Praj Industries Limited (PRAJIND) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Praj Industries Ltd. Q1 FY27 earnings conference call. As a reminder, all participant lines will be in the lesson-only 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Purvangi Jain from Valoram Advisors. Thank you, and over to you, ma'am.

Thank you. Good afternoon, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valoram Advisors. We represent the investor relations of Praj Industries Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings conference call for the first quarter of the financial year, 2026. 7. 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. Such forward-looking statements are subject to risk and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decision. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Now, let me introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. Ashish Gaiquaad, Managing Director, and Mr. Sachin Raule, Joint Managing Director and Chief Financial Officer. Without any further delay, I request Mr. Hashish Saifwan to begin his opening remarks. Thank you, and over to you, sir.

Good day, everyone. Welcome to Praj Industries Earnings Call, or Q1 FY27. Trust all of you had the opportunity to go through our results for the quarter ended 30 June 2026. I would like to start with my remarks on an exciting development. Earlier this week, on the occasion of World Biofuels Day on August 10, Dr. Pramod Choudhury's Center of Excellence for Advanced Bioeconomy was inaugurated at Saivitri Fule Pune University, or SPPU. This COE is a pioneering initiative that will serve as a hub for interdisciplinary research, innovation, education, and industry collaboration. The COE will create solutions for tomorrow's challenges while nurturing the talent needed to drive the bioeconomy. Now coming to the business performance. While the external business environment remained uncertain, we have made a definitive progress on a few long-term growth vectors. Generation Ethanol's domestic business continued to experience a slowdown in greenfield projects. Currently, inquiries for greenfield projects are only from customers in ethanol deficit areas, states like Tamil Nadu and Assam. We believe that this situation will continue till the time we see policies around higher blending mandates. While greenfield projects are moving slowly, we see increasing demand for other brownfield solutions, where customers are prioritizing operational efficiency improvements and value-added co-products, such as the distillers' corn oil or DCO. There is a strong demand for greenfield E&A plants where Praj has a clear technology edge. On the project backlog execution front, funding-related issues persist, and they are resulting in extended project execution cycles. The supply-demand imbalance has also impacted the project's backlog conversions. to share that we have received the order to set up our country's first commercial-scale demo plant for bio-IBA, or isobutanol alcohol. Bio-IBA blending is anticipated to be a significant step in the nation's biofuels journey. Just a 2% blending mandate for bio-IBA in diesel has a potential to create over 3,000 crore project opportunity. In the international market, we have received an order for setting up a greenfield grain to ethanol plant in Brazil. This is a corn to ethanol plant. This project will be a marquee reference for Praj in the region. We are closely following the developments in the USA market also. USA has announced We are also engaging with potential customers in Indonesia, Vietnam, Kenya, Panama, Argentina, Guatemala, Costa Rica, and Bolivia, where the governments are increasing the share of biofuels in their energy mix. This is driven by the need for energy security as well as energy costs. On the CBG front, to establish compressed biogas, or CBG, as a major pillar of India's future energy mix, the Union Cabinet has approved Godardhan, the National Circular Bioenergy Scheme, with a total outlay of over 23,000 crores, set for implementation between FY26-27 to FY20-35-36. This transformative scheme aims to scale domestic CBG production nearly tenfold, mobilize large-scale private investments, and build a vibrant circular bioeconomy nationwide for energy security and affordability. Gober then addresses key execution challenges by establishing the strong, predictable foundation needed to bring India's CBG sector to national scale. Through assured demand, remunerative and stable pricing, capital assistance, pipeline infrastructure, continuous technology development, the scheme transforms CBG into a bankable infrastructure asset. Ultimately, this comprehensive policy framework is expected to serve as an inflection point that will expedite investments. State governments such as Maharashtra, Odisha, Chhattisgarh, Assam have also announced policies to support the capacity creation for CBG projects. With Praja's proven technology performance on multiple feedstocks, we are ready to leverage this opportunity. Our life cycle services business is growing steadily, quarter over quarter. Via our lifecycle services business, we continue to serve our large customer-installed base. We provide physical and digital services that ensure optimal plant performance and efficiency. We also offer performance enhancer solutions as well as the biogenic CO2 capture solutions. During the quarter, we conducted several trials for performance enhancers in Latin American region, which will help us expand our offerings in the region. On the SAF front, we have received an order to deliver detailed engineering for ethanol to SAF plant from an international customer. We had completed the basic engineering order for this customer in the last quarter. This engagement is progressing well and positions Praj as a technology partner for alcohol-to-jet SAF projects. In an important development, the International Civil Aviation Organization, or ICAO, has officially approved the entire supply chain production and handling of sugarcane and sugarcane derivatives, as well as the production of sustainable aviation fuel using sugarcane-to-jet pathways. This certification helps alcohol-to-jet technology as an accepted pathway for SAF to our engineering businesses. On the Praj GenX front, our team has secured a significant global supply agreement as engineering and manufacturing partner for a critical modular infrastructure for hyperscale data centers. This strategic framework guarantees a minimum business volume of about U.S. $50 million over the next two and a half years, with a potential upside depending on the customer project schedules. Importantly, this marks a strategic diversification into a high-growth global engineering market outside of Praja's core bioenergy business. Leveraging its established mega-manufacturing capacity at Mangalore. The partnership enhances PrajGenX's global credential and will enable us to pursue similar international opportunities and develop hyperscale data center infrastructure into a meaningful, sustainable business vertical over the coming years. For our ZLD and PHS businesses, batteries, semiconductors, and solar panel or BSS segment in India is opening new opportunities. We have received our first combined contract for supply of ultra-peer water and ZLD solutions for a semiconductor company in India. This helps in expanding our solutions offerings to new emerging industry segments. We believe efforts put in by company over the period of last two years have started creating new opportunities as we move further into this financial year. We shall build on this momentum and deliver improved performance. With this, I now hand over to Sachin for his comments on the financial performance. Thank you.

Through the financial highlights for the quarter ended 30 June 2026, the consolidated income from operations stood at Rs.7.16 billion as compared to Rs.6.4 billion in the quarter 1 of last financial year. PBT before exceptional items for the quarter stood at Rs.210.5 million as compared to Rs.96.09 million in the corresponding period of the last year. Profit after tax stood at 116.1 million, as compared to 53.4 million in Q1 of FY26. Of the total revenue, 66% is from bioenergy, 22% is from engineering, and 12% is from Praj High Purity Business. Export revenues accounted for 25% of order 1 FY27. The order intake during the quarter was $10 billion, with 57% from domestic market. After total order intake, 62% came from bioenergy, 28% from engineering, and a balanced 10% from PHS business. The order backlog as of 30 June 2026 is at $45.9 billion, comprising 63% of domestic orders. Cash in hand as of June 30, 2026 is Rs 6.8. Today's AGM, shareholders have approved the payment of final dividend of 180% per share. The great strategic initiatives like blending technology for design, building meaningful partnerships in GenX for modularization solutions in multiple applications like data center, and the internationalization has started showing. Very happy. Thank you all for joining. We would now be happy to discuss any questions, comments, or suggestions you may have.

Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touch-down telephone. From the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, please restrict yourselves to two questions only. Should you have a follow-up question, please rejoin the queue. The question is from the line of Sajal Kapoor from Anti-Fragile Thinking. Please go ahead. Yeah, many thanks.

I see Praj in two buckets, actually. So, there is Sarkar Nirbhar, which is largely bioenergy, where growth is materially gated by policy and mandates from the government, various governments, not just Indian. And then there is this Ardhu Nirbhar bucket, as I call it, because that includes Gen X, High Purity, PHS, and ZLD, where growth should depend much more on Praj converting capability into customer capex. I want to focus on the second bucket because this is where execution, not policy timing, should determine the outcome. And I have two questions. First on Gen X, you now have a USD 50 million global supply agreement over the next two and a half years for hyperscale data centers. What does this change in the trajectory of Gen X and how large do you think this business can become over the medium term? That's my first question.

Thank you, Kapoor Saab, for this question. So, yes, in Praj GenX, we have the global expertise for providing modular solutions to fabrication that we do in this mega facility at Mangalore that we have. And data centers is seen as an emerging opportunity for us, and therefore we have this agreement announced with the EPC who helps their end customers to hyperscale data. We certainly are pivoting to this new area. We will be delivering our first project in the coming days over the quarter two, quarter three, quarter four of this year. As we deliver this and we get more and more knowledge from this segment, we expect that this becomes a vertical within our progenics that will sustain the orders and revenue over a period of time.

That's helpful. And second, I mean, looking across the entire, this Atmanirvara bucket, what specific growth milestones should shareholders hold you to over the next two to three years across Gen X, high purity, PHS, and historic data, FY23 to 26, I know you were not with Praj for majority of that period. The high-purity, ZLT segments, or the engineering segment, as we call it, hasn't grown more than 11% off the top of my head. So the question really is, you know, what should this portfolio look like in, let's say, FI28 if strategy is working as intended?

Yeah, no, I think it's a good question, Kapoor Sahib. We have started to make sure that we grow all the businesses that are in our portfolio in a balanced way. As you know, the government is also making sure that all the industry is sort of not spreading the pollution. They are therefore making sure that the laws are, you know, implemented strictly for any emissions coming out of chemical industry. So that helps us in the growth of our ZLD solutions. Also, the government is coming up with new areas, as we mentioned, where we can manufacture our own batteries, our own solar panels, and our own semiconductors, and that needs a very special high purity water which is also a part of Praj's portfolio. So we do see that there are these new segments that will help us, what you call the Atmanirbar segment, and we will continue to leverage the growth in these sectors to pursue our solutions.

I'll come back in the queue.

It's from the line of Amit Alwani from PL Capital. Please go ahead.

Thank you for the opportunity. First question is on the execution this quarter. I can see bioenergy at 474 crore seems a bit on the lower side compared to the opening order book we had. So, any challenges with respect to execution with any existing projects? And second, in the earlier quarters, we have been highlighting some challenges with respect to collections and issues at the client's end. And third, commodity issues. So, if you could explain how all of these things affected the performance.

Thanks, Samit. So, on the question of execution, we have a mix of, you know, different types of projects in our backlog that we are converting into revenue. The ones where there is a slowness and an extended period of execution is the domestic first-generation ethanol plants, where sometimes there is an issue on the funding for the end customers, or also there is an impact, As I mentioned in my opening remarks, where the supply-demand imbalance in the ethanol market has also slowed down some of the execution cycles, right? So there is that impact, but then there are other projects in our backlog where we are able to accelerate. So overall, what you saw in quarter one was the mix of the second question that you are asking. Because of the slow conversion of some of this backlog, it also has a rubbing effect on the collection of our dues, et cetera. So we are working on these in the coming days and quarters.

We are figuring out the ways and means of answering that based on either contractual arrangement or some kind of advanced procurement, which we have done in the earlier years also. So, we are figuring out the ways and means of tackling those issues. Yes, because of the current geopolitical scenario, there will be some kind of pressure on the material cost, but we are cautious and aware about it and dealing with it.

The second question on all the new initiatives which have started, kind of you also explained very elaborately. So one was wanted to understand the Genex order, probably out of the more than 10 customers, this is first conversion, can we expect more customers and the break-even target now for Genex since we have started getting the order there. And second was the technological partnership, which you explained in this, I think, we can understand the addressable market over 12, 18 months. And same for the semiconductor high-purity water, what could be the kind of CAPEX or any understanding of the pipeline of these kind of orders? Can it have an accelerated growth in high purity? So that is my last question. Thank you.

Yeah, Amit, we've just entered these segments of data centers, semiconductors, et cetera, right? So we are first, our focus will be on a good execution, quality execution, making sure that our customers are satisfied. We want to establish ourselves as we pivot into these new segments. And while we do that, we will know what is the future potential that we can lay our hands on, right? So, you'll have to wait for some time, but we do believe that especially in data centers, we can have fairly good opportunity space developing.

Now, what's the sort of margins similar to what...

Sorry to interrupt, Mr. Anwani. May we please request you to rejoin the queue, sir, for the follow-up. Thank you. Participants are requested to please limit yourselves to two questions only. Should you have a follow-up question, please rejoin the queue. Next question is from the line of Aditya Mongya from Kotak Institutional Equities. Please go ahead.

Thank you for the opportunity. I want to get a sense of the margins that you intend to make on the BIOS ENG front. And our ballpark fans will be useful over here as we think through this business scaling up over time.

Thank you, Aditya. So, okay, since you touched upon margins, if you look at our quarter one results, you know, I just want to, for the benefit of all investors, I want to say that our margins were a little subdued mainly because of the volumes and the mix. Going forward, you know, certainly we'll be working on both international mix can improve our margins, and with the Gen X, you know, orders that we talked about, our volumes can also get better. You're talking about the CBG or CNG margins. Is that what your question is, Aditya?

Yeah, the compressed biogas projects.

In line with the industry, because as you know, the typical market players, and there is a fair amount of players who have come into the CBG market, and in the past, before Goberdan was announced, I think the market was to some extent limited. But what we hope is that when the market, you know, opens up with the government opportunity and the scheme that is announced recently by the government, plus the state governments coming and providing to the private players, we believe that both the opportunity size as well as the overall margin will be better. And that's what we are hoping for.

The second question was again on margins. I wanted to get a sense on the reasons why gross margin has expanded on the standalone side. The RMX is still impacting you and then impacting you even more. I couldn't understand how the gross margin situation on the standalone is happening. And allied question, if you could give us a sense that of the two problems, RM, as well as site expenses, can your margins from here on start looking better, or will these two problems still be an overhang, or an incremental overhang, versus margins reported in the quarter, in the near term?

Okay. I will just answer this question in two parts. One is margin of this quarter versus margin of the last quarter, that is March quarter, and margin of this quarter and margin of the last corresponding period quarter. Both have different complexities and different colors. So I would like to explain it to you in little bit detail so that everyone will get benefited. This quarter, we have seen 3% margin improvement only on the material cost, but at the same time, if you look at my other expenses, I have gone up by 4%. As Ashish earlier was talking about, the mix of sales and mix of execution within the project defines these two elements of our expenses, and that's how they define what happens to my project or the revenue or the margin. So, that's the simple answer for March to June quarter. But if you look at June quarter of last year and June quarter of this year, you will see a very different change in the material cost, running down by 7%. The material cost implication is mainly because of higher export sales, which we had in June 25 as compared to June 26. Even in June 26, whatever export orders which we executed, the component was on the, majorly from the African market, where the margins are not as high as compared to either Europe market or the Americas market. That's the reason you see this kind of a change in the cost of material. Mainly the cost of material and other expenses, if you look at, they generally compensate each other. This is mainly because of what part of the project we are executing.

Sir, the same part of the question was on flight expenses. If you could give a sense of how much are they impacting margins today in the storm of execution and how to think about it in the future?

I will not say that they are impacting, impacting, because this is a part and a parcel of the execution which is going on. So it is not that odds have gone up, but at the same time, the revenue component, again, in the revenue component, you will have majorly two components. One, the equipment-related revenue, and another one will be site-related activities revenue. And depending on which revenue component is getting executed during the period, these two elements, cost of material or other expenses, will act accordingly. So it will not be right to say that, no, these site expenses are gone up, and there is an impact of that. That's not, as I said, because material costs and site expenses generally compensate for each other. Over and above that, we are saying that going forward, if there is an impact on the material cost movement which is happening, especially on the steel side, we are cognizant of that, we are aware about that, and we are trying to take the advanced measures so that the material cost impact will not be there going forward.

Question if I may, I will fall into the queue. Your stand-alone margins are lower than your implied subsidy margin. Is it a way of looking at it at an EBITDA level or should we vote it differently at a lower level? Why am I asking this question? Is there some subsidy that is firing very well?

At least, because the JNX numbers will keep on changing depending on how their execution is going to happen, and that's the component which will show something impacting on the consolidated number. Earlier, it was very simple. My consolidated numbers were simply stand-alone number plus IPRT number, and that's how the numbers used to get reflected, but today, because of the IPRT component, these numbers will show something different. For example, I mean, why I'm saying so, because in one quarter, if the engineering services component comes up on a higher side in GenX, that quarter will show GenX number in a different way as compared to other quarters of the GenX. And that's how the consolidated and standalone numbers will be.

I'll get back to Jackie.

Thanks. From the line of Chailesh Kanani from Asian Market Securities, please go ahead.

Regarding our current capabilities, regarding municipal solid waste for CBG, because in previous calls, we have highlighted that municipal solid waste was excluded from our office, but this year's annual report is talking about that. So, how should we reach that? And additionally, can you also provide some updates on the progress of CBG joint venture with BPCL, considering the recent positive developments for CBG?

Okay. Thank you, Shailesh. So on MSW, I think there are different challenges. Without getting too much into the technicality, the segregation of the feedstock, depending on what you can really put into a digester to generate gas, is what is the crux of some of the challenges that everybody deals with. So we are definitely looking at that segment. We are looking at what can be the ways to solve some of the current challenges. We are still in that phase where we are looking for tackling these challenges, and once we have good solutions, we can accelerate that part of the CBG market. Currently, you know, because we are dealing with these challenges, we've said that we're not looking at this aggressively, but we are not ignoring it completely, if that makes sense. Then the second you talked about is the JV that probably was talked about in the past for CBG. We continue to pursue those JVs. We continue to talk about the JVs. And with the Gobergan coming into play, probably, you know, we will be able to speed up some of these discussions. Right now, because they are in the play, I would not be speaking too much about it as far as GVs are concerned.

But that would kind of substantially improve the return profile and kind of improve the possibility of expansion, right, over this joint venture?

Yeah, certainly. I mean, joint ventures is one of the ways we can grab the market, you know, as it is developing. It's not the only way, right? So we have done many projects which are standalone, where we have also partnered with the customer to bring in the investments. And JVs, especially with the JVs that can happen with the oil marketing companies, etc., there it can give some added advantage of the final product getting consumed, etc., etc. But it's not the only way, is what I would like to emphasize.

My second question was with respect to recent GenX order rate in the data center space. So can you give us some more color in terms of scope of our product profile and any ongoing deal pipeline in terms of numbers? And also I wanted to know how much of this 500 crore's order value we have kind of booked during the current quarter.

The part of our industry's business, multiple types of offerings, which is called the ETCA, which is the Energy Transition and Climate Action type of segment, where we have the green ammonia, green hydrogen, etc., etc. So we continue to have those capabilities, but that segment in the last couple of years has gone very subdued. So, therefore, we had pivoted to the conventional areas of oil and gas, refining, petrochemicals, fertilizers type of a segment, and now with the announcement of this data centers agreement with a global EPC, that gives us the third, you know, sort of segment where PrajGenX can operate. So we are actually expanding the basket and therefore increasing the scope of what we can offer to the different markets, and we will continue to do that. And, you know, that's what will give us ability to manage some of the headwinds that may come up in one of the segments, So that we are not just focused on one segment and therefore get stuck, but we can hedge our opportunities and therefore, you know, continue to operate and get orders and revenues. So that's how the Gen X strategy is working. Sir, any color on product products?

Sorry, Mr. Kanani, may we please request you to rejoin the queue, sir. Question is from the line of Udith Segal from Pinpoint X Capital. Please go ahead.

Good afternoon, sir. Sir, I wanted to understand, say, in a CBG plant of, say, about 10 tons or 12 tons or even 20 tons, what would be the value of equipment that we can supply typically? And what is the kind of market share we are looking at, you know, as the CBG rollout happens in India?

Well, thank you for the question, but I think some of these details we may not have. What we can say is we do an end-to-end project for the customers, right? We have the technology. We can do the complete engineering. We can do the entire construction of the plant. We also have the solutions to clean up the gas and, therefore, inject it into an infrastructure of pipeline or taking it onto the cascades that can supply gas to the end user. So the entire gamut, and also not just the project execution, but we also have the capability to provide the operations and maintenance services and further enhancement services. So it's a fairly comprehensive set of offerings for CBG that we have. And you talked about market share, et cetera. I think it is difficult to say that for now because there are many segments of CBG market. You have different feedstocks. You have different, you know, business models that we get into. So, you know, it can be not a single number.

And market is still maturing. It is in a very nascent stage. It's too early to say that what is the market share per se. And the question which you are asking from the offering point of view, So, technically, we can offer end-to-end solution in CBG. It's our choice. Then, depending on the customer's preference and the understanding with customer, we can pick up and deliver what is required for the CBG. But starting from digestion to the cleaning of biogas to delivery, we actually can handle end-to-end entire…

And, sir, with respect to the data center offering, could you kind of explain what exactly is the product or like the broad contour, like we want to understand what exactly is the tech?

Yeah. So, again, without taking too much of everybody's time, what we offer is creating the infrastructure for server halls. These are large server halls where, you know, the server racks are kept for compute power, and we do both the infrastructure for server racks as well as the cooling systems that are required to keep the temperatures down. That is where we are starting our engagement, and as we proceed, there will be more and more solutions in our portfolio that will help in the infrastructure for the hyperscale data centers. Thank you, investor.

Now, Sagar, an individual investor, please go ahead.

100 KLPD is a ethanol plant.

What will be the capex excluding the cost of the land, and what will be the scope of Praj in that?

Very ballpark number, not necessarily the right number, depending on the feedstock. 100 KLPD ethanol plant can cost you somewhere between 100 and 120 crores kind of a number, but very ballpark number. It completely depends on what kind of a feedstock you are using, what kind of an ultimate product you are going to go for. It depends, but that's the ballpark number. The scope of charge in that? If you look at, we generally say our scope can be in a range of 50 to 60 percent, but as I was answering a question related to CBG also, it completely depends what we want to do also in that particular project. For a technology-related part, including the critical equipments, which are required for that, and depending on the necessity and depending on the geography, we can also undertake the activity related to installation and construction.

If we are only the process part, then around 25 percent? Around 30 percent. Around 30 percent. Okay, sir. Thank you. And, sir, another question I wanted to ask, in Greenfield Project of Brazil, it is for how much KLPD, because here the plants are larger size, right?

Sorry, for which region, you say?

For Brazil, we had got a greenfield plant, no?

Yeah, so that is for how much KLPD?

That completely depends on the availability of a feedstock with a customer. Yes, you are right. The average capacity of greenfield plants over the last couple of years has actually gone up. Earlier, this used to be 60, 80, 100. But now people are even talking about 200, 400 kind of a capacity.

Yes, for Brazil. So, if you're talking about the Brazil part, then this is almost 800 KNPD type of capacity. It's a fairly large capacity. It's a corn-to-ethanol project that we are doing end-to-end. Okay, sir. Thank you.

Thank you. Next question is from the line of Manish Goyal from Thinkwise Wealth Managers. Please go ahead.

Thank you so much. Two questions, sir. One on CBG, sir. For Praj, which pitch talks are ones where we have achieved fair degree of success and probably have a good degree of yield from the projects which we have implemented in the past? And if you can give us more perspective on that. And second on Gen X, what is the size of order from the data center 500 core piece that has been booked in the engineering? Because overall engineering order booking is much lower than the data center order. So how much has it been booked and going forward, how will it load facility, Gen X facility to probably break even in the current year? For the full year, or we probably, when do you expect it? What is the share of GenX in the total engineering order? Manish, you have asked too many questions. Yeah, I'll repeat, yeah.

All right. Yeah, first of all, we have technologies for all kinds of feedstocks, from waste to energy. Successfully, we have delivered in the past, as the opportunities came to us, on Resmalt, which is a waste from sugar mince. We have done it successfully on the rice straw, which is an agricultural waste, and also the napier grass, which is where we got the opportunities to implement the CBG plants, right? So that is the answer to your first question. Second thing, you talked about Gen X. The 500 crore order is not booked by us completely. We have taken a portion of that because, you know, this will happen over a period of two and a half years, right? And so in our order books, we will book them as we get the, you know, firm confirmation of the phases and the different data centers that our customer will construct for the end users, the hyperscaler data centers, right? The third one that you talked about is the break-even for GenX. So our endeavor always has been that we do the break-even. So hopefully by the end of this year, we should be able to see that break-even because our volume for the order book for GenX is looking better now.

Sorry, sir. I'll come back on the first question. We have implemented a project for Kersma, Dyshaw, and Napier Grass. This project viability level in terms of if someone is wanting to put a new project from the technology, what we offer, has it become viable? And now we get to number one, and the other question which was left out was on the autobook of...

Each of these technologies is viable and can achieve the capacity. Sometimes, depending on the location of the plants and the capacity of the customers to get timely feedstock is what affects it. So you need to have continuous supply of quality feedstock so that your generation is not interrupted. So that is where some of the challenges can lie. But, like I said, for all these technologies that we discussed and the feedstock, yes, the viability is achieved.

My last question is ended. Share of order books in engineering for GenX, if it's possible to share.

Within engineering, right now we are still showing engineering as a one basket. At the opportune time, we will talk about GenX separately.

Thank you so much.

The question is from the line of Ketan Archeda, a retail investor. Please go ahead.

Thanks for the opportunity. Sir, if I look at the past decade, about 10 odd years, our margins have largely been in single digits for the entire year, bearing for our FY24 and FY25, where we had good margins. So, that looks like that is how the business was structured for the past. I'm sure you've made a lot of changes. We've done a lot of, what do you say, innovation, etc.

We would not like to give you any particular guidance on the margins because we are still working on expanding our portfolio and also changing the mix. As I mentioned to you earlier, that we are making sure that we have a lot of things in the basket of our offerings, and therefore that mix will help us to get better and better margins. For example, one of the ways to look at our mix is our domestic versus international orders. The other way of looking at our mix is projects versus services orders. The third way of looking at it is between the first-generation ethanol and some of the new biofuels that we are introducing, like isobutanol, CBG, et cetera, right? So as we develop these different mix in our portfolio and then we pursue the markets, we obviously hope to improve the margins that you have seen historically, as you mentioned, single digit, and get it to a better position. So, that would be our response to your question.

Just a continuation of that, I was not looking for any specific guidance, but I was just looking for some direction. So, you know, just to take an example, you mentioned about services. Now, I am...

Services margins are definitely better than the project margins in any type of business, not just ours. And as we change the mix and increase the share of services by leveraging our installed base, by providing more and more services, both digital as well as the physical services, therefore have that impact come into the overall net margins for the entire business.

We have elaborated

what we are trying to do for the expansion of margin, naturally that's our objective, of course, but at the same time there are so many developmental activities which are happening, especially we have seen the investment in JNX, our margin in that case. We continuously keep on investing into R&D, which is meant for expanding our product portfolio and the technologies basket. So we will not be, unfortunately, able to give you a specific segment, giving a specific margin kind of a scenario at this point of time. Only thing which we mentioned in our opening remark, that whatever we are trying to do has started showing us the results now. First is Gen X, second one is internationalization, third one is the new development or an alternative for ethanol as a product. We have not yet seen what is going to happen on the sustainable aviation field, so there are multiple new avenues which are opening up. All these new avenues will also may be asking for some kind of an investment within the form of a capital investment or a revenue investment. We have not yet reached to that kind of a maturity level where we can say that, oh, these businesses have reached to this stage, these are the expenses which are going to happen, and this is the margin which will keep on giving you quarter after quarter. It is still in a developmental kind of a stage, multiple things which are coming up. We believe that now going forward, they will start converging and starting giving us the top line and the bottom line, and that's what we said that based on the order book which we have booked right now, we will see this Thank

you for the opportunity again.

One data point over here, the exports have declined quite immediately while and the domestic numbers have, this is revenues again, have grown up quite appreciably while. Could you give us a sense of both these points?

But I was mentioning that my exports revenue in this quarter is less as compared to the last, and that's what has taken, I mean, when you look at from the margin point of view, my margin looks lower.

Simply asking about margins, but why was there declining exports in the first place of the question, and why is there such an acquisition domestically, because it gives some more color over there.

So the numbers on the export side will start picking up on that export side. So it completely depends on what is the entry point and what is the execution cycle for that particular order.

And what's from the demand on or the growth on revenues on the domestic side?

Aditya, you know that we don't give guidance. Okay, sure.

The second part... And as Sachin has explained to you, Aditya, I think if you look at our mix of orders, International orders are about 40% to 43% this quarter, and so that share has increased. But now these orders will be converting over the next few months and quarters into revenue. So as you see in the quarter ending June, the share of international revenue was less, close to about 25-30%. That will start to move better, and that's what Sachin explained to you. So you will start to see that percentage.

The second question was more on GenX. Well, you're not alluding to a backlog share, but whatever the backlog is, against the top line that you need to get for break-even, how much of that top line can be achieved by the existing backlog? And just clarify for us when you're saying break-even, is it at an EBITDA level, which means calls are still below, or is it at a PBT level?

In GENIX, it will not be right to start monitoring of the backlog and the new orders for a reason, because even the new orders are going to have a little shorter delivery cycles now, especially in the data center where we are getting these new orders. So there is a possibility that what orders which we got in the first quarter for data center for GENIX, we will have to deliver it actually before the end of this initial release. So, Aditya is going to be beat off a little, again, complex on the basis of entry point of order and a delivery cycle for that. We don't have huge order carry forward for GenX, as you know, from the March engineering orders, which I have already declared what is the backlog from that. I'm not saying that it is having a huge kind of a carry forward, but the buildup which is happening right now is very impressive. That's what we believe from the financial, someone was asking on the break-even side or on the some kind of a level playing kind of a thing happening for Gen X, which will happen in this year. That's what we believe, and that's what we are working on right now.

So this is EBITDA break-even that you are working toward, not EBITDA break-even for the United States?

You can consider EBITDA break-even.

You got that. Thank you. Those are my questions.

Thank you. Next question is from the line of Daval from Infinite. Please go ahead.

I just wanted to have an update on bio-isobutanol. Where are we on that first time? And also, any color on biobutamin and PLA shaping up in that category as well?

Sure, Daval. So, I don't know if you had a chance to listen to our opening remarks. As you mentioned, we already have, in the previous quarter, received an order to build a bioisobutanol plant of, you know, demo plant. We are doing that right now. The construction will get done and completed by end of this year, by December of 2026, right? So, and, you know, parallelly there are government agencies who are testing the bioisobutanol blended into diesel and checking the engine efficiency, et cetera, et cetera. All of that is happening. The other biomaterials that Praj has developed, biobitumin. By the way, we have a technology right now for lactic acid, which goes into a PLA, just to make sure that we clarify that. We are engaged with various discussions with our customers, prospective customers, and we are hopeful to get, you know, the success for these, you know, co-products.

With the conversation that we are having with the ministry, do you foresee any mandate coming in for bio-isone or bisobutanol blending very soon, or it's going to take long?

We really don't know the timing, et cetera, right now. What we can say is science-wise and the viability of the technology-wise, Praj is ready. So if the mandates come, we absolutely think that we have the right technology and the right expertise to get it done. Diesel is a big, you know, transport fuel that gets used in India, and we believe that biofuels getting blended into diesel is a good thing for national interest.

Thank you so much. Thanks for the information. Thank you.

Take this as the last question for the day. I now hand the conference over to the management from Praj Industries Limited for closing comments.

So thank you, everyone, for your time today. In case you have any more questions, please feel free to write us at info at praj.net. We wish you Happy Independence Day in advance, and have a nice day. Thank you.

Thank you so much, sir. On behalf of Praj Industries Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.