs, where would we be in the segment? The proof of concept has been done, or how would that be looking? Dhananjay, we have obviously put a great responsibility on our shoulders, that if we were leaders in ethanol, then when ethanol starts to branch out to different application and different molecules. Sure. We don't give up our leadership position easily, right? We are very focused on working on that to ensure that we also have, what should I say? Our place in the sun, when it comes to the other solutions that I mentioned about. We have no intention to give up. We actually, are working, both at our R&D center Praj Matrix and with our team to ensure, and our customers, to ensure that we continue to build on that position. Okay, sure. Is the opportunity so big that it's not be able to, like, quantifiable, or is it too early to even get into all of that, so sound like? It's little early for me to quantify because we don't know. Just to give you some idea- Uh. Just to give you an idea, and this is, I'm trying to think on the run now as you ask this question. Let us say, 1% blend happens for SAF, and I'm looking 1% blend, okay? Okay. That will create an opportunity for about 14 crore liters of SAF in India and talking, not globally, just in India. Uh. When it comes to aviation market, India is a growing market, fast-growing market, but we are not a big market yet. Uh. SAF, 1% blending, we need 14 crore liters of SAF. That would be 28 crore liters of ethanol. Mm. That's the equation for every 1% in India. Okay. In United States, already, a program is announced for 3 billion gallons, which is 1,200 crore liters over the next five years. We will see a very vastly expanding landscape for SAF, which is by far the largest application, is going to be even bigger than the ethanol itself, because with the two sets, you need ethanol, and you also need conversion of ethanol to SAF. Okay. Okay. Perfect, sir. Very reassuring. Thank you so much. Thank you, Dhananjai. Thank you. Thank you. The next question comes from the line of Lokesh Maru from Nippon India Mutual Fund. Please go ahead. Thank you for the opportunity. Congratulations, sir, for an excellent set of numbers that you posted again. Just one thing wanted to get a sense on, in our previous concall, you had highlighted that since our base is quite heavy, right, because of the EBP20 wave that we have seen in the last two years. This year could be kind of flattish on order intake. We are seeing growth yet again. You have also highlighted five CBG projects, which could come up to INR 500 crore confirmation already to be in our next order inflow for the quarter, right? We are actually seeing traction across all our segments, be it G-PAS or could be the end of year, 1G small in U.S. is it fair to assume or understand that we might outdo our own expectations and rather post INR 4,000+ crores of order inflow for the year? Is it safe to assume that, or how would you portray the picture going forward, since everything is falling in place for us again within adjacent segments of 1G itself for the year? Lokesh, thank you. As we have been talking that the horizon and the canvas is expanding from a single feedstock, single product, to multiple feedstock, multiple product horizon. We talked about different molecules, ethanol, we talked about CBG, we have talked about SAF, because of renewable chemicals and materials, the applications that they expand. Both in India as well as international market, the ETCA segment that we talked about, the clean tech segment that we have mentioned, even this quarter order book is the gone quarter order book is reflecting on that. We have seen that we are no longer restricting ourselves just to one segment or one market, but we are actually expanding our offerings and our solutions to a much wider market with wider product range, wider solutions range, with wider feedstock. It's a multiplier effect. You're right, EBP20 is, of course, a very important program to which we are a very proud participant. At the same time, we are also ensuring that as we start to grow forward, we are also able to build alternate avenues which will then take us even further ahead, and that's the plan that we have. That's what we are working upon. We strongly believe, and that's what I was telling earlier as well, that there will be expanding applications of ethanol, which will create multiple opportunities for us, both here as well as outside India. Safe to assume, recurring INR 1,000 crore or plus, order inflows for the year, subsequent quarter? I couldn't catch your question. Sir, fair to assume INR 4,000 crore of order inflow for the year? That's our aim, that's our target, we can't commit to that. That is the number which you like to consider from your point of view. Yes, we are not looking for figures, we are looking for growth, and we are looking for higher numbers. Got that, sir. Thank you so much. Okay, Lokesh. Thank you. The next question comes from the line of Amit Anwani from Prabhudas Lilladher Private Limited. Please go ahead. Hi, sir. Thanks for taking my question. My first question is I just would like to understand what is the current status on yet to be tendered out in crore liters, if you could throw some color on that? Second thing, this FCI ban, I assume now I think yet to be tendered out plant would be more focused on grain-based. Can we expect the near term, at least, quarter one impact will be there for the domestic bioenergy offering? you know, when the EBP20 program was started, then obviously, as the program started to roll out, two factors happened. One, of course, as you are aware, that feedstocks were utilized to add not only molasses, but the sugarcane-based feedstocks were expanded as to molasses, B, juice, et cetera, but also chassis feedstock and the cellulosic feedstock. The feedstock got expanded on one hand, and when we went to the first phase, the government is now evaluating as to where are these capacities coming up, in which states of India, what kind of fuel and ethanol requirement is there. We know that we mentioned last time that they realized that in nine states of India, there is still going to be deficit capacity production, because not enough capacity has been built in those nine states. Another 4 crore liters came from there. As we move forward, I think the next stage is what capacities that got ordered out are actually getting built on the ground, and that will be the next step that we need to through. I think from there it will start to move forward because it is also our understanding that not everything that got ordered out may get built or may perform at its design plant capacity level. I'd like to believe that large plants will work at the plant capacity level. There could be different factors that could lead to that from a customer's operations perspective. I think that will further drive capacity creation. There is another dialogue that we have not talked about yet, but it will start to become material in time to come, and that is the carbon intensity of this ethanol that is getting produced, because as I was mentioning, that we will need ethanol as a feedstock for said production. There, the carbon intensity of the ethanol being produced will become a very important step, and that itself could create another set of opportunities for low carbon ethanol production in the country. While I not have a number, but I think this is a rolling ball, and right now we don't see, as I was mentioning in our opening remarks as well, that we are not seeing any slowdown in the inquiry pipeline. Given the fact that there is a temporary blip right now because of the FCI decision on rice, but we believe that that would not be, the supply chains will realign themselves for our customers, and that's what they will do in a short period of time, and that's how we'll move forward in the country. Right. yet to be tendered out, if you would like to throw some color there? No. There is no tendering of the projects, Amit. What the government does is they look for supply confirmations from the producers. Just. Information that these oil companies get, then they map and see in which state is deficiency or they're going to get it. It's very, what I would call, it's very on the ground reality check kind of a process. Once that check happens, then we will know what's the deficit, in which state or in which part of the country, and where is the supply, where is the capacity, then it gets sort of readjusted again. Yeah. Just actually was trying to understand, to meet EBP20, how much crore liters are pending for to be tendered out? If you have any, sorry. As I have said. There, this is what I'm trying to explain to you. There is no tendering out when we right now we are EBP 10, right? As a country. That's between 10 and 12. When that starts to move forward from 10 and 12 up to 20, there is a step-by-step process through which it will go. The first aim of the government is to actually make sure that EBP 10 is available across the country. At all the outlets. That's the first step. Depending on this volume development across the country and availability, they will decide how much they want. This is not a fixed number right now. Right now, the current production capacity is able to meet EBP 10. Our target is to go to EBP 20. All right. My second question on CBG, already you highlighted that there will be 5 plants in pipeline and INR 100 crore each. I wanted to understand more with respect to viability of CBG plants. Second thing on our market share, any competition there, and what is addressable market out of INR 100 crore each plant, and what are the capacities in each plant? Amit, there are very different factors right now. We, as we were mentioning earlier, over the last one and a half to two years, we've been talking about how the CBG market will come into being, given the fact that the whole ecosystem needs to co-develop, and some of it has happened before, some of it happened along with the plant, et cetera, et cetera. We are seeing that movement happen now because this is some of the very important players that started. As I mentioned, Indian Oil is already taking, taken out a EOI for 30 plants. That ecosystem will start to roll out in a structured sort of fashion, and that is what would lead to creation of this capacity. The five plants that we have talked about, as I mentioned earlier, each plant for us is of the order of INR 100 crore, and we'll build these five over there in the next 12-18 months. Right. This SAF, unfortunately, are we expecting any orders in next 12-18 months, 24 months? Any color on that? Well, I thought I should also answer one more question that you asked. Yes, there is competition in CBG space. We are not. There are good companies, there are multinationals, there are India-headquartered companies that are competing with us in the field. That is how it's progressing. What was the question on SAF? Is there any visibility next 12, 24 months to get some orders on SAF? I think there is, I do not know. Yes, there will have to be capacity build because there is none right now. If we have to go and blend SAF, in 2027, 1st January onwards, there is a co- compulsion across the world for airlines to start blending, you start using blended fuel. That is for sure, and we can work that backwards. Next 12 months, surely we should see some kind of what I would call it, a traction on the market. We have talked about the Indian Oil JV. Sachin was mentioning about it being a number of JV that covers biofuel. SAF is one of them. We will work with them to see how country's needs can be fulfilled under the umbrella JV. One last question, if I can squeeze in. This quarter, the order inflow of INR 1,100 crore, I can see the engineering business at INR 340 crore, which is much higher than the previous 5, 6 quarter averages, and even closer to the full year last year. Are we expecting this trend to continue as you highlighted the opportunities in the export markets in the coming quarters? I think what's important to notice is that the engineering businesses will become a significant portion. We've been working on that. I've talked about it. The ETCA opportunity that I talked about in the second half of the year will definitely unfold under the engineering umbrella. We are confident that our engineering businesses will also continue to grow. They are more industrial orientation businesses, so we see that as export businesses, which is good for the company. We are confident that as the phenomena of Energy Transition and Climate Action starts to unfold as I mentioned, in second half of the year onwards, we'll start seeing a very constructive movement for all the booking for our engineering portfolio as well. Yeah. Thank you, sir. All the best. Thank you. Thank you. The next question comes from the line of Vikram Suryavanshi from PhillipCapital. Please go ahead. Yeah. Hi, good afternoon, sir. Just looking at our execution number, I hope we have been able to maintain on YOY basis, but what I was really looking at, a slightly better execution, given the kind of strong growth in order book, as well as now we are reducing seasonality of our execution. Was there any disturbance in execution, or how do we should look at, execution pickup, going forward? Vikram, the way in which these orders got executed during this quarter, and I think in the opening remarks, Shishu was mentioning the same thing. The execution requirements from the customer was of a different nature, and that's the reason how it got reflected into our revenue. We strictly followed the timeline or the ask from the customer for the delivery from our side. What was required to be delivered, that was delivered in this quarter, one. Two, the timing of orders intake is also very important to decide how the execution happens. We have seen some kind of higher order book coming up in the March month, and even though we looked at it from the quarter point of view. Naturally, the initial phase of engineering was going on, and not on the delivery side, we had done anything for those projects. I think those projects will start coming up in a bigger way from H2 side. We will see execution far bigger or far more than the H1 as compared to what we are seeing right now. Got it. Yeah. The second question. Sorry, Vikram, I must also add that monsoon is one more factor which plays an important role in the civil activity. Civil activity is generally in the scope of the customers of ours. Till they are not ready, we just can't put up our plant over there. We have to wait for that activity to get over. That's one more element which generally plays its important role in the first quarter. Right. I was actually more keen that was that very significant, because we also have manufacturing in Gujarat and also probably untimely rain and other disturbance over there also. One more thing which I must tell you, Vikram, from the readiness from our side for execution or capability building, which we had to do on our side, we are ready to take higher loads also, and which we have grown in the March quarter. There is no problem on our side to get projects executed. It was only the rain is the order which you had happened, the requirement from the customer side, and the last one, which I mentioned on the monsoon. Those are the factors which played its role in this quarter. Yeah, understood, sir. The second question on the CBG projects, we have already discussed a lot, but just to get a sense on the feedstock, what kind of feedstock these projects are on? Particularly, will this can be pushed into CGD network through pipeline, or basically these are the standalone projects where conventional being nearby. If you can give some idea about feedstock and the distribution side of this project. The projects which we just talked about under the LOI, those projects are going to be based on ag waste. They are ag waste-based projects. The second part of your question was related to whether it is going to get connected to CGD network to see whether they are going to be a part of CGD network or they are going to be part of the ONGC network from the distribution point of view. It could be mix of both, Vikram, actually, depending on how the CGD network tells us. Because an ideal situation is to push this into the CGD network, but it depends on where the plants are and where the CG networks are. That's a question that is still... It's not become a determining factor for customers to set up the plant. Obviously, if there is CGD network, it will definitely help. Okay. The gas output would be how much in terms of tons or something like that? If you can give some range in terms of output side of capacity for each project. Each of these plants will be, 20 tons per, hour there. Around 20 tons. Sorry, 20 tons per day of gas. Okay, got it. That's all right. Thank you very much, sir. Thank you. Thank you. The next question comes from the line of Naushad Chaudhary from Aditya Birla. Please go ahead. Thanks for the opportunity. Some clarification, sir. Firstly, on the CBG and other future projects, in terms of overall business economics, especially on the margin and working capital, side, would it be similar to our existing model, or, there would be changes in terms of especially on the working capital and advance for the customer side? On because of the CBG or because of this new order intake which we are looking at, I don't see any significant change in the working capital cycle. The payment terms, the advances and all that are more or less in line with what we are currently doing. I don't see a big change happening on the working capital because of this new order intake, which is going to happen. Okay. Second, on the CBG order side, you indicated 30 projects Indian Oil is planning and 5, so we have got. Does that mean 25 have gone to other players, or is it yet to be announced? No, sir. Both these items or both these statements of ours are independent of each other. 30 plants of IOCL is what been just, the, what I can say, announced by them. They have floated the EOI. We are not talking about IOCL related with 5 CBG plants. We are talking about very different set of customers for these 5 parts, 5 plants for which we have received the EOI. Let me just clarify on this CBG. We are talking about it for a reason, because, the question was always used to be asked to us that what is happening on CBG front, is there any development or not? Technically, we are for the first time announcing even the LOI, on a, on a call. Generally, we don't talk about LOI, or we don't put a number for our inquiry basket. For the first time, we wanted to give you a flavor of what is happening in the market, how the market is responding, what market is thinking, what we are doing on this front. Let me clarify, these five plants which we are talking about are not set of 30 plants announced by IOC. They are independent of these five plants. Right. Right. In terms of the size of the plant, if I'm not wrong, initially it was expected to be, I think, lower, INR 100 crore CapEx per plant. Is this something at the higher end of the CapEx? Future project should be of similar size or should be of lower size? It depends what is the capacity going to be for a plant, and that's what is going to decide the CapEx. As earlier mentioned, the capacity is going to be in the range of 20 tons per day, so naturally, CapEx is going to be on a higher side. Earlier, we used to talk about 10 tons plant, 15 tons plant. Those were even smaller as compared to what we are talking right now. The CapEx will completely depend on what is the capacity of the plant. Our existing order book does not reflect the CBG orders, right? Some portion, not of this five which we have mentioned, because this five, again, I'm clarifying, these are MOI, these are not orders. They are not forming part of our order book. Okay. Lastly, last year, we were talking about some bio fermentation plant. We had cracked some U.S.-based pharma customer, and also, some of the project we were working on in the Brazil, and we were expecting it in FY 2024. Anything you want to touch upon on these two? You are referring to our international order or other international project which we executed for pharma grade alcohol? Yes, yes. Okay. That was during the period of COVID period. Naturally, the requirement of pharma grade was at its peak, and that project which we had executed, currently there is no big requirement coming up on the pharma side. We are not executing any pharma grade alcohol plant right now. Okay. Yeah, that's it from my side. Thank you, and have a good day. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one or two per participant. Should you have a follow-up question, we request you to rejoin the queue. The next question comes from the line of Aash Shah from Elara Capital. Please go ahead. Good afternoon, sir. I just had one question. The IOC JV will be functional by the end of FY 2024. Henceforth, whichever CBG plant that IOC puts up, will it be via this JV, or will it be open to the outside market competition as well? The CBG project that get decided to be put under the JV structure will obviously go through that. As Sachin was mentioning, the JV is an umbrella JV. There is special purpose vehicles below the umbrella JV that will actually be set up to put up these projects. To be very specific on the answer, there is no restriction for IOCL not to put up the project outside of this JV or for us to set up the project outside this JV. This is. In that sense, it is not binding to each other. Okay. Is it the same case for all the other biofuels as well, like SAF, biodiesel and all the other ones? Yes. Okay. Okay. That's all from my side. Thank you. Thanks. Thank you. The next question comes from the line of Ankita Shah from HDFC Securities. Please go ahead. Yeah, thank you for the opportunity. We wanted to understand the margins. We had seen a good improvement in EBITDA margins, and I just wanted to understand the sustainability of the same. What are the margins we made in the CBG segment, and export orders will be in what range? Ankita, your voice was cracking, but if I've understood your question related to EBITDA margin for CBG, our margins more or less for all the bioenergy projects are going to be in some kind of a range. It's a niche area where we are just putting up now, so it will take some time to discover what will be the right EBITDA levels for CBG projects. Yes, our export will definitely carry a higher margin as compared to our domestic projects. That much I can tell you. Exports will be in what range? Exports will be definitely at least 500 basis points will be higher than the domestic end projects. Why we see? For a reason, because in the domestic projects, we execute only, we execute the project, and then we do the project activity, which carries comparatively lower margin as compared to the engineering activity and the manufacturing activity. In the international market, we only do engineering, we do, supply of equipment, but we don't carry out project activity there. No site activity. No site activity. That's the reason why these margins are little different as compared to domestic and international. Got it. Got it. Also, sir, I take cognizant of the improvement in the export order that has happened, but if I look at the segment-wise, where, you know, bioenergy has gone down, and also in on absolute terms, order inflow on a YOY basis has kind of remained stable. Is the market, you know, Understanding, is the market opportunity for the, on the bioenergy segment is slowing down, or we are slowing down here, or, you know, any impact on market share? Just wanted to understand the order inflows from the bioenergy segment. Ankita, I think, one quarter numbers will be very wrong for us to make any assumptions. Although what you're saying is very valid observation. As I was mentioning to you earlier, that the nature of or the pie, of the overall pie, shape and size and characteristic is set to change for us. We talked in terms of both domestic versus international, so we are seeing more international. Relatively speaking, more international, that's what I mean. Relatively more. That is not less domestic, but on a percentage term, obviously, the international business starts to grow, it will occupy a larger pie, a larger slice of the pie. Domestic business will also grow at different. As we mentioned, we are not seeing any letup on the bioenergy pipeline as well, on the ethanol pipeline as well. If it comes to ethanol as a segment, where again, domestic plus what we'll see on the bioenergy side for the export side as well. We mentioned about the US opportunity, and you and I are both aware that right now, US market are a little slow on the decision-making on owing to the interest rate hike that are taking place there. I know from the activity level and our engagement dialogue and what we are doing on the ground in terms of the engineering efforts, that I mentioned about the FEL studies that we are doing for several of our customers for the low carbon ethanol. I think that is the start to it. There may be a quarter mismatch that they won't exactly be matching, but nothing other than that. I think we are equally bullish both on bioenergy segment and engineering, domestic and export. Okay. Just one last on the EBP side, you said we have already reached 10%-12% of blending. How much awarding is still left to reach 20% blending, and how much do you expect over the next one year? Ankita, as I mentioned, at country level, it's between 10% and 12% now, and we need to go to 20%. That means the availability of ethanol has to almost double from the current levels, if not more. And then there are other factors that will come into play, that what the regional or state-wide availability, so we may have some imbalances to be corrected out there. There may be another balance or imbalance situation arising out of the fact of feedstock availability. There may be another one out of operation, efficiencies of the installed plants and their capacities, and their seasonality. The monsoon rains may be punctuated, it happens. Those factors will also start to play in. I think we have not gone through one full rain cycle yet, I think it's the first time that we will go through a rain cycle in this October, when we will then start to understand what kind of offtake, what kind of stock level, what kind of supply chain that needs to get established. Maybe a little early for me to comment, but just to tell you that we are still at halfway of our journey on BB 20. Miss Ankita, may we request you to return to the question queue for follow-up questions, as there are several participants waiting for their turn. The next question comes from the line of Sagar Kapadia from Anvil Shares. Please go ahead. Hello? Hello. Hi, Sagar. Hi, Sagar. Sir, can you please give me the breakup of the international orders, INR 385 crore. They're into which segment? Energy, bioenergy or engineering? Sorry, Sagar, maybe please repeat your question because it's... Your voice is not clear. Sir, this, international orders you got, INR 385 crore this quarter. Yeah. Can you break them up into the bioenergy segment or engineering segment, this figure? There is a small segment in this quarter from the bioenergy, but the large component of this is from the engineering business. Engineering. Sir, from which geography, USA, EU or Brazil, this? For the engineering business, yes, it's USA, sir. USA. Okay. Okay, sir. That is what I wanted to... Sir, one more thing. This 100 crore CapEx you are going to put in the Praj GenX. What is the asset or more which you have kept for this CapEx? The first leg of investment we are looking at of around INR 100 crores. Yeah. On the full capacity utilization of this facility, it will be somewhere about INR 1,500 crores. INR 1,500 crores. Okay. Okay, sir. Thank you. Thank you. The next question comes on the line of Jay Shah from JM Financial Services. Please go ahead. Hello. Congratulations, sir, for a good set of numbers. Sir, I just want to know one thing that, you know, there is so much bullishness and order book about ethanol. Sir, the by-product of ethanol, at least in the sugar industry, is the spent wash. Are we also working on any technology where, you know, we can treat the spent wash? Because disposing the spent wash is a big issue, right? What's the question? Are we working on technologies that can help also the distilleries to treat the spent wash? Yes, of course. We already have several solutions in that space, and, as you know, all distilleries are now zero liquid discharge. We have definitive solutions in that space of zero liquid discharge. And depending on what the... If somebody can opt for CDG production out of spent wash, somebody can opt for power generation out of spent wash. I'm taking that when we use the word spent wash, is more around the sugar-based distilleries, but there are also grain-based distilleries that will also produce their own equivalent of spent wash, and that is a very fine use in terms of the animal feed, DDGS, as it is called. There are several solutions, and all of them are available from our end. All of them. You are saying we only have use cases where the distilleries are using our solutions to treat their spent wash? Yes, yes. Okay. There are already 45 plants in the country that use spent wash for production of biogas, and those plants have been supplied there for many years now. Okay. Okay, sir. Thank you so much. That was my question. All the best for the future projects. Thank you, Jay. Thank you. The next question comes from the line of Manish Goyal from Think Wise Wealth Managers. Please go ahead. Yeah, thank you so much. sir, my question is related to in terms of our evolving new technology on 2G for advanced biofuels, as probably the challenge would be there on generating the incremental requirement from non-food based feedstock. just like, you know, how is our technology partnership with Sekab and Gevo evolving for our foray into international markets? And I believe Sekab had already done a pilot plant with the forest material residues. any sense on how the technology is evolving, and how is Praj's relationship building up with these two partners? Related question in terms of our own independent technology, which we have implemented at IOCL, how is the yield competitiveness improving in terms of how much are we near to the commercial viability as compared to the traditional ethanol? How has it progressed maybe in the last two, three years, and where do we see it going forward? Also, we were expecting some breakthrough for 2G technology from the Europe market after some of the customer visits. Any progress on that? Sorry for the longish question, but also related is that, is Praj dependent on both these partners, Sekab and Gevo, for the international market orders? Manish, thank you. Great question. First of all, we enjoy great relationship with both Sekab and Gevo. Just to clarify on the 2G ethanol technology, where your specific question was, we have our own technology when it comes to, well, we have a technology for both. When it comes to treatment of heavy residue, like rice straw, wheat straw, et cetera, then we call it enfinity, and that is 100% Praj owned. When it comes to forest residue, treatment for ethanol, the technology is owned, jointly owned between Sekab and Praj. Yes, you're right. Sekab has a pilot plant in Sweden that they operated for many years. We actually partner with them to help them take the technology development to commercialization level, and we are now ready with it. The technology is owned, jointly owned between us and Sekab. We have the responsibility to take this forward in the market, which is what we are doing now. We are in dialogue with several customers in Europe for both enfinity and Celluniti, as we call the technology that we have on the solid residue side to treat. With Gevo, the relationship is different. With them, the relationship is about the entire pathway of the fat story that we talked about of saying, convert the feedstock to an individual call and then convert that to fat. That is where we are working with Gevo. Both, we will work with them when they put up their own projects, and we will also be front-ending the technologies when it comes to Celluniti, because that's the role that we have, and executing the job as well. Any, like maybe if you can give a sense as to globally how these technologies are evolving, and how would Praj be probably positioned in that? For second generation ethanol, we have said this in the past as well, that the most likely first market for this technology is going to be Europe because of the RED III mandates that have been tabled there and approved and passed into law. We expect that there'll be a positive movement on the war, threw everything into a bit of a turmoil, but now as things settle down, we are beginning to see reopening of the dialogue. I'm sure that once the European summer is over and people are back to their workplaces, we'll start to see traction in that direction as well. Very clearly, Europe is a big market where this will happen. We are in dialogue with several customers to set up these facilities for them. As we go through the year, we'll keep you updated. You very correctly surmised, the world is watching on the Panipat project, which we have just commissioned, and as I was mentioning earlier, there is a re-calibration required on the supply chain of the feedstock. Right now, we're not able to get the feedstock to our pre-treatment system because of the different spec availability. That is being corrected now, and as soon as that is corrected, we'll be able to keep you informed on what next. Once that is established, then we'll be able to take it to the world. Okay. In terms of yield improvement or maybe, commercial viability side, what do you expect, sir? Where are we in terms of. Manish, as we see it, the yields are fairly okay right now, and we can keep changing the yields, then there's also an operating cost question that comes into being, at what cost you want to improve the yield? The good development for both the Celluniti and enfinity space, second generation ethanol spaces, the development of co-products. I think that is the important dimension there as to what can we do? Because when you start treating a straw, or a forest residue, several streams come out, the non-ethanol streams, as I call them. These streams have to be then further processed to create higher value-added products. For example, we can create Bio-bitumen, we can create Renewable Natural Gas, or RNG, as we call it in India. We can produce fertilizer. We can produce dimethyl sulfate. There are things that one could take up for valorization. I think that is important, that how the co-product developed. You'll be happy to know that we have already developed the bio-butanol strain. We already developed the technology for lignosulfonate. We have already developed the technology for RNG. We've been working here constantly to ensure how can we improve the viability of these projects and these plants. There are other factors as well as to what price, the second generation ethanol gets priced at, because it is very low carbon intensity ethanol. Obviously, it is very different from the other ethanol. This will have a very important role to play when the tax markets start to develop. We will see this development. This is slightly long-term, but this is what we see in this space. I hope I answered the question. Yes, sir. Sir, when do we expect the two more CB 2G plants? It's mentioned in annual report that HPCL and- Yeah, they are progressing well. They are progressing well. We have supplied all the equipment from our end that we are supposed to, the project are now under construction stage. We expect that during next year, they will start with the second half of next year is when they will go up for commissioning. Sir, last question on the, our pilot plant, which we are probably setting up for polylactic acid, and probably food grade as well. When does that plant start, sir? That would start at end of this year. Okay. Thank you so much. Thank you. Thank you, Manish. Thanks a lot. Thank you. I now hand the conference over to the management from Praj Industries Limited for closing comments. Thank you, everyone, for your time today. In case you have any more questions, please feel free to write us at info@praj.net, and we look forward to meet you again on next analyst call. Thanks again, and have a nice day. On behalf of Praj Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.