Praj Industries Q4 FY26 Earnings Conference Call | Concall.in

追加: 2026-06-03

[00:00:00]Ladies and gentlemen, good day and welcome to PR Industries Limited's Q4 and FY26 earnings conference call.

[00:00:10]As a reminder, all participant lines will be in the listenonly mode and 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 touchstone phone. I now hand the conference over to Miss Purvangi Chen from Valerum Advisers.

[00:00:31]Thank you and over to you ma'am.

[00:00:35]>> Thank you. Good afternoon everyone and a very warm welcome to you all. My name is Purangi Chen from Valerim Advisers. We represent the investor relations of Pra Industries Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings conference call for the fourth quarter and financial year ended 2026.

[00:00:54]Before we begin, I would like to mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature.

[00:01:01]Such forward-looking statements are subject to risk and uncertaintities which could cause actual results to differ from those anticipated.

[00:01:09]Such statements are based on management's belief as well as assumptions made by and information currently available to the management.

[00:01:17]Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decision.

[00:01:24]The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Now let me introduce you to the management participating with us in today's earnings call and give it to them for their opening remarks. We have with us Mr. Ashish Gwad, managing director and Mr. Sachin Roule, joint managing director and chief financial officer.

[00:01:49]Without any delay, I request Mr. Ashi Kaquad to start with his opening remarks. Thank you and over to you sir.

[00:01:56]>> Thank you. Uh good day everyone. Welcome to PR Industries earnings call for Q4 and FY26.

[00:02:03]Trust all of you had the chance uh to go through the results of uh the quarter and full year ended 31st March 2026. Our performance in quarter 4 and full year of FY26 was impacted by several external headwinds. Despite these headwinds, we continue to progress on our strategic vision which is aligning to the glo global mega trends of energy security, energy transition and sustainability.

[00:02:32]The current West Asia situation has once again highlighted the need for energy security for every nation. This will give further impetus to the production and usage of biofuels across all agriich countries. India's biouels ecosystem is aptly moving from just the policy intent to the commercial market readiness with coordinated actions across different stakeholders like the government of India, oil marketing companies, automobile manufacturers, technology providers and production companies. Amid global geopolitical uncertainties and recurring energy supply disruptions, India is taking progressive and proactive steps to strengthen our energy security through higher bio energy usage in transportation fuels. The Bureau of Indian Standards has now notified fuel specifications for E22, E25, E27 and E30 petrol blends in addition to the E85 and E00 building upon India's successful E20 program. This notification sends a clear preparatory signal to all the players in the ecosystem to be ready for higher ethanol blends and flexual vehicle adoption.

[00:03:54]Simultaneously, the government has uh shared a concrete road map of E85 E00 fuel infrastructure that development with automobile manufacturers and OMC's.

[00:04:06]The rollout begins with 150 numbers of E85 and E00 retail outlets across Delhi, Mumbai, Pune and Nagpur within the next month. This will scale to 500 outlets across major metro regions including Delhi NCR, Maharashtra, Bangaluru, Chennai, Kolkata and Hyderabad within the next 6 to 12 months followed by a target of 5,000 E00 dispensing stations nation nationwide within 24 months.

[00:04:41]Automobile manufacturers are responding well to this policy direction with the development of multiple flex wheel vehicles as well as E-hund vehicles.

[00:04:51]Their commercial launches are also in the offing starting in June. Ethanol is increasingly emerging as a strategic molecule beyond transportation. it its applications are expanding into agricultural machinery and generator sets reflecting the growing readiness of uh for diversified ethanol usage across sectors. Another major inflection point expected for ethanol usage is ethanol to jet adoption for SAF production. A draft policy on SAF is ready and the blending mandates are expected to come in 2027.

[00:05:29]Now coming to our PR business updates.

[00:05:32]Our 1G domestic business continued to experience a slowdown in green field fuel ethanol products. We believe this situation will improve after announcement of higher blending mandates. In the interim though we experienced an increased demand for uh green field ENA plants. PR has a clear technology edge for ENA or extra neutral alcohol.

[00:05:59]Uh we also see a growing demand for our brownfield solutions where customers are prioritizing operational efficiency uh improvements and value added core products u adding uh such as the distillers uh corno or DCO. During the quarter, we secured a good number of DCO orders and have a robust inquiry pipeline. Our fuel ethanol projects backlog um execution front. The project execution cycle continue to get extended due to funding and other challenges. We had mentioned in our previous call that our technology for bio isobutinol or bioibba is ready for commercialization and scale up. We are expecting our first order in the current quarter of FI27.

[00:06:52]As we know the volume requirement for diesel blending is much bigger than petrol. The use of bioba in diesel blending is going to be a significant step in our nation's biofuels journey.

[00:07:06]In the international market, there are some positive developments. For example, the US House has passed legislation that allows nationwide sales of gasoline or petrol with 15% ethanol blend. We are closely monitoring these developments and engaging with the customers since this will result in opportunities for PR in America's region. There are also positive announcements in countries such as Indonesia, Vietnam, Kenya, Panama, Argentina, Guatemala, Costa Rica and Bolivia for increasing share of biouels in their energy mix. Praj has successfully implemented projects in these countries in the past and we are engaged in these markets for business development. On CBG front, the capacity ramp up of a few of our plants using Napier grass and rice straw as mixed feed stock is underway. While there is a good inquiry pipeline for projects based on press and Napier grass, there are some delays in order finalization.

[00:08:12]We are also looking at international opportunities in our CBG business based on our success in the Indian market.

[00:08:20]Amid rising crude prices, geopolitical tensions and supply disruptions in the Middle East, India's focus on compressed dry gas is becoming strategically important. Honorable Finance Minister Mrs. Nurmala Sithar Raman recently high highlighted the concerns around three Fs fuel fertilizer and foreign exchange reinforcing the need to reduce import dependence. In this context CBG offers a strong domestic solution produced from agricultural residues and organic waste.

[00:08:55]CBG CBG can reduce the dependence on important fossil uh fossil fuels while its co-roducts fermented organic manure or FOM and liquid fermented organic manure or LFO can help lower reliance on chemical fertilizers import.

[00:09:13]Additionally, CBG can also be integrated into urban pipe natural gas networks to support domestic cooking energy needs.

[00:09:22]Maharashtra has recently approved its state CBG policy 2026 with an outlay of rupees 500 crores aimed at accelerating waste to energy infrastructure, promoting circular economy models and expanding clean fuel production across the state. Our life cycle services business is growing steadily with growing traction for our performance enhancer solutions as well as biogenic CO2 capture solutions. Our more than thousand plants using PR technology uh in um various parts of the world including India and overseas is a source of steady growth for our life cycle services business. On the SAF front, we are completing the basic engineering order for one ethanol to SAF plant for our international customer. We are in discussions for the detailed engineering order for the same plant. Moving to engineering businesses in quarter 4 FY26 we are pursuing several opportunities.

[00:10:27]However, owing to uncertainties around raw materials cost and supply chain disruptions we deferred the final negotiations. Some of these orders will now be reflected in FY27.

[00:10:39]On the pro prag genics front data center segment is coming up as a promising segment. We are in final discussions with one of our key customers for modularized solutions for the cooling systems for their international data centers for our ZLD and PHS businesses.

[00:10:59]Battery semiconductors solar panel manufacturing segment is opening up as new opportunity. We are pursuing opportunities where both businesses will offer joint solutions to these customers. We have closed one such order with a semiconductor semiconductor company in the current quarter. Overall, we believe the external business environment is going to remain uncertain. However, our strong technology edge in bio energy and advanced manufacturing capabilities in modularization will help us deliver improved performance in FY27.

[00:11:35]With this now I will hand over to Sachin for his comments on the financial performance. Thank you.

[00:11:44]>> Thank you Ashish. Good day everyone. Let me take you through the financial highlights for the quarter and the year ended March 3126.

[00:11:51]The consolidated income from operations stood at rupees 8445 million in Q4 FY26 as compared to 8598 million in Q425.

[00:12:01]Profit before tax before exceptional item for the quarter stood at 15.4 million as compared to 582.5 million in the corresponding period last year.

[00:12:10]Profit after tax stood at 116 million in Q4 as compared to 398 in Q4 of the last year. For the full year ended March 31st, 2026.

[00:12:22]Income from operations stood at 31679 million as against 32280 million in FY25. PBT stood at 763 million as against 2704 million in FI25. PAT 426 came in at 238 million as against 2189 million in FI25.

[00:12:41]Export revenues accounted for 36% for FI26. Of the total revenue 67% is from bio energy, 22% from engineering and 11% from PHS business. The order intake during the quarter was 6580 million with 79% from domestic market and of the total order intake 86% came from bio energy 2% from engineering and balance 12% from PHS business. The order backlog as of March 26 2350 million comprising 66% of domestic order with 78% from bergy, 16% from engineering and balance 5% from PHS.

[00:13:21]Cash in hand as on 31st March 2026 stood at 6.12 billion. The board of directors proposed a final dividend of rupees 3.6 six per equity share at the rate of 180% of the face value of this two per equity share for the financial year end date 31st March 2026 which is subject to the approval of shareholders at the forthcoming annual general meeting with this I will conclude my remarks thank you for joining we would now now be happy to discuss any questions comments or suggestions you may have >> Thank you very much ladies and gentlemen we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone.

[00:14:08]If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question assembles.

[00:14:36]We take the first question from the line of Naven from NK Trading Company. Please proceed with your question.

[00:14:44]>> Hello sir. Good morning.

[00:14:47]>> Good morning.

[00:14:55]>> I'm sorry to interrupt Mr. Naven. My audio is not very clear, sir.

[00:15:00]>> If you are on your >> if you're connected on your headset, I would request you to please switch to a handset. Sir, your audio is not very clear.

[00:15:09]>> Better now.

[00:15:12]>> Slightly better.

[00:15:15]>> No, not really.

[00:15:19]>> Okay. I'm just uh Is it better now?

[00:15:25]Okay, we will try to understand your question. Go ahead.

[00:15:29]>> Yeah, thank you. So, I'm being invested from past 3 years and from past years I'm seeing little bit underperformance in our margins and profits and uh other things and uh even we are being a R&D company with all the innovations we are doing why we are not able to maintain the margin and we are reducing the margin profits. Can you give some uh light on that?

[00:15:53]Sure. Okay. Thanks for your question, Naven. Yeah, this is a question on several people's mind. Uh I'm sure so I will answer that for everybody. Uh firstly, uh as you know, PRA has had a good run when the EBP20 program uh was launched and completed well ahead of its schedule. It's a it's one of the most successful uh biouels program in India.

[00:16:20]And that was a time when a lot of new green field plants for ethanol have come up and Braj has had a lion share in terms of uh you know uh making those plants and uh constructing those plants.

[00:16:34]uh since that time uh the capacity that was required for blending the uh ethanol in petrol has been achieved and so there is a reduction in uh the number of plants uh for ethanol uh as of now uh in the current steady state. However, as I mentioned in my opening remarks that there are new blending mandates which are being talked about and we expect that that will have a positive impact on uh the new capacities uh to be looked at. Uh the second thing I would say is uh during this time the other business which uh we have been uh working on is the PR genex business and uh we have been investing into that business over the last 2 and a half 3 years to make it ready for a large capacity to serve the requirements of equipment and modular plants worldwide. And because this is a a large investment that takes time, there is a gestation period. For the last 2 and 1/2 hours, that investment continued. We believe that during this period, we have been able to build some customer base who have approved these facilities and we will be seeing the positive impact of that and the order books in the current year of FY27.

[00:17:56]So yes, you are right. In the last 3 years there was a stagnation and the profits were also affected because we were investing into PR businesses and now we should start seeing some uptick from FI27 onwards.

[00:18:14]>> Okay. Thank you sir.

[00:18:16]>> Thank you.

[00:18:18]>> Thank you. We take the next question from the line of Adita Monga from KT Institutional Equities. Please proceed with your question.

[00:18:28]Uh yeah, thank you for the opportunity.

[00:18:30]Um so um the first question that I had was um um on uh Wangg ethnol wanted to get a sense that for the year gone by what would be have been the level of ordering that you would have achieved um uh in this aspect and how does it compare to the last three years average for you? Just trying to get a sense of how much scale down has happened in that part of business year.

[00:18:56]Okay, I will uh give you the answer in terms of the qualitative analysis. So when you talk about 1G, it has multiple components, right? So it has green field projects and it has brown field projects and it has services also that we provide uh to uh the uh customers and uh so the amount of the green field projects certainly went down uh in FI26 because of what I just now mentioned uh of the over capacity. However, we do see uh multiple uh opportunities of smaller size for two things. one which is for enhancing the operational efficiency of the existing plants. Those the ticket size of those jobs can be smaller but uh you know those are something where PR technology and expertise comes into play. Second is our customers are encouraged to go for co-product uh you know production like the distiller corn oil for the cornbased plants and inquiries for those and also the order books for those has also gone up. So while the green field has gone down but some of these other opportunities in the 1G business have been steadily coming in. Of course like I said the ticket size of these jobs is smaller.

[00:20:24]I just request if uh the company can start uh sharing specific numbers because um it makes it easier then for um um uh analysts community to uh appreciate the business and what is changing here. Uh but I I'll leave that to the company. Um the second question that I had was more on the margin front.

[00:20:42]Uh and then uh could you give us a sense of uh how much of uh the quarterly numbers were impacted by uh out of turn price increases that had to be absorbed and uh what is being done um or or at what pace should normality happen uh on on on this front and margins and line up? Uh sorry a you mentioned out of turn what >> in the sense that uh the raw material prices that have gone up uh in recent times the stems specific could have had an impact on the company's profitability u so just trying to get a sense of to the extent that they could pass it on and to the extent that you had to absorb net how much was the impact on margins and how period of time does it get addressed here >> understood if you're asking specifically for the quarter yes on the consolidated basis we have seen 3% raw material price is going up but if you have notice the other expenses have come down by 2%. So it's a composition of both because the activities which get what I can say executed during the quarter gets reflected in the numbers of hours.

[00:21:49]Overall impact is one one and a half% uh additional which we have incurred more than raw material prices Sita we have the cost escalation coming up in the site execution and the reasons what uh Ashish earlier was explaining on the uh delays in the uh uh execution has impacted indirectly in the cost escalation coming up because the sites were open uh we're not getting completely uh closed on the basis of the work which we are supposed to do in a time bound manner and that has actually put a pressure on our uh cost to execute those projects more than the raw material prices I see the change has happened on the other expenses which is mainly related to site related expenses if you look at YTD uh numbers the raw material prices have more or less remained same that doesn't mean that going forward there will not be any impact coming up we are very closely monitoring the current scenario uh the current situation is little dynamic.

[00:22:49]Radar Ashish has indirectly covered that when he mentioned that we actually deferred few order booking which were supposed to happen in this quarter only because of the raw material price uncertainty and the nature of the nature of the contract which we undertake especially on a fixed price basis. So we said that we will hold on to those contracts or rather the employees and we will close only when we have some kind of a visibility on the raw material prices how they are going to shape up in the current quarter. Yes, there is an abrasion which you are noticing. It is not the result of the raw material prices going up. We like to very closely monitor the scenario in the coming quarters especially on the basis of what is happening to the disruption in the supply chain. But on the basis on the year year end basis as I mentioned the material prices have remained more or less same in say in the same range.

[00:23:46]>> Maybe I will round it off with this question. See um uh margins are critical for the business and um it feels as if the RM sit still ahead of us in that context. What are the steps the companies taking to uh to to make the cost structure better off or to make the terms of contract more fair to both parties in >> Yeah. So it is contracting with the uh customer and contracting contracting with the vendor. So both the aspects we are studying together and figuring it out if we are getting an order and let's assume it happens to be fixed price contract then how to lock the prices of our raw material at the same level so that we will not have any impact on that but as I said in the current scenario if the supply chain is completely going to get disrupted then the situation is going to be little different and difficult to monitor but from the contracting point of view we are trying to get to the extent possible the flexibility into our pricing Earlier our all contracts used to be 100% fixed price. We have moved from that 100% fixed price to some kind of a flexibility depending on what kind of a sensitiv sensitivity we will allow to our auto changes. But we are monitoring that contracting part also very very closely if we just share the quantum of orders that have been deferred from last quarter. That will be my final question.

[00:25:07]>> So it is not I will not call it as an order. I will call it as an inquiry basket. So this was almost 300 plus cr inquiries which we we didn't finalize only because of these issues.

[00:25:21]>> Got it. Thank you and all the very best.

[00:25:24]>> Thank you Adita.

[00:25:27]>> Thank you.

[00:25:29]Before we take the next question a reminder to all the participants please limit your question to two per participant. The next question is from the line of Amit Anwani from PL Capital.

[00:25:39]Please proceed with your question.

[00:25:43]Hi sir. Uh good afternoon. Thank you for the opportunity. Uh the first question on the GenX. So earlier you targeting 4 500 possible orders here. Uh so and uh has the deferment happened here also uh that is one and second. Now what is the uh kind of uh situation with respect to the the plant inspections and conversions and uh overall outlook for Gen X and obviously of course you got the data center order. So uh that is also would like to understand what could be the possible opportunity uh for gen from data centers uh uh uh modular cooling system which you talked about.

[00:26:27]Yeah.

[00:26:29]>> Sure. So thanks Amit for the question.

[00:26:32]Uh yes uh we have been uh investing as I said in Gen X and uh one of the investments that uh we are doing is for preparing ourselves for these new segments that we uh want to serve. Uh so uh the data centers the hyperscalers as they are called u they require these very specific uh cooling u uh modular structures uh which are piping uh etc. uh we are already we have already done the work in FY26 now and in FI27 we want to take uh the those efforts into fruition by uh securing the orders and these orders are not one-off we expect that once we have the facility ready for creating these modular structures uh we can continue to repeat those uh in uh you know every few months so that's the way uh we are going ahead uh we believe that that will uh increase our capacity utilization of Gen X facility which is uh fairly sophisticated and large uh the facility and uh we therefore uh can see some positive results uh for Gen X in FY27. Not only just the data centers but we are also working on other sectors like LNG which is growing uh conventional oil and gas which is also uh an attractive segment for us and therefore you know we will combination of these three we will be able to utilize the capacities uh at GenX.

[00:28:08]>> Uh can we see the break break even happening in F27?

[00:28:14]Oh well um yeah we would like to absorb most of the cost and the investments that we have made in Gen X. Um in the next two or three quarters we will have to book the orders uh which we alluded to and once those are there then we will be able to revenue those. So our efforts will be in you know making sure that we will go towards that break even.

[00:28:40]So is this a kind of like delay happening from the customer for these orders in terms of finalization?

[00:28:48]>> Um well uh any of these customers these are international customers they need to certify the facility from multiple angles because this is like I said not a one-off order that they place. They look at uh the companies like PR and then they will certify it for multiple projects that they would like to execute. This process is a long process.

[00:29:12]We started with a segment which was called as ETCA segment. The energy transition and climate action segment which was essentially for green hydrogen, green ammonia, electrolyers etc. But as you know that in the last 2 years that segment has become a little subdued and so we had to pivot to the other segments uh where we can get our uh you know customer interactions going.

[00:29:38]So this is where the data centers, the LMG segment and the uh the oil and gas that I mentioned uh come in. And uh so now uh with all of this pivoting that I talked to you uh we believe that uh it should be a a better path forward for us.

[00:29:58]And uh lastly, what could be the ticket size of data center order? probably uh in terms of per uh uh megawatt how much would be your addressable market which you think with what you got uh uh in terms of uh opportunity outside and the order which you got is it from the client or from any OEM who is working with the client for the data center.

[00:30:24]>> Yeah. So for the sake of confidentiality, we will not be able to talk about the customer per se because we are bound by our obligations.

[00:30:34]However, depending on the size of the data centers, the order values can vary from as low as 50 crores to as high as 150 crores depending on the size. And uh we are as we are negotiating uh I would not be able to give you exact numbers right now since uh this is going on. Uh I have said that we have not booked that order in quarter 4 of last year but we expect um you know some good news in the first quarter of uh this year FI27.

[00:31:09]>> Understood. Lastly, so the number on fixed overhead for Gen X, how much was it in F26 uh employee expense and other fixed overheads at that factory?

[00:31:21]>> So the fixed over rate uh turn rate is still continuing at the uh rate of almost 10 crores per month.

[00:31:31]>> Understood sir.

[00:31:32]>> Thank you sir. Thank you so much.

[00:31:34]>> Thank you.

[00:31:36]>> Thank you ladies and gentlemen. In order to ensure that the management is able to address questions from all the participants, kindly restrict your questions to two at a time. You may join back the queue for follow-up questions.

[00:31:50]The next question is from the line of Sesh Kanani from AMS. Please proceed with your question.

[00:31:56]>> Yeah. Good afternoon everyone and thanks for giving me this opportunity. I hope my voice is audible.

[00:32:02]>> Yes.

[00:32:03]>> Yeah. So, a couple of questions. Uh first of all there are many media reports you know indicating about EB EBP mandate at various percentages. So my question is respect to as per you and your past experience how would things materialize and in what time frame you know if let's say we go 25% mandate how would the time for PR look like and when would this kind of translate into numbers in terms of order booking or revenue and what should be a key monitorable over here.

[00:32:33]Okay. Uh good question Shalesh. So first of all uh it is difficult to predict the timeline for the new mandates to come in. But uh we all as you said we all read these uh articles and newspaper and we know that the West Asia crisis has given an impetus on a different thinking right now. uh as a nation uh we we were uh you know facing difficulties in importing the energy overall energy mix and it includes uh you know crude oil as well as gas. So with all of this we believe that these new mandates will come in and not only for maybe petrol but also hopefully for other transportation fuels as well. So that's the first part. Secondly, uh depending on what comes first and how much is the increase in the blending, there can be different capacities that will have to be uh added for uh the ethanol uh production in India. uh we believe that uh if it is just between you know 2 to 5% then the current capacities may be sufficient but efficiencies will have to be improved and the quality of ethanol will have to be really uh you know something that we'll have to look at which is where pra has a special you know edge and technologies where the purity of alcohol that is used in fuel uh is important uh but if it goes beyond 5% then even more capacity will have to be added and that's what we are watching and uh we are ready uh for uh that type of um blending enhancement so just a clarification on that uh so what we are saying suppose there's a if there is a mandate for E25 tomorrow uh the existing ethanol plants would need some kind of upgradation uh wherein branch can help out with that econom technology. Is it what you're saying?

[00:34:35]>> We have four types of offerings which our customers come to us for. Number one, we can enhance the capacity and the throughput of the existing plants by doing certain technical modifications or of course we can put an entirely new line for the additional production. So depending on each customer their ability to fund and their uh you know overall direction uh we can help them in both in enhancements as well as the new capacity buildup.

[00:35:06]>> So in terms of technical parameters there are no uh no upgradation further as such is required in the ethanol right for the higher blending percentages.

[00:35:15]No, no. I think uh as long as they stick to the blending specifications uh as uh you know stated by the government and the BIS and uh you know produce that type of ethanol that should be good enough. What I meant was that at PRA the technology that we have we are able to absolutely meet and exceed those specifications in the plants that we construct.

[00:35:41]And other part of it the uh the way you said that if if the percentage blanking is only increased by two to 5% maybe would not have new orders but this thing slowing orders might have some financial closure pendings right so that can kind of at least a one-time effect uh would have uh right >> that is correct um of course uh some of our customers they have slowed down their execution mainly because of some of those challenges that you mentioned.

[00:36:10]Fair enough. Uh uh I'll just squeeze in one more question. Uh in terms of uh order inflows, right? This is the print what we have got this quarter is I think four year lower in terms of order booking. Right now uh in the earlier remark you had mentioned that we have deferred few of the order inquiry pipeline because of the RN thing. But how should we think about it going ahead? Uh what's would we return back to say a band of 800 to 900 crores on a steady state basis going ahead?

[00:36:39]Well, I think looking at the pipeline right now, we believe so. Um, we should be in that range typically, but as we don't want to give any forward-looking statements, uh, you know, that is a that is a right ballpark that one can assume.

[00:36:54]>> Okay. Thanks a lot. That's helpful. Just one data keeping question in terms of number of clients whom I have audited and approved facility as on date and what was that number say at the end of third quarter if you can give some color on that. So the at the end of third quarter uh chesh it was around 9 and now we have moved almost to 12 to 13 uh clients who had cleared the facility for us.

[00:37:21]>> Fair enough. Thanks a lot and best of luck sir.

[00:37:24]>> Thank you.

[00:37:26]>> Thank you. The next question is from the line of Atul Tavari from JPM. Please proceed with your question.

[00:37:33]>> Yeah sir. So I mean just follow up on the same question. Uh so you know as per your own understanding and estimate now that government has specified technical standards you know uh what could be the likely timelines for actually ruling out the mandate to take the blending in petrol from 20% to 25 or 30%.

[00:37:54]Is it 6 months one year or it could be a longer of a year even a few years from now?

[00:38:00]>> We we believe that it will be not longer than one year but really to predict it in terms of exact months is difficult for us. We know lots of discussions are happening there is a uh right impetus uh because of uh external geopolitical conditions. So uh we are hopeful that it will get done sooner than later >> and you must be aware that government has just uh also invited the public opinion on E85 and E00 and this uh stuff was proposed a month back. So government has already started taking right steps in the direction of going to the extent of E00 and they have opened this window for a month for the public opinion. I believe that window will get over by end of uh mid of June or something. So if that happens you can fairly assume that how the government is trying to go ahead on the basis of uh the uh first step which they have taken for basically inviting the public opinion and second one asking the OMC's to open up E85 E00 outlets uh actually starting from the next month itself. So that also is an indication. Frankly speaking, we can just pick up these indications instead of actually predicting when the notification is going to be out. But it gives a fair fair confidence to us that it is in the offing and it should happen anytime.

[00:39:25]>> Okay. And this E85 E00 outlet. So I mean uh could you throw some more color on this? So I mean the if these outlets sell you know a petrol uh with such a high level of blending of ethanol do we have enough base of vehicles to make this at least somewhat commercially vi viable uh in the short run for the people who are opening those outlets.

[00:39:50]>> Yeah this is a simultaneous set of actions.

[00:39:54]So uh that's why when I mentioned in my opening remarks that this is an ecosystem which is getting developed as we speak. So there is of course government, there is OMC's who will put up these infrastructure for dispensing E85 and E00 fuel but there is also the automobile makers which make these different engines which are able to consume this type of a fuel and we also then have uh players like Prague and the producers who will then cater to the demand that will come up. uh as far as we know we are aware of a few companies already announcing their uh flex wheel vehicles starting June and uh we've seen some of those uh things also and there are also retrofit kits on existing vehicles that can be uh adopted to an old vehicle and can it can then become compatible for uh E85 or E00. So there are various things that are happening in this particular space and different stakeholders are coming together as an ecosystem uh to make uh this entire flex fuel uh you know viable for India.

[00:41:07]>> Okay. Okay. And so my last question I mean to roll out the mandate beyond EVP 20 say to 25 or 30 does the government need to do some more technical studies to assess the impact of that level of blending on engine performance and wear and tear or are those studies already done and everything is clear from technical standpoint.

[00:41:31]>> Yeah, this is a good question. lot of studies and scientific studies have been done and all the responsible and credible agencies have very clearly come out with those reports. I think in the media there could be some sometime who can you know um come up with uh not very scientific and uh not you know um connected to the facts type of uh messages um either through social media or other means and I think we have to be careful about it because you've seen uh other countries like Brazil being very successful um as far as ethanol uh is concerned And uh we need to learn from these countries like Brazil and Thailand uh who have been you know using this very effectively in managing their energy mix.

[00:42:24]>> And so these technical studies have given a green light to say what level of blending like even EBP30 has been cleared or only EBP25 as per these technical studies. No, there are there are different categories of uh vehicles and uh you know it is very clearly defined in the in the report as to which vehicles will be aminable for what type of blending. When we are talking about the new vehicles the ones uh you know that have been manufactured in the recent uh times um you know those will be able to take the E30. Uh also like I mentioned in my opening remarks, the Bureau of Indian Standards has now completely notified the fuel specifications uh for all categories E25, E22, E27, E30 uh petrol and then for E85 and E00 it's a different type of an engine that will have to be used in the vehicle. So the these are technical details Apoll um you know we will be able to share those because we also follow those reports uh and those are done by credible agencies uh like ARI etc in the country. Okay, good to know.

[00:43:38]Thanks. Thanks. Yeah, >> thank you.

[00:43:42]>> Thank you. A reminder to all the participants to limit their question to two at a time. The next question is from the line of Separal from ask sundepsurval.com.

[00:43:52]Please proceed with your question.

[00:43:55]>> Yeah, I've been tracking for many years.

[00:43:58]So we've had phases of high growth like in the 1G era where also the company could not report very high profits because there were phases of raw material size hike. Many of the contracts were uh uh fixed size. Then the company talked of huge opportunities in 2G canol in CBG in SAS.

[00:44:25]Now when we see CBG and SAX, we already see a lot of investment happening in India and uh PRA seems to have a very minimal share in that. So how are we supposed to track this company like because you keep on making so many announcements to the stock exchanges on your technical excellence but when it comes to orders execution margins like there were talks of margins of high teams and where the margins are right now. So how are investors supposed to invest in your company when when you are not delivering on things which you're also talking of and secondly uh Mr. Gquad was appointed as MD just last June and now there's a joint MD also appointed. So what was the requirement for that?

[00:45:21]Okay. So maybe I'll first take your question on 2G, CBG and SAF which is uh important for us to address and Sep G thanks for tracking PR. We really appreciate your uh you know uh interest uh for a long period of time and um time to time when you ask these questions to us it also gives us insights and what needs to be done u in a better manner for us. So for 2G I can assure you that there are three projects in the country and all three are being done by PR alone. This technology is available only in PRA right and like any new technology it has a gestation period and there are challenges that uh we faced when we launched it but we are now quite confident that uh we will be able to uh you know uh use the 2G produced ethanol especially for the SAF you talked about SAF as well u there aren't too many investments in the country uh to be honest with you Sep which have come up and we are you know tracking all such investments for SAF.

[00:46:29]There are international opportunities which are there and we are very much plugged into it. For example, we are right now concluding a engineering um you know assignment for an international customer and we expect that this will convert into another order for what is called as detailed engineering for construction of a plant. um in the time to come. Right? So um the although SAF has been talked about for a while but the investments have been u a little bit subdued in the past few years mainly because the strong mandates for using SF in the um aviation turbine fuel uh have been delayed. So we are ready at praj and as soon as those things come up uh you know you will see uh praj also uh being one of the participants in that market on CBG as well if you see pra is quite active in that market we've we've got you know technology for different feed stocks uh that can be used for production of uh CBG and um we will continue to therefore participate in that marketplace. So that is the first question that you asked. Second question you asked was about the margins. So let me uh you know give you uh overview of those margins that you talked about and why they are subdued especially for FY26. I can you know share with you that our investments in PRA GenX continued and therefore you know any investment which has a high long gestation period uh we had to be a little patient about it. So we continued to invest in that.

[00:48:08]Second thing was we did experience some escalation of cost in our execution and that of course impacted our uh profitability uh because our revenues remained flat but the cost uh you know of execution uh went up and I think Sachin explained that uh to another question that was asked to us and the third thing was we did experience some one-timers which uh were non-b businessiness related in FI26 and they impacted our bottom line. So going forward uh we would like to you know learn from these and therefore uh you know work on the profitability uh for a better result in a 527 on the MD and joint MD I think u it's it's essentially because our work has expanded and there are multiple areas in which uh the company is working on so it is more like we both you know taking on all those uh you know work fronts where a management um you know uh oversight and a management inter intervention is required so that we make the company ready for a next five-year plan and that's the basic intent of you know elevating uh suchin to the joint managing director position and therefore you know manage the uh the bandwidth that we both have knew of a much larger company Honeywell and that company is also doing very well as you all of all of us know and so my limited point at the end is that engineering companies in general today in India are doing extraordinarily well like a majority of them and triage has been around for a long time and they have invested in technology people have invested in technologies a lot and I think the ultimately the management needs to work for the shareholders and >> right it is very difficult to understand sorry sep your voice is cracking and little difficult to get you what you want to say >> uh Mr. Sandep are you on your headset sir? May I request you to please switch to a handset because the audio is very low so we can't hear you clearly.

[00:50:29]>> Can you hear me now?

[00:50:31]>> Yeah.

[00:50:31]>> I can hear you now.

[00:50:33]>> Yeah. So what I'm saying is that uh PRA engineering companies in general in India are doing very well at this stage and uh pra has invested in a lot of technologies and right now it seems that the company is working more for the employees because of the kind of investment you've done in the Gen X plant and the results for the shareholders are not coming. Just hoping that >> um hear you again. Um Sep G.

[00:51:04]>> I don't know if uh your line got dropped off.

[00:51:09]>> Hello Sep.

[00:51:11]>> Can you hear us?

[00:51:12]>> Yes, I can hear you. I think there's a problem with uh SEP's line. Audio is going >> Hello.

[00:51:18]>> Hello.

[00:51:21]>> Uh his line is disconnected. Sorry.

[00:51:23]>> We'll take the next question from the line of Vardaman Luna from Trifila Capital. Please proceed with your question.

[00:51:30]>> Hi Ash, good afternoon. Uh I just have one question. Um in terms of capabilities, what exactly is the synergy between our bioengineering business and what we're doing for uh data centers?

[00:51:42]>> Hello. Hello. Hi. Am I audible?

[00:51:48]Hello.

[00:51:49]>> One second. Uh uh sir, can you hear me?

[00:51:52]Asha, can you hear me? Uh, one second.

[00:51:54]We've lost the line for the management.

[00:51:57]Please remain connected participants while we rejoin them.

[00:52:43]Uh ladies and gentlemen, we have the line for the management. reconnected.

[00:52:48]Uh Vadamso please proceed with your question. We have the line for the management connected.

[00:52:52]>> Yeah. Uh hi Ash, good afternoon. Uh I just have one question.

[00:52:57]>> So in terms of capabilities, what exactly is the synergy between our bioengineering capabilities and what we are doing for data centers?

[00:53:05]>> Oh okay. So um this is a good question and it gives us an opportunity to position this correctly. uh as you know data centers um which are coming up especially because of the uh growth in artificial intelligence demand in various sectors. Uh these are the energy guzzling um infrastructures. they take a lot of energy uh for the compute power that needs to be uh provided to the customers and it generates a lot of heat and that heat needs to be managed properly so that the data centers can perform their tasks. Where Praj in the short term is working on is to provide the infrastructure that goes into the cooling systems for the data centers.

[00:53:58]Right? And this is a specially designed with special material of construction type of uh skids or the modules that go into uh the server rooms of the data centers for cooling the server cabinets.

[00:54:12]So that's what we are focusing on in the short term. In the long term, our vision is that we can expand into other areas of the data center and provide technologies. For example, because the energy requirement for data centers is large, uh it may be advisable that we use renewable energy for such data centers for medium-siz or large-sized data centers. And that is where we believe that the bio energy can be one of the options for the data center uh operators to be used because it's a renewable energy. So that's where uh we are also looking at opportunities in the future.

[00:54:57]>> Understood. Understood. That's very clear. Um and great things happening across the board and I'm sure uh we'll do very well over the medium to long run. Thank you.

[00:55:06]>> Thank you very much.

[00:55:08]Thank you. The next question is from the line of Arun Zer, an individual investor. Please proceed with your question.

[00:55:16]>> Hi sir, can you hear me?

[00:55:18]>> Yes. Yes. Go ahead Mr. Aron.

[00:55:20]>> Yeah. Uh what is the R&D spend which is done in last year sir? FI26 >> in FI26 total spend is almost uh 65 66 crores. out of that around 20 crores will be on capex and around 45 46 crores will be on the opex I'm asking R&D sir research and >> I'm talking about R&D expenses split into two parts where we have spent on the building of our lab additional equipment which we have taken worth of around 20 crores and on the uh opex side where the uh demo plant is running the uh people who are working in the R&D are there we have a almost 100 scientists working there. Uh we keep on testing different feed stocks. So I'm talking about that expense is almost around uh 45 46 crores.

[00:56:14]>> Okay. This 45 46 cr is already sitting in our other expenses right sir.

[00:56:19]>> Yes that's right.

[00:56:21]>> Okay sir. Uh so uh when we come to the Q4 margin so uh do do you uh do you think that uh worst is over in terms of margins or still uh wor is left behind in >> No. So uh to be very frank with you what reason which we were talking about for the drop in the margin in the last quarter and overall in the entire year of FI26 mainly the execution challenges which we face we believe that those challenges are actually getting completely over for a reason because the execution cycle for the projects which we are right now executing the cycle time cycle times are little less they are not very big cycle times projects because from the green field we are moving to brownfield.

[00:57:06]and the sizes of the projects are also very different. So we believe that the execution challenges are definitely taken care of and the focus for FI27 from our side is also going to be more on the operational excellence and we are completely geared up for that. So I think uh to a great extent the uh worst is over.

[00:57:28]>> Okay sir. Uh another point like other investor also mentioned we are uh like lagging in terms of performance in revenue stoplines margin since last three years. So would it be uh fair to tell that management can do a buyback to just uh give some value to the shareholders and then rather than giving a dividend and then give some bonus or a split to the existing uh share value.

[00:57:57]Uh this is a board uh matter uh uh Arun, but we will definitely take this feedback to our board.

[00:58:07]>> Okay sir, thank you so much.

[00:58:09]>> Thank you very much Arun.

[00:58:11]>> Thank you. As there are no further questions from the participants, I now hand the conference over to the management from Praj Industries Limited for closing comments.

[00:58:21]>> Yeah. So thank you everyone for your time today. Uh in case you have any more questions feel free to write us at inquatpraj.net and we look forward to you uh meet you again on you know next analyst call. So thanks a lot have a nice day.

[00:58:40]>> Thank you sir on behalf of Industries Limited that concludes this conference.

[00:58:45]Thank you for joining us and you may now disconnect your lines. Thank you.