TruAlt Bioenergy Limited (TRUALT) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to True All Bioenergy Ltd's Q1F27 Investor Earnings Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star than zero on your touch-tone phone. Please note that this conference has been recorded. Today, on the call with us, we have Mr. Vijay Kumar Murugesh Nirani, Managing Director, and Mr. Anand Kishore, Chief Financial Officer. I now hand the conference over to Mr. Vijay Kumar Murugesh Nirani, Managing Director. Thank you, and over to you, sir.

A very warm welcome to all the shareholders for the first earnings call for the financial year 2026-2027. I must report that we have had a fairly good quarter thanks to the company's decision to convert three out of five units into dual feed plants and for completing the capex in a timely manner as of quarter three last financial year. During this quarter, we were successful in operating 3 out of our 5 plants to the maximum of its capacity and were able to produce close to 8.5 crore litres of ethanol and achieve sales of close to 8.5 crore litres that gave us a revenue of close to 630 odd crores. Thanks to the prize of the maize and rice during the beginning of the season and with the support of the working capital build-up, We could successfully secure enough raw material that could give us an increase in the bottom line. We also had ample stock of ethanol during the March quarter, which is now being sold thanks to the orders that we had in hand.

With the current capacity,

we were able to only operate at about 60% of capacity utilization. It is fairly better than the last two years, but we still have a lot more of opportunity to increase the capacity utilization by another 20% to 25% at least. And the company strives to reach that capacity utilization in the coming quarters. To increase the capacity, as we are all aware, there is a court case that gives us an additional of 15 crore litres of ethanol. That matter still stands open, and we're trying to get that implemented. With that, our capacity utilization could go as high as 90-95% for the balance of the two quarters. That said, Q2 of this financial year should also see a healthy number. Because we have close to about 11 to 12 crores litres of sales planned, and that should give us a fairly good growth in performance in the quarter to come also. With regards to the compressed biogas business vertical, we've had a similar achievement in terms of operations as well as financials, where we could clock a revenue of close to 11 crores and a pat of about 4.5 crores, giving us almost about 40-45% of pat margin. The same is expected to continue in the quarters to come. Taking this learning, we had begun construction in three out of our four planned locations under a JV with Sumitomo, under a subsidiary company called Truault Sumitomo Gas Private Limited. Happy to report that three out of the four plants are near commissioning and would be put to use hopefully by the quarter three of this financial year. And quarter four, we should start seeing some revenues from these three out of the four plants. In our second JV company, that is with Gale, we have had six locations that are identified. We are in advanced action to procure the land and to begin construction, hopefully, in the month of August onwards. That should give us... Another six plants, giving us a total of about 72 tons per day of additional capacity from, hopefully, Q4 of this year, and revenues will be seen from one of the next financials onwards. In terms of the sustainable aviation fuel business, we are in advanced stages of the fast feed, that is, the front-end engineering works. We will now be calling for EPC quotations, post which we will give out orders to the EPC contractors, and post procurement of the land from Andhra Pradesh government, begin construction works on ground. Also, we are very happy to report that we could successfully achieve about 150 crores worth of viability gap funding from the government of India under the PMG1 Yojana. This will give us... Ample support in terms of the economic viability and encumbered risks to a certain extent. With regards to our fuel retail business, we are seeing a lot of growth in or rather we are seeing a lot of opportunity in the flex fuel vehicle adoption. We're in a lot of two-wheeler companies, be it Honda, TBS, or other companies, including Yamaha, have all launched their flex-fuel two-wheeler bikes. And the car companies like Maruti, Toyota, have also launched commercially their flex-fuel vehicles. Government of India was also proactive in declaring a price for E85 and higher blends. Like E22, E25, and E27. This gives us great confidence for increasing our capacity utilization in the days to come, and for adoption of scientifically proven ethanol-blended fuels for the consumer in the days to come. So our fuel retail network, we have already established seven outlets and another four to be commissioned, hopefully, by the end of this quarter. And because of the Middle Eastern crisis and the variance in the crude prices, we still see a lot of dynamics in the fuel prices. The delta is very... Though we have identified about 76 additional locations, we have not begun construction or we have not begun the franchisee works in the additional 75 fuel retail outlets owing to the Middle Eastern crisis. As soon as there is some benefit or rather some stalemate or rather the war seems to recite, then we will take up in a fast manner the construction of these 75-76 additional outlets. With that, I say that True Earth is now a completely developed company with its ethanol vertical fully in place to yield maximum output, hopefully to give at least about 5 to 5.5 crore liters of ethanol production capacity on a monthly basis. With the gain in the working capital limits, thanks to the IPO that we did and the working capital limits that we could secure from the procedure of the IPO, company is... We are fairly in a good position to have or build up enough raw material at a decent price to yield fairly good margins in the days to come. With that, I ask our CFO, Mr. Anand Kishore, to take you through the financial performance.

Good morning, all, and thank you for joining us for the To All Bioenergy Limited and this presentation for the first quarter of financial year 2627. On behalf of the management, I sincerely appreciate your continued interest and confidence in the company. During the quarter, we witnessed a significant improvement in revenue, profitability, and overall financial performance, supported by a higher production volume, improved plant utilization, and continued contribution from our diversified bioenergy portfolios. With that, I will take you through the financial highlights of the quarter, followed by an overview of operational performance and key strategic initiatives. During the Q1 FY27, we booked the top line of 626.90 crore in the small segment with a growth against the previous quarter with 106.3%. The EBITDA stood at 147.3 crore with a growth of 129% as against the previous quarter. The profit before tax stood up at 78.4 crore with a growth rate of 1, 2, 5, 3% on yearly basis. And the pad ended up with 59.3 crore as against the 4.7 crore of previous quarter by showing a jump of more than 1,000%. On basis of a margin analysis, the EBITDA margin is stood at 23.5%. The PBT margin is stood at 12.5%. The PAD margin was at 9.5%. We were able to reduce the finance cost to revenue at 7% as against 12.4% of the previous quarter. The employee cost to revenue was reduced to 1.9% as against 3.7% of the previous quarter. On the cost structure front, the raw material contributed to 53.2% of the revenue, the inventory consists of 7.6%, the employee consists of 1.9%, the finance cost consists of 7% of the revenue, the depreciation consists of 4%, and the other expenses consists of 14.4%. On the segmental front, the ethanol contributed to 615.7 crore in the revenue, and CBD consists of 611.2 crore. The segmental PBT consists of, its roll has come from 73.3 crore and CBT is 5.1 crore with a total of 79 crore in terms of profit before tax in approximation. On the balance sheet highlights, the segmental asset is 3,754 crore and segmental liabilities is 2,074 crore. Balance is in the form of equities with asset coverage ratio of 1.81 times. The key ratios of the company were basically EBITDA margin of 23.5%, FAT margin of 9.5%, Asset turnover of 0.67 times, Return on Asset on Analyze basis is 6.3%, Finance cost coverage is 2.78 exchange. The debt equity ratio on the solvency level was at fairly web within control of 0.59. The DSCR is 2 at 1.36. The TL by TNW was 1.28. The liquidity front current ratio comes to 1.82. Return on capital employed is 20.35%. Operating profit margin is at 14.42%. Net profit margin at 9.45%. Return on equity at 14.42%. The major revenue drivers were due to the fact that there has been higher small productions, there is improved plant utilization, there is a dual feed operation as our MD told, the better operating efficiencies, and the growing contributions from CVG during the quarter to quarter. The better margin drivers were on the account of better operating leverage of the company, there was improved product mix with a grain base added on, the strong capacity utilization of the company, the higher absorption of the fixed cost because of the increase in the top lines. With this, we can say that we have delivered a strong first quarter with revenue crossing $625,000 and a profit after tax increasing more than 12-fold a year on year basis. A beta margin improved to 23.5% reflecting enhanced operating efficiency and improved capacity utilization. The successful transition of our facilities to multi-field operation positioned as well-capitalized and diversified stock opportunities, while enhancing risk, balance, and profitability. We remain committed to discipline capital allocation, sustained cash flows, and creating a long-term value for our shareholders. Thank you.

Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchdown telephone. If you wish to remove yourself from the question queue, you may press star and 2. 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 is from the line of Shubhi Gupta from Treenetra Asset Managers. Please go ahead.

Anusha, good morning. So my question is that since we are shifting to dual feed model, how is that impacting our, you know, cogs and costing and margins? And what is the target mix for the feed?

Yeah, so if you will see the dual composition, the margin as it is basically on the grain-based front. We just point to the two reasons. First is, when we were only with the sugar-based content of raw material, there has been a profit margin 6.7% cheaper compared to what we have earned in the compared to the mesh-based. Unless there is an additional revenue of a DDGS comes from this, which is a by-product, and that doesn't require any cost incurred to be specifically. So this gives us a better edge in terms of only when we are cutting the sugar base and contributed here when we have generated additional close to 60% of the segment, 50% of the segment has come also from the grain base, where we have been able to save the cost net profit margin to the extent of 6.7% efficiency is better than compared to the sugar base. Secondly, the yield also is here high. If you will see the yield in case of a sugar-based content, it is generally 317, whereas the yield on the grain-based will work out around 450.

Okay, sir. So my second question is that CBG revenue grew, but the EBITDA margins have dipped. So what is driving this?

So, there is nothing driving this. If you see Q1 of FY25, it is almost in the same line. A little based cost had based on the employee expenses because we are expanding the CBG plant with a JV with a gain, effective energy, where the additional employees are being had at the plant level and the corporate level also. This has caused a minor increase in the employee expenses. That has somewhat impacted the profitability margin, not much.

There is a one-time cost of repairs and maintenance that has taken at it.

But it is almost in the same range.

Okay, sir. Thank you.

Thank you. The next question is from the line of Shilpa from Lotus Wealth. Please go ahead.

Hello. Am I audible?

Yes, ma'am.

Yeah. So, congratulations on a good set of numbers. So, my first question is that our gross block asset turnover on current quarterly run rate is approximately 1. So, what do you anticipate it will be going forward? I'll ask my follow-up later.

Yeah. So, in a generic situation, we can manufacture close to 55 crore liters, Shilpa. So, with 55 crore liters at today's average price of 67 rupees, it should give us about 4,000 crores. So, asset turn should be somewhere around 1.8 to 2 times, but we have just achieved 1 times now because our capacity utilization is only at 60%.

Okay, sir. And what are your KPEX plans for your 2028 and what would be the estimated gross block at that time?

So in the ethanol space, we don't have any further KPEX plan. It's a fully commissioned and now just to be utilized. In the CBG space, we are already undergoing a KPEX of about 700 crores under two JV companies. That is with Sumitomo to do 4 CBG plans of 20 TPD at a cost of 330 crores, and with Gale to do 6 CBG plans of 10 TPDs each at a cost of 425. So these CAPEX have already begun, and they are underway, so by Q4 of this year, we will start seeing revenues from that.

Okay, sir, and anything planned for next year, 2027 and 2028?

That is, for the aviation fuel, there is another CAPEX of about 2,000 plus planned, and it's already, we've declared that also, but the CAPEX will begin as early as, let's say, in the next two or three months. We're waiting for the EPC contracts to be awarded right now. Hopefully, by end of 2028, that's in FY29, we'll see revenues from the SAF business also. That's a CAPEX of about 2,000 plus.

Okay, sir. Can you give any turnover there for the SAF?

Not immediately. The planned turnover there would be an asset turnoff one times for SAF.

Okay, sir. So, from 2029, you'll get revenues from SAF also, right? And just one last thing. The CBG CAPEX of 770 you talked about, that is completely, are that including Gale and Sumitomo investment also?

That's the gross cost, man. So, 51% is held by us in both the JVs and 49% with the partner. And these are all funded on a 70-30 debt-to-equity ratio.

Okay, sir. Thank you.

Thank you. Thank you. The next question is from the line of Sanjay Manial from Dam Capital. Please go ahead.

Hi, sir. I have a few questions on if you can give a breakup of what is the ethanol volume we did this quarter, and how much is from B-heavy, and how much is from juice, and maize, and brook rice.

So, total sugar-based content was 4.37 crore litre volume-wise, and value-wise, it comes around to 77 crore. The grain-based volume was used at 3.92 crore-litre, and in terms of value, it's 314 crore-litre. If you have asked for a B and C, the B molasses measure consists of 3.35 crore-litre, and balance a minor amount is C molasses, that is 0.06, and its setup is 0.32 crore-litre.

Sanjeeji, this quota also was almost a 50-50 blend with grain and with sugar. So going forward in the next quota, we hope that there will be more of grains.

Right. Also, if you can give, you know, what I believe in 3.9 would be largely maize because maize prices have been benign. What is your outlook on the maize prices? I mean, what is maize prices currently and what kind of EBITDA per liter you are making in all different wheat stocks, specifically maize-based ethanol?

So, during October to January, or let's say mid of February also, we saw the May's prices hover between 18 rupees, say at 17 rupees also, to between 21-22 rupees. So, we booked a lot of quantities during that period itself, and at that price bracket, we are making almost about 15 to 16 rupees. But realistically, the price of May's is always hovered around 22 to 24 rupees, and as on date, it is at around 25-50. So at $25.50, the margins come down drastically. It comes down to almost 6 to 7 rupees a liter. That's the margin contribution we get. But since we are holding ample stock since the early days, that is giving us the driver for rather the margin growth that we are seeing.

Right. And, I mean, so, we have done approximately, you can say, almost 8 crore litres during the quarter. Ideally, for the full year, should we take, I mean, the front rate, I believe, will go up in second half. So, should we take, like, 40-odd crore kind of a number, means 40-odd crore litres ethanol, which volumes will do this year?

Sir, our expectation would be to do a little higher than that, but if you go by the orders in hand, we have 44 crore litres of orders in hand.

Okay, and that includes the OMC plus private, everything put together, ENA.

That is correct. That is correct.

Perfect. Thank you. Thank you very much, sir.

Thank you so much, Sanjay.

Thank you. The next question is from the line of Tanmay Javeri from Pinterest Capital. Please go ahead.

Hi, sir. Congratulations on your set of numbers. It's exciting to see the business leaning momentum again after our transformation. So my first question was, if you can just give me a bifurcation of the quarterly revenue among Ekenol, ENA, EEGS, and what would be our average realization rate for ENA and Ekenol for this quarter?

So the out-of-product turnover of 630 crores, you can say from B molasses, sale has come to 221 crores, 032 crores, C molasses 3.9 crores, maize base is 97.06 crores, rice base is 169.06 crores, ENA, ENA, ENA is 37.02 crores, and BDGS is 47.34 crores. These are the major drivers.

Okay. Okay, so DDGS will increase in Q2 once we have more of the data, this is the presumption, right?

Yes, yes.

It's only earlier we had guided that the 15 caroters of spillover should be completed around September. And right now we have mentioned 44 caroters of guidance, that is for FY27. So does that include 15 caroters? And if you can provide any timeline for those 15 caroters spillover?

So, the 44 doesn't include the 15-trose pillow versus, and this 15-trose, we've been fighting tooth and nail with the OMC, and we're hopeful that it should come through any time now. So, I am not able to give a timeline as of now, but we're making all efforts to get that information.

Okay. So, one last question on the SAS initiative. In the previous talk, we had mentioned that we were in discussion with few airlines, as well as an aircraft manufacturer for potential collaboration and equity. So, can you share any progress on those discussions?

So, the aircraft manufacturers, so we are still in the... The working groups right now, and we are confident that there are about six companies that we are individually discussing with. This includes an aircraft manufacturer, two airline carriers, and three oil and gas companies, which are very large. There are international oil and gas players and one domestic oil and gas company. In total, we are in discussion with, and also the seventh company is Sumitomo, where we already have an MOU, where they want to explore to be a partner in the aviation field. So in total, we have seven companies where we are exploring the best partner for us to set up this SAF plant.

Right, it ends post-September-October when the new bidding starts for the next week and also I said, what kind of targets are we looking for? Internally we must have planned something.

As on date, sir, it's hard to give out that number yet. So, we are taking the base case, whatever we got last year, to be a base case. Though there was an unfair means of allocation, but even at that conservative side also, we are hopeful that we should be able to do at least 44 crores in the year to come. But let's say anything above that is what should be our expectation.

Thank you, sir. I enjoyed that video. Thank you. The next question is from the line of Vineet Thakur from Plus91AMC. Please go ahead.

Hi, sir.

Thank you for the opportunity. Sir, could you shed some light on what was our margin retail segment and why there has been drop as well from last Q4 to Q1 in that margin?

Sorry, Vineet, we are unable to hear you well. Can you repeat the question?

I was asking, sir, our patent margin has fallen drastically from last quarter to this quarter. What would be the reason, sir, in detail?

The patent margin has fallen? In detail, you know, patent margin from March quarter to now.

Yes.

So, from March quarter to now, there's been an increase in the holding cost, that is, the interest cost has gone up, if you see. And our other costs have also gone up. So other costs include the distribution, the sales and distribution where the cost of transportation was affected a little. And also our cost of employees has gone up. We have now hired close to an additional of about 180 people for the new three CBG plans. So that also has contributed to a decrease in the cost margin. And also the raw material holding cost, so the finance cost has also gone up. So on three accounts, that is, the transportation cost has gone up, the finance cost has gone up, and the cost of human resources has gone up.

And so what is the utilization currently for CBG plans?

We are at about 78% capacity use there.

Okay, sir. And, sir, could you give me the margins we did? There is a falling margin of CPG. I heard that there was a one-time cost, but what would be a sustainable margin going forward?

So, CBG, what we have been seeing so far is a bit of greater than 60% and a fat margin of close to 40% to 50%. If you ask me, it seems to be the long-term case, but if there is any policy change tomorrow, it could go on a higher side also or it could go on a lower side also, but that's only subject to any change in policy. But as on date, we don't see any change in the margin profile for CBG.

And, okay, sir. I'm sorry, I read up on the presentation that the blending program of CBG with CNG, what kind of delta are we looking at for our firm for that, if that percentage is increased?

There is a lot of disruption. Sorry, we were not able to hear about it.

I was saying, sir, that I ran into CBG and CNG blending program. I started in 1% of CBG is being blended into CNG. I was wondering what will be a delta for our company if the percentage is increased and what kind of revenue potential are you looking at?

No, the target for Government of India is to use 5% of CBG blend with CNG. But just to keep you informed, that is just a promotional target. Be it use of CBG or CNG, the chemical compound is the same, right? It's unlike ethanol and petrol. CBG itself is a standalone fuel. So, Government of India wants more of indigenous CBG production and consumption to happen. So, if the consumption keeps increasing, it's a good thing for the government. We cut down on our imports. So, if you ask us for our capacity, the blending targets shouldn't hold any impact for us. So, offtakes are anyways ensured by our JV partner, that is Gale. So, we shouldn't have any concerns with the blending profile or anything.

Okay, sir. And, sir, once the plants are live, we'll be doing at least around 40% of utilization of the galen, the galen to meet up our plants, right? Once they're live, at least in the year one.

We can genuinely not hear you at all. So, there's a lot of disturbance with the connection.

I was saying that, sir, in CBG, the first year utilization will be around 40% for galen to meet up our plants in the year one, right?

That is the next financial year, you mean?

Yes, sir.

So, no, it could be a little higher. So, we have estimated it to be about 60% at least for the year one of capacity use. And that's a conservative approach we are holding.

Okay, sir. I'll rejoin the queue, sir. I'll get into a better network and I'll rejoin the queue. Thank you.

Thank you. The next question is from the line of Satyam Chaudhary, an individual investor. Please go ahead.

Hello. Good morning, sir. Yes, sir.

Yeah, sir, my question is, like,

for CBG, I was going through some articles, there was a bottleneck around procuring raw materials for that. So, like, we are expanding into CBG to act in multi-folds. So, what kind of raw materials do we see for that?

Your question is, what kind of raw material we plan to use for the next CBG plan that we are doing. Is that right? Right.

Availability of that.

Okay. Availability of that. So, for the, every location we have identified is in a cluster of sugar complexes or ethanol complexes. So, wherever we have identified locations to set up is only where we have at least three times the raw material required within a distance of 30 kilometers radius. So, availability of either press mud or spent washed, which give us good yield of both fertilizers as well as CNG or CBG, those are our raw materials, and at least 3x of the required raw material is what we are estimating to have.

Okay, sir. And other question is around life.

These are discussions that are actively happening, especially the discussion I know is Japan and India have a mechanism to reduce their carbon footprint. It's called JCM, Joint Credit Mechanism. Where countries like Japan, countries like Singapore, most of them are having targets to use ethanol with their petrol blend. So there is demand for India to supply these ethanols, and there is demand for export to be opened also, because currently we seem to have slightly larger volumes available.

Okay, sir. Okay. And another thing, one more question, I was having, like, some

of our partners have entered into long-term contracts with OMC. So, can't we also do something of that kind of short contracts for multi-year, like, supply internal contracts?

So, you mean with the public sector OMCs or the private sector OMCs? Public sector OMCs, sir. No, so we are already under a long-term off-tech engagement with the public sector OMC. In spite of that, Satyamji, there is a tendering mechanism that happens, and under that tendering mechanism only, we get allocation of quantities for that year to supply.

Okay, thank you, thank you.

Thank you. Next question is from the line of Suyash Kena from Singularity AMC. Please go ahead.

Thank you for taking my question. Can we talk about what kind of government assistance are needed in the CBG business? As you said, maybe the raw material, we have self-sufficiency because where we are located and our legacy history in the sugar sector and understanding of that. But maybe what other assistance is needed to get the full revenue realization as we're getting today in the first time that we are active? And how can it scale to the other, you know, 10 to 20 plans that we might bring up with these partnerships that we have logged in?

Of course. Thanks for connecting, Suyash Bhai. And with regards to CBG, many of the companies in the country are still in the learning curve. And we've had multiple stakeholder meetings with the government, with OMCs, as well as with many industry potential participants. And each of us have had multiple demands from the government. One very important one for the success of this sector, for all in general, is an assured offtake from the OMCs or from the government side. Right now, because all these plants are located in rural areas, offtake has become a challenge. And luckily for us, what gives us the moat that we carry is the tie-up with the partners. We're ensuring more than 80-90% of sales on a daily basis. So, if most of the people can solve the problem of sales, I think the sector is going to be a big success. In terms of raw material, each of these different feedstocks have different unit economics, be it from press mud, it's different, from spent wash, it's different. From Paddy Straw or Biomass is different, and from Napier is different. There is only one single yardstick that government used under the Sathad program, but we hear rumors that there is a new program called Sampoorn coming. I'm sure you're aware of it also. And in that Sampoorn program, there are multiple corrections or changes that we hear will benefit the industry. So once that comes out, we are hopeful that it should better the margin profile for us. That's the expectation that we carry also.

But that takes care of the CBG output, right? There are the byproducts of FOM and the realization that we get from MDA. Can you talk a little bit about the scalability of that? And what if we can do anything to improve the realization versus depending on the government again, right, which can go back and forth in terms of policy of FOM and MDA? Are there things that are in our control too? I understand your CBG point and hopefully Gale Partnerships and the likes of that will help for the CBG offtake. But that doesn't solve the complete problem to get to sustain the 50-60% EBITDA margin that we have today.

No, no, no. So when we began, our price of solid FOM that we were selling was at around 500 rupees a ton. And liquid, we were giving it at free of cost. Today, if you see the price of solid beer selling is almost at about 2,500 to almost 2,800 rupees a ton. And we also have some long-term off-take contracts with companies like Rastria Chemicals and MCF and IRCO, Jai Kisan. We're also in talks with companies like Coramundal, wherein there is an interest from these buyers to buy solid fertilizers at almost 6,000 rupees a ton. So if that happens, without being dependent on the policy for MDA or the subsidies, we still will end up achieving at least 2x of the revenues that we are achieving in the solid side. With the liquid side, there still needs to be a lot of improvement in terms of the NPK values and the mineral content in it. And we need to bottle it in a certain fashion so that the farmers can use it in a spraying mechanism. Unlike right now, they're doing a flooding of these liquid fertilizers in the farm. And because they are flooding it, the price also of the product is very low. So we need to do a little of market development in terms of liquid, but solid, I'm sure we will end up achieving a little more, I mean, a larger benefit if we give it to the B2C sort of, I mean, B2B customers. Also, there are discussions happening with Ministry of Fertilizers for keeping this MDA in a different tangent to promote organic fertilizers. This is still in very early stages. So, we are hearing rumors that there could be an entire new policy for the subsidy for MDA also. But as far as we are concerned, we are trying to be less dependent on government policies and be independently viable without the subsidies.

Good. Thank you, sir.

Thank you. The next question is from the line of Sriram Palinyapan from iThotPMS. Please go ahead.

Hi, sir. So, do we have the required pipeline infrastructure for the CDG plants related to ultra-volt Sumi gas? And what does Sumitomo bring to the table as a partner in both CDG and SAX?

Just one second, Sriramji. Our apologies, everyone. I think we had some issue with the connection. Now it seems to be better. Sriram, sir, you had a question.

Yes. So my question was, like, we have the required pipeline infrastructure for the CBG plants that are built to all Suni gas, and what does Sunitomo brings to the table as a partner in both CBG and SAS?

With regards to the pipelines, we have a cluster. So there is a scheme called DPI from the Government of India. It's called direct pipe injection. And in that earlier, the scheme provided for 50% of the pipeline cost would be borne by Government of India and 50% to be borne by us. But we hear in the new scheme that the policy is completely changing and the entire pipeline laying would be done by the Government of India. So as of now, most of our plants are in within 50 to 60 kilometers of distance from the injection points. So since we have the IPs very close by, it is good. It is easier for Gale also to do the uptakes. And right now, we are using cascades to transport the gas from our factory to the injection point. Eventually, it will take time for us to lay those pipelines, or rather for the government to lay those pipelines, but that is completely being done by Gail or government. And with regards to Sumitomo, We seem to believe that they have one of the investing companies, which is into CGD networks, and in the area that we are operating these nine CBG plants, this CGD network is a CGD licensee, and for them to have a backward integration of gas availability, they seem to be interested in having this investment in the CBG business.

Sir, and may I know when the loan related to the pledged shares will be repaid, may I say?

Sir, so basically this loan is not against the pledged share, that is called LAT. This loan is given as a collateral against the loan. So, basically these are the term loans which we have availed for our small plant in the beginning when we were establishing a 2000 TLPD and as well as for a dual feed integration. Now we are in the process of getting released this place here. We have requested both the lenders, SP and Areda, whom these shares are placed to release it on immediate basis. They have started acting on our proposal also and they are doing the loop loop.

Hopefully, in this quarter, we expect this charge to be released.

Sure, sure. My last question, is the SAF blending target is sustainable to the airlines because, like, it seems to be twice or thrice costlier than the actual ATF?

So, if you look at the international air turbine fuel prices today, it is still hovering around 210 rupees to 220 rupees a liter, whereas the subsidized domestic ATF price is around 125 to 130 rupees. The realistic price earlier used to be about 100 to 110 rupees a liter, so there is already a 20-25% jump for domestic price and almost 2x jump in the international fuel prices. So, our expectation of SAF price is at about 1.8 times or about, give or take, about 180 rupees a liter to 200 rupees a liter. So, that is still within, I mean, cheaper than the international prices because of the Middle Eastern prices. But eventually, when we keep scaling up our capacity utilization, we expect the price of SAF also to come down and be more viable for the aviation fuel, I mean, airline companies or airline carriers. There is also this carbon benefit that airline carriers will end up gaining, and that carbon benefit will offset their cost of carbon taxes in certain European countries. So it's a mandate that they literally will have to use.

Thank you.

Thank you. The next question is from the line of Nikhil Gupta from Vayu Capital. Please go ahead.

Good morning. Thank you for the opportunity. Most of the questions are answered, but I just want a clarification on the CBG business. So, I think you mentioned in the previous question that 51% is owned by us, and so, is it a fair understanding that, let's say, 1 rupee revenue will be divided in the same fashion after, and similarly, the profits as well, and the 700 or CAPEX is our number or the total CAPEX overall?

You know, sir, it's the overall growth capex of about 760-odd crores to set up in total of about 132 tons per day of CBG. So if you look at the trend, we are achieving about 4.5 crores per ton of revenue. So if we do about... So, 132 tons additionally, in the same range, that should give us the revenue numbers in the days to come, and in similar margins is what we expect. But that's at peak level.

Right. So, let's say the ATTPD with our partnership with Sumito, so we will only be able to report 50% of the gross revenue whenever we will be able to achieve, right?

51. Okay, make sense. Thank you so much.

Yes, sir. Thank you. The next question is from the line of Siddharth Bhattacharya from Autumn Investment and Infrastructure Limited. Please go ahead.

Hello, am I audible? Yes, sir. Yeah, so I have a question on the feedstock for CBG. Basically, now that you mentioned that the government is coming up with a policy to allow many feedstocks for CBG production, so just wanted to understand from an internal perspective, are we ready from a technological standpoint, if at all it makes sense for us to, let's say, set up a CBG plant purely on napier grass, for example. So do we have those technology tie-ups in place?

They're all there, sir. So what has happened is there are a lot of new technology vendors that have come in the market, and most of them give their own technology. So in terms of technology, there is readiness in the market, but a lot of people, because they're doing R&D, the rated yields are not being achieved. So, it was the same case for us also. It took a lot of learning for us individually and internally to get the best deals, and then we're repeating the same model across our CPG infrastructure. That's with Spentwatch and with Flesmar. When it comes to Napier grass, though technology is available and Napier can be grown in barren lands, I personally don't see the value there because you would require close to 500 to 600 acres of land. It's a lot of landmass being tied up to achieve 40-45 crores of revenue, right? I don't personally see value in that.

Correct. And within the existing feedstocks today, which feedstock, according to you, is the best? I mean, the one that we are already doing or you may want to shift to some other feedstock or have a dual feedstock sort of set up at some point of time?

So, I've... So let's say our fundamentals have always been to do the easier things first. And for us, the easiest option is to do plasma dance pentose. Because they have a lot of COD and BOD in them. And the methane content is also quite high. So for us, it's easier to digest these kinds of raw material and get more yield of gas. Also, we get alternate revenue from sale of...

So today, FyM sort of revenue share is what exactly in the CBG, out of the CBPA revenue, we are recording that in the same segment, right?

We are, we are. In the CBG business, if I were to give a revenue split up, we achieve about 58 to 60% of revenue from gas sales. And about 40% of revenue coming from FOM and LFOM put together.

Okay, so when you say the revenue potential is 1 to 1.1 times of the asset, that includes both, sorry?

It would be 0.8 to 1 times of the, would be the asset number.

So that includes both gas as well as FOM?

That's right.

Okay, in the same proportion?

So, it would depend on the places because the price of gas is static. It's at 84 rupees a kilo right now. And if we have longer distances to sell, we lose about 1 or 2 rupees in transportation, whereas your price of FOM varies. So, it has a big delta. If you ask us, we have sold a few bags to a company, a large government company, a fertilizer company at almost 8,000 rupees a ton also. This was a one-time order. And we are selling in the open market at two and a half thousand rupees a ton also. So the delta is that high. Correct.

And what is the technical composition of the FN that comes out? Is it higher than IT detergents?

No, the NPK value is above sub 6%. And it has a lot of other organic nutrients in it. I don't have it handy right now. But what we usually do here is we add our fly ash in the boiler. So after burning the biomass and boilers, we get the ash. It has very rich potash content in it. When we are doing a fertilizer harvesting or production, we mix this ash with the FOM, and this gets NPK content of higher than 9 or sometimes 11 also, and that gives a higher revenue to us.

Correct, and I think it is a potash content which is enabling the higher prices, if I am not mistaken.

Not really, so far a lot of people do not have a larger understanding on the spec of the product itself. Oh, okay. We are now educating them, but because for us, ash is again another waste product, and for us to create a better product for our farmers, we are mixing the ash and increasing the NPK value.

Got it. And the 6% NPK content allows you to qualify it as organic, right, if I'm not mistaken?

So, for this to be qualified as organic, it is not on the NPK value, it is more on the, how the fertilizer is manufactured or produced.

Production process, okay.

That is right. Okay, got that. Thanks a lot, Vijay. Thank you.

Thank you. The next question is from the line of Prathamesh Savanth from Abakas Asset Managers. Please go ahead.

Yeah, hi, sir. Good afternoon. I just wanted to understand of the 20% EBITDA margin that we have on the ethanol segment right now, what percent would you attribute to the, you know, the core products and what would be to the core ethanol?

My product, basically, is in the form of a . We have DDGS, which is around 47.3 per carude of the total revenue of 630 carude. And other is CO2, which is a minor amount of 1.89 carude. And some other content is in the form of 8.730 carude is a component. Over and above that, we have interest, services, and PLI, all together in around 22 carude.

So, net-net, it should be at about 8-9%, 9%? Oh, that would end it. It should be about 9 to 9.5%, sir.

Okay, okay. And, sir, going ahead, like, see this capacity utilization is improving. What kind of margins are you expecting in verticals? Let's say, excluding that the 15 crore or 15 crore litres of 4-4.

So, the skill is to buy the raw material when it is at its cheapest. And since we are still sitting on a lot of volumes, if you have seen our inventory levels in our balance sheet in March, as well as currently, we are holding a lot of volumes of grains, which were procured at a range of 18,000 rupees to 21,000 rupees a ton. Of course, there's some carrying cost involved with it, but it is still much better than the current prices of about 25 rupees or 25,000 rupees a ton. That gives us this higher yield. So the next quarter and hopefully Q3 also we should be seeing. Decent margin profiles, because we have had, we could pick raw material when it was cheapest and stock it.

Okay, okay, got it. And lastly, on the outlook per se for the CBG,

if you have to steer it further from there, what are the

on-ground things that you can see where, you know, the collection of raw material per se, like, which is helping, which, you know, which could help scale this vertical further going on.

You mean, what is helping the CBG business? Is that right?

No, it's only on the industry perspective, you know. So, supply chain, how is it developing so that, you know, the CBG as a vertical can grow faster, not just for you, but as a country.

I think offset should be one important aspect. And if you ask me, sir, I'm not sure because I fail to read the negatives in this. Because for us, we've been seeing very healthy margins, right? Unlike others. So whenever I see the industry and then people complain about X and Y and Z, I don't have anything to complain because we've been able to operate it. So, I am not too sure what betterment should be done. But, of course, minimum things like ensuring the short optics, giving better promotion for FOM, these are the generic things that I could say. But if you want to scale this business going ahead, what would be

a bigger challenge, like supply chain or the optics?

So, again, when it comes to feedstocks, right, if we're doing it with paddy straw and rice husk and things like those, supply chain of the, I mean, raw material is also a challenge and off-take is also a challenge. But when you speak of products coming from PressMud and Pentwash, I don't see a big challenge currently, unless tomorrow everybody plans to start up their own CBG plant, which I'm highly unlikely because for a plant to be... If it's viable, it needs to be of a certain scale. Let's say at least about 10 plus tons would be the minimum size that you would want to set up. So, multiple of the sugar companies in the country wouldn't be able to set up because they won't have enough raw material within their vicinity. So, whoever has this early more advantage will benefit in the press mud and spent worse space. And each of these raw material has different demands. So, I'm not exactly sure how to answer this question. Okay, thank you.

Thank you. The next question is from the line of Thabal Popat from Choice International Limited. Please go ahead.

Yeah, sorry, just most of the questions are answered. I just wanted to understand, did I miss out of what is the realization for SAF that could be considered? Maybe it's still far away, but I just wanted to understand.

For SAF, sir, our expectation is that we get a sales price of about 180 to 190 rupees a litre. That's the off-take price. And with that, our margin profile that we expect should be at around 24 to 25 percent.

Okay. I agree. I agree.

Thank you. Thank you so much. Thank you, sir.

Thank you. The next question is from the line of Shubh Gala from Bhavia Growth Advisor. Please go ahead.

Thank you for the opportunity.

My question is regarding the restatement that happened in March 26. What specialty drove the 10.5 crore in the other expense under the index 8? Which light item it was? Can you explain that?

So, that is basically on the tech ground was the

recognized and it was

a Rule 43 GST Divertal, which was which was supposed to be in the PLF out in the March quarter,

as per the India's guidelines, because it is identified during the present quarter, the impact on this 10 crore amount was to 4 crore, and the impact of this has classified into the other equity during the quarter as per the Indian reforming standards.

To be precise, I think this was an oversight from our... For the tax consultants, we could have increased our PAC margin by 4 crores. So, instead of 89 crores of PAC during last year, it could have been 93 crores.

So, because we have not classified into the past quarter, it will be automatically transferred to the real reserve and surplus, which is a part of other equity. And since this, because last quarter, we have not had a PAC, this quarter, our other equity reserve and surplus has increased in terms of net worth.

Okay, sir. Thank you. Thank you. The next question is from the line of Charchet Malo from Genuity Capital. Please go ahead.

Hi, sir. Thanks a lot for the opportunity. So, just some clarification questions. So, firstly, we have mentioned that we are going to close to 44 crores of return in net 27 in the month. So, keeping realization to 68, so we are saying we will do close to 3000 crore revenue from economic net 27.

That number you have to work out. We can only tell the volume and orders we have and which part of our MDS tool. So we can't submit on those points, but what is the order we have already disclosed, what is the future time we have already disclosed.

So realization will be close to 68 to 70, right?

It should be about 67 to 68 on our average case.

And so on the CBG front, like since we are already at 78% utilization, right, so we can expect for FY27 to 10 to 12 odd growth run rate or QQ?

It should be in a similar range itself. So that's the expectation we carry.

Understood. Sir, just one more thing. Any update on the 15 odd bureaus later or the code case that there is going on?

No, we are still trying to implement that, sir. So, because the OMCs and the policymakers are in a different fix altogether, we have not been able to get their attention, but we are confident to get that implemented.

Got it. Okay. Thanks, sir.

Thank you. The next question is from the line of Manik Thakur from Plus91AMC. Please go ahead.

Hi, sir. Thank you. Most of my questions have been answered, sir. Sir, when are we targeting a full utilization for our ethanol plants?

Sorry, I didn't catch that, sir.

Sir, I'm asking when could we reach our full utilization on our ethanol plants? 54 crore litres, exactly.

Full utilization would be an annual sale of about 55 crore liters, so that will give us a revenue of close to about 4,000 crores at the current prices. And our effort will continue to be to achieve that number, so right now we are reaching somewhere about 40, 44 crore liters. Our effort will be to reach that number hopefully in the next ethanol supplier. We're making all efforts to be less dependent on government policies and create more point of sale. So that our capacity can be fully used.

Sir, what about the private OMCs that you are dealing with for ethanol supply? Are we increasing the allocation to them as well, or is that going to be not a very fruitful for us anymore? Private OMCs, because the relations are quite lower as compared to government OMCs.

Right. So now that there is a mandate by government to supply RON95, so that's a much higher quality fuel, there is a mandate for all the private OMCs to blend 20% ethanol. So these guys are very cost conscious, and they try to cut down on all costs wherever possible. In terms of volume, we'll be able to supply. In terms of price, we will have to plan our margin profile in a manner where we supply to the private OMCs and end up still achieving at least 10 or 12 rupees of margin contribution per litre. That's the challenge that we will have, and we have plans for doing that.

So, we had an inventory of private OMCs which had not been elected in last quarter. Is there any update about that as well?

Yes, sir. So, we have now started liquidating. I think out of the total 8 crore litres that we have had, we have sold almost about 3 crore litres. Another 5 is to be sold. Hopefully, in the fourth quarter of the ESY or rather third quarter of financial year, we will be targeting to sell that.

And, sir, what are the realizations for private overseas?

It is at about 60 rupees 50 paisa.

Thank you.

Thank you. The next question is from the line of Patshah, an individual investor. Please go ahead.

Hello. Sir, do you expect any increase in ethanol prices from the government end? Sorry? Do you expect any increase in the prices of ethanol?

I would wish for it for sure, but I am not sure. That there could be any increase in the prices right now considering the inflation levels in multiple fronts because of the war. I don't expect any increase in the prices. This is my individual opinion. But any increase that comes is a bonus for us.

And can you do, like, what are your plans to deliver your balance sheet? Because as we can see, like, on an annual basis, uprocks 180 crore is going as a finance cost. So, are there any plans to deliver your balance sheet?

Yes, we have plans to do that, and hopefully, in the next call, or maybe in the next few days, we'll be able to give a plan for it. We're still in the works on doing that. Okay.

And on the last call, you said that you are going to do some advertisement or something, but still we haven't seen anything on that point.

Advertisement on the field, you mean?

Advertisement about your company or the sector.

All right. Now, we've already started, we've empaneled a certain individual who is a good strategist, a media strategist, and we're trying to create a roadmap for it, and we will be beginning all these advertisements. Because of, you know, what is the situation in the country with the ethanol backlash and stuff like those, there have been certain delays in implementing them, but eventually we'll get there.

Okay. As a shareholder, I would really like to do like fundraising or something so that you can deliver your balance sheet or anything. Because as we can see, the share price are not going anywhere from the listing day. So hope as an individual shareholder, we hope like you do something to deliver your balance sheet or so that as an individual shareholder, we get confidence in holding your share for long term.

No, I'll take that as a positively and we'll work on achieving something of that sort. Like I said, sir, there are some plans we're planning to implement to deliver the finance costs. Maybe in a few days, you'll get to see that. Okay. Thank you. Thank you.

The next question is from the line of Vaibhav Chanda from Kirguna Research. Please go ahead.

Yeah. So, good afternoon.

Is my voice audible?

Yes, audible. Yes, sir.

Yeah. Congratulations on the good set of numbers. First of all, if I am correct, we are targeting 60% capacity utilization for Q2S by 27. Am I right? Because we have scheduled maintenance in Q2S. So, can I say that?

So, right now, sir, we don't have plans to stop for maintenance. We have about 11 crore litres of supplies to be given out during the next quarter. So, in this quarter, we have done 8.29 crore litres of sales. That is in Q1. Q2, we expect a sale to be at around 11 crore litres. That's the order that we have in hand. So, we won't be stopping for annual maintenance.

All right. And so, the last year, the conditions of off-take were quite sloppy. So, is the condition the same for this year?

No, last year, we had actually taken our plant under shutdown for integration of our dual-feed plant. So, we had lost good two quarters there. But now that we don't have any CAPEX or any works going on, so we only have to concentrate on maximizing capacity utilization.

And lastly, so you talked about some pool scheme last few quarters back. So when can we expect it to roll out publicly?

To be honest, we have actually, we have been chasing the policymakers or either trying to find out more about it. The answer we get is that it could come out anytime. So I think just passing on the answer we get to you is it could come out anytime.

All right. That's it. Thank you.

Thank you, sir.

Thank you. The next question is from the line of Arjit Malalkar from Aishika Stock Services Limited. Please go ahead.

Thank you for the opportunity, sir. I have a question that a lot of sugar companies have been actually setting up their ethanol plant. So do you think it could be a concern for your business? And what would be the demand supply scenario now in the ethanol segment? And do you think that you have an upper hand over the sugar companies in the ethanol production?

Okay, so we don't see any further investments in the ethanol space as we speak. Most of the capacities that were supposed to come have all come up. And at the max, there would be three or four plants that are nearing commissioning, and that could create another volume of about 8 to 10 cro-litres per annum. So that's the max growth that we see based on the numbers available in public forums. So we don't see any further capacity additions in the ethanol space. Your second question was on.

On the demand-supply scenario, what is the demand-supply scenario of SNL currently? Is it preparable?

The demand-supply says, India has a total installed capacity of about 1,800 kWh of ethanol output. And for ethanol, blending with petrol, they have a demand of about 1,200 kWh. And there is a private demand in the alcovex industry for almost about 200 krolitres, and about 300 krolitres of ethanol is required in the chemical industry. So net net, 1,200 goes for blending, 300 goes for chemical industry, and 200 goes for alcovex. So, demand and supply, if you look at it, it's almost at part as on date, at 20% blending. If the blending goes up, we will need more capacity.

Okay, okay. My third question is about that. Do you have any upper hand in the production of ethanol over the sugar companies?

The benefit that we would have now is access to our group company that can assure us 100% of the required raw materials at a stable price. That is one backup we have. Along with our capacities, all of them are running on biomass-based boilers. So our cost of fuel is also lower than other competition. And the third thing is because since last year, Three out of our five plants are dual feed. We can consume any raw material which has the cheapest price and yields the highest margin. So these are the benefits that we have.

Okay, okay, great, great. Sir, my last question is regarding the green hydrogen, that you have a plan of setting up the green hydrogen also. So, any progress on that front?

To be honest, we have a technology tie-up with Indian Institute of Science for biomass oxification. We have an oxygen gasification technology where we can extract green hydrogen at a much cheaper price as compared to through electrolyzers. But since there is no market for green hydrogen or there is no supply chain for green hydrogen as of date, we have not progressed on it.

Okay, okay. Okay, thank you, sir. I got all my worries. Thank you. Thank you so much, sir.

Thank you. Ladies and gentlemen, due to time constraints, we will take that as the last question of the day. And now I would like to hand the conference over to Mr. Vijay Kumar Nirani for closing comments.

I once again thank all our shareholders for trusting in TrueVault and participating in this journey along with us and for your valuable questions and comments to us in steering this company towards a more successful journey. We take all your inputs very positively, and we continue to work in the interest of the company and to increase the share value for the company, for all the holders, including us. We thank you again for joining today. Thank you.

Thank you. On behalf of TrueAuld Bioenergy Ltd., that concludes this conference. Thank you for joining us, and you may now disconnect your lines.