TruAlt Bioenergy Limited (TRUALT) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q2 and H1FI 27 Earnings Conference Call of Trueall BioEnergy Ltd. 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 this conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I am now on the conference call over to Mr. Vijayanirani, Managing Director. Thank you whenever to you, sir.

A very good morning to everyone.

Thank you for joining this conference call.

I am happy to report the Q2 numbers for the financial year of 27. There has been a growth in our revenue numbers. The results have been posted. And as expected, the prices of raw materials have gone up, and due to the prices of raw materials going up, there was a shrinkage in the margins for the company for this quarter. However, thanks to the IPO that we did and the working capital limits that we have availed, going forward, we'll be able to stock up raw material at decent prices in order to make sure that we have a stable margin during operations. During the quarter, we received, in excess to our 24 crore litres of allocation from the public oil marketing companies, we received an additional volume of 10 crore litres, thanks to the Supreme Court judgment in the month of July, uh, August.

Yes. With that, our total supply, or rather the

allocation for the current, for the last internal supply here, went up from 24.5 crore litres to 34.5 crore litres. And in addition to the 34.5 crore litres, we also received an additional volume of 5 crore litres from the oil marketing companies, taking the total volume to almost 40 crore litres for the supply For the last ethanol supply year, this leads us to an average utilization of almost about 65% up to 70% of our total installed capacity. Going forward, we expect that the capacity utilization increases and we lock in an average capacity utilization of at least about 75% to 80%. The next tender for the ethanol supply year, 2026-2027, starting from November up until October of 2027, has already been announced and the tender is out now. As expected, in the current tender for the next year, there is a ban on use of sugarcane juice as well as B-heavy molasses for making ethanol. That leaves a lot of pressure on grains for manufacturing of ethanol and also sea-heavy molasses. And that also means that close to about 500-odd ethanol plants in the country, close to 230-odd plants which are monofeed using sugarcane derivatives as raw material We will not be able to supply continuous ethanol or we will not be able to participate in the tender for a long, I mean, for continued supply. So out of the total installed capacity of about 1,900 clolitres, there will be a shortage of about

300 clolitres coming in from the sugar-based ethanol plants.

So that leaves close to about 1,600 kL expected to be supplied for the current year, and of that 1,600 kL, considering ENA as well as the private consumption that is for the chemical industries, we expect that the allocations for the current year will be in a better shape. However, due to the El Nino impact, we will probably see a shrinkage in the bottom line because of the price of raw material and availability of raw material also. We will make all efforts to book raw material at the cheapest available prices and stock up for the whole year in order to increase our bottom line. That's on the ethanol front.

In the CVG, we have already commissioned our first CVG plant

under the joint venture with Sumitomo Corporation. The 20TPD plant is up and running, or rather, it's being ramped up to capacity. The other two plants will be put to use within this quarter. So that takes the entire CVG business to four operating plants. That is, one in Leafinity, which is of 12 TPD, and three in 2-volt gas, 2-volt Sumi gas private emitted, which is a joint venture with Sumitomo Corporation. By the end of the quarter, we will have an installed CVG production capacity of about 72 metric tons a day. And going forward, we also plan to start construction of additional six units along with Gale. That said, the CBG business is going to be a big revenue driver or growth driver for all. Considering the Govardhan policy that was recently announced, there have been wonderful

incentives and packages that are available for company that will end up creating a huge

valuable opportunity for

our growth plan in the CBG sector. In the sustainable aviation fuel business,

our front-end engineering is ongoing, and we were expecting that the policy for incentive and the roadmap would have been announced by now, but due to certain clarity required, we still don't see the roadmap coming in from the government of India. Once the roadmap is out, we plan to start making picks for the sustainable aviator business. We have already received an incentive of about 150 crores as a viability gap fund under the PMG1 Yojana for the proposed plant.

Going forward, our fuel retail business, we

have already set up about seven outlets and another nearing commissioning, but due to the Concerns, or rather the crude prices, the volatility in it, we are taking the further growth of the outlets a little slow. That said, 2-Alt Bioenergy in the ethanol business has completed all of its proposed CAPEX, and all we got to do now is further increase our capacity utilization and

better the margins so that there's good returns. With that, I ask our CFO, Anand Keshwarji, to take us through the details.

Thank you, sir.

Thank you for joining us for the Q2 and H1 FY27 results, discussion of Q2 or Banner G Limit. I will take you through the key financials and operational highlights for the quarter and for the year of FY27. Let me come front of the revenue performance. So, our top line Q2 for FY27, our revenue from operation is stood at 811 crore compared with 115 crore in Q2 of previous year. This represents a very strong year-on-year growth of approximately 6, not 6%. On a subsequent basis, revenue increased from 627 crore in Q1 FY27 to 811 crore in Q2, reflecting a continued improvement in operating activity. For H1 FY27, revenue from operation stood at approximately 1438 crore, compared with 419 crore in H1 of FY26, representing a growth of around 243%. The substantial improvement reflects a higher operating volume and improved utilization of our manufacturing capacity. On EBITDA performance, our EBITDA for Q2 FY27 was approximately 114 crore, translating into EBITDA margin of around 14.03%. In comparison, the company had reported a negative operating profitability in the corresponding quarter of the previous year. For H1 FY27, EBITDA is stood at approximately 261 crore, with an EBITDA margin of approximately 18.2%. While the H1 margin remains healthy, the moderation in Q2 EBITDA margin compared with the first quarter is due to increase in the raw material prices during the quarter of the month, which went up by 25-30%. Our focus remains on improving product mix, raw material deficiency, capacity utilization, and operating leverage. Let me come to the profitability sense. The profit before tax for Q2 FY27 stood at approximately 47 crore compared with a loss before tax of 49 crore in the Q2 FY26. This is a significant turnaround in profitability. Profit after tax for Q2 FY27 was approximately 35 crore compared with loss of approximately 38 crore in the corresponding period last year. For H1 FY27, PAT stood at approximately 94 crore compared with a loss of approximately 33 crore in H1 of FY26. The turnover profitability demonstrates the operating leverage available in our business as capacity utilization improves. On the cost structure front, we continue to focus strongly on the raw material efficiency and cost optimization. Finance cost for FY, finance cost for H1 FY27 was approximately 87 crore compared with the 76 crore in H1 FY26. The increase in the embryon function of funding structure with the scale of operations. The appreciation and importation for H1 stood at Approximately 49 crore. As our assets become increasingly productive, our focus is on ensuring that incremental revenues translate into a stronger cash generation and return on capital. One of the important areas for us is the cash generation. During H1 F527, the company generated approximately 192 crore of cash flow from operating activities. This is a positive indicator of underlying operating strength of the business. At the same time, we invested approximately 180 crore in the capex, including property, plant, equipment, and CWIP. The investment is aligned with our strategy of strengthening and expanding our operating platform. Coming to the balance sheet, as of 30 September 26, our total equity stood up 1687 crore compared with 1578 crore during March 26. Our debt equity ratio is approximately 0.55 times which continues to provide a reasonable capital structure for the scale of our operation. Importantly, we have also seen a meaningful reduction in certain working capital items. Inventory reduced from a maximum of approximately 528 crore in March 26 to 206 crore in September 26. Trade disabled also reduced from approximately 406 crore to 367 crore. These movements are positive from a working capital perspective and remain an important focus area for the management. During the first half, we continued to balance growth investment with financial discipline. We generated strong operating cash flows while continuing to invest in our capacity and operating infrastructure. Our objective is to progressively improve cash conversion, reduce working capital intensity, and optimize our borrowing profile. Looking ahead, We remain cautiously optimistic about the second half of FY27. The fundamentals of the bioenergy and ethanol sector remain attractive, supported by India's energy transition priorities, ethanol blending initiatives, and increasing emphasis on domestic renewable fuels. Our immediate priorities are improved capacity utilization, optimized feedstock and product mix, improved EBITDA margin, strength operating cash flows, reduce working capital requirements, and maintain disciplined capital allocation. We believe that our significant turnaround achieved in S1-27 provides a strong foundation for the next phase of the growth. To conclude, Q2FI27 has been a quarter of a strong revenue growth, a clear turnaround in the profitability, and healthy operating cash emissions. We are concerned that the next phase is not only about growing revenue, but also converting the growth into sustainable EBITDA, stronger cash flows, and improved return on capital. The management remains focused on profitable growth and is strengthening the balance sheet, while continuing to build to work into a stronger and more diversified bioenergy platform. With that, I would like to thank all our shareholders, lenders, business partners, and employees for their continued confidence and support. I will now hand over the call for the question and answer session. Thank you.

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 their touch-toe 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 Sukhri D. Patil from iSight, Printrade Private Limited. Please go ahead.

Good morning to the team. I have two questions. My first question to Mr. Neerani is, following the massive 243% revenue surge in H1, Just want to understand what forward volume guidance can you share for the next two quarters? As we build out the Shrikakulam SAS plant using the 150 crore PMG1 grant, what major execution risk could delay commercial production? And what is our forward strategy to secure long-term feedstock? Just want to understand your plan of action on this. That's my first question. I'll ask my second question after this.

Yeah, sure. Thank you for that, sir. With regards to the expected volume that we plan to supply for the current quarter, we, like I said, we had an offer for almost a location for about 24.5 flows from the OMCs. And in addition to that, we got about 15 flow liters added for the last ethanol supply year. So, in the current quarter of that last year's allocation, ethanol supply year runs from November to October, and half of this quarter, that is October and November, will be supplying, and there is an extension already received. So, two months of this current quarter, we will be supplying from the last ethanol supply year only. So, we already have about 8.5 klo-litres of orders is still left to be supplied for the month of October and for the month of November, and we have the required raw material as well as the allocation to supply that. In addition to that, for the new ethanol supply here, we expect an allocation of at least about 40 to 42 crore litres. That's the expectation. Of course, we'll have to see when we apply for the bids, and once the allocations are done, we will get to know The absolute picture, but for the current quarter, I can tell you that we have in hand about 8.5 crores to supply, and there will be further addition that we will get.

Thank you. My second question to Mr. Chishore is, along the similar lines, with quarter two revenue hitting a record 811 crores, which is very good, what is our forward capex and debt guidance for the next quarter? As we simultaneously scale our multi-location TBC project with Yale and Sumitomo, what risks do you foresee to our working capital cycle? And what forward financial controls are in place to protect our cash flow? Just want to understand your point of view on this. Thank you.

Yeah, thank you, sir. So, your first question was on line of the capex to be planned for the upcoming hotel. So we have already, there will be no capex involved from the 1G threshold point of run. The capacity will remain same. The major capex will flow to work the CBG. This CBG plant, we are expecting to commence in the next quarter close to 3-4 add-on plants for this capex will be starting growing, at least 4-5 plants, which will have a project cost of around 60 crore per plant. So that was down to 300 crore, and of which we are expecting this debt to be raised to the extent of additional 70 to 80 crore as a primary branch of the first disbursement on the terminal side of outstanding, along with the JV partner with the JV. That is the first question replied. Can you please come back to the second question?

Yes, the second question was, as we simultaneously scale our multi-location GBG project, what risks do you foresee to the working capital cycle, and what forward financial controls are in place?

Yes, sir. So, because the entire expansion is on the GBG front, so working capital, there is a hardier requirement for a GBG plant in working capital. The working capital is not going to impact much because a major working capital with these plants will either run through the press mud or spent wash, or the CBG plant. The press mud costs you hardly anything. That is where this CBG business crux margin line is the EBITDA margin of around 60 to 70%. So in our existing plant also, we have a hard working capital of 10 TBD plants with 2.5, 2.6 carol. So, even if it works out to be a 150 plant by the end of the financial year, I assume there will be a maximum requirement of working capital which can rise is 25 to 30 crores, against which you will be generating a better revenue against these working capital. So, the working capital will never be a challenge from that point of view. As far as the risk mitigation is concerned, as I was touching. So, the overall side, the risk mitigation will be taken care by these CBG plans only because compared to CAPEX, the return in this business is very high, which we have proved in our last seven to eight previous quarters also. And going forward, the same time term will be maintained with the minimal working capital requirement, which we are doing here, and also the debt amount of 80 to 100 kW, which will be again subdued by way of interest prevention, which will be capital subsidy, which will be receiving from under the government scheme. So today, for all the plans, we are eligible for the capital subsidy of close to 2 crore per TBD. So this will be directly reducing the term debt of the company, and we are right now eligible for 25% of these capital subsidies based on our consent to operate license. So all those things will be entirely subdued by way of a capital submission and the profit to be generated from this business. Thank you.

Thank you, and best wishes.

Thank you.

Thank you. Next question is from the line of Dusha from Sapphire Capital. Please go ahead.

Hello. Hello. Am I audible, sir?

You are audible, ma'am.

Yes, thank you so much, sir, for this opportunity. A couple of questions, sir. Firstly, what is the ethanol volume this quarter?

For the current, ma'am, like I said, go on, sir.

So, for this quarter, you want to say for H1, FY27, we have sold the total volume of ethanol. What we have sold is close to Q1, we have sold 8.29 crore, and Q2, we have sold 10.79 crore. So, for the entire H1, we have sold 19.07 crore litres of ethanol. And again, for this, we have, what Sarva is saying, we have already spending orders to the service close to 8.5 crore litres, other than the fresh allocation which we are about to receive.

Right, right, right. Okay, fair enough. So, also just wanted to, so you mentioned that we are seeing a lot of raw material pressure, right? But going forward, because the government is banning the use of sugarcane juice, won't we be able to pass on this cost in terms of higher prices as well? Just wanted to understand how our contracts are shipped. So, is there any way for us to pass on this increase in raw material and protect our margin?

So even though, even though you say the ban is done, let me come to the point where sugar prices in the market is 50 rupees, 48 rupees or 52 rupees. Did it be any sugar player, even though for them also, even though it is not would have been banned, they would have preferred to sell it outside of our sugar rather than diverting it to the industry because the profit margin will be, they will be getting a mighty better ban right there, right? So as far as for us to make a rise on the cost benefit and more margin is to use a better product mix and a higher of the capacity utilization. So we have a plan where we are trying to store these mazes and rice at the lowest of its price and accumulating at the various locations by storing a concept and storing it at a proper place. So that even though during this quarter, if it goes at the peak of the price, we will be able to maintain the maximum beta margin at least 2 seconds at the present level what we are maintaining.

So this margin that we've done for ethanol this quarter is going to be the base? It should only increase up from here on?

It will increase from here on. Usually, Q2 is the most difficult period because that's when summer is over and there's not much of raw material agrarian products available. So, whatever, the Q2, whenever each of the years will have the lowest margins. It should improve from Q3, Q4 onwards.

So, sir, on an average for this year, what sort of margin should we expect for the ethanol business?

I'm not going to be able to give you an absolute number, but once the tenders are located, we might expect maybe a 1 or 2% drop in the EBITDA margins of the average that we've been doing so far.

Okay, okay. And, sir, on the CBG side, I just wanted to understand the other two plants that are going to be commissioned by the end of Q3. Are they on tap? And for this year, I think, and for this quarter, I think, you were, last year, we received some subsidy. So, what was the amount that quarter, and what was the subsidy amount that you were supposed to receive for this quarter?

Anansi, you want to take that?

So, subsidy amount on the CBG front, we are commencing three plants of true oil, swimming gas, private, LinkedIn, in JV with Assume Tomo. So, these three plants will accrue around 60, these three plants constitute 180 acres of carbon. So, the subsidy eligible is 2 crore per TPD. So, 60 into 2 workshows to 120 crore. Right. So, after 120 crore, we are right now eligible for 20 to 25 crore of subsidy out of this based on our consent to operate license. So, for the quarter, or even say, bare max of a time and off for the next quarter, first or second month by first, we are definitely getting, expecting a 25 to 30, 25% of the UK. 120 government, you can work out to close to 30% of the subsidy, we are expecting by December.

Okay, also the one plant with SM, we see that we have commissioned, CBG, 20 TPD, how is the ramp-up of that going, what sort of utilization are we targeting for this year? And for the other two, I will be commencing. What sort of utilization should we look at for this year?

So, that will add to the, so you can say, if it is, if it is, if it is, if it is, if it will add the full-fled revenue from the month of January, so that will add a one quarter of revenue. So, one quarter of revenue, presently, if you will see our existing plants, that comes around the 10 crore. So, even though it works out to 10 crore, one quarter, so it will add a minimum revenue of 10 to 15 crore, existing one plant, and adding also another two plants for the part Today, we will add another revenue of 10 crores, because that is also picking up. So, we believe that 20 crores of CBG segmental revenue will come from these 2 to 3 plants during the financial year, coming to the next 2 projects.

Okay, okay. Elsa, for this 15 CR out of that 10 CR, what is the update on the rest 5 CR? When are we expecting that allocation to happen? Any sort of colour on that?

No, like I said, we have received the allocation already, no? There is a clarity on it. Okay, so this is 10-4.9. Yes, yes.

Okay, okay, okay. Fair enough, fair enough. That will be it from my side. Thank you.

Thank you, ma'am.

Thank you. Next question is from the line of Prathamesh Savan from Abacus Investment Managers. Please go ahead.

Yeah, hi. Hi Vijay, sir. Good afternoon. So, just two small questions for my answer. So, in the current quarter, do we have built up for any inventory for the Q3 orders that we have? So, is there any raw material inventory built up in Q2?

Yes, sir. Thank you for the question. We do, we have a visibility already. So, for that 8.5 kNl, we already have the required raw material tied up. And because the raw material was purchased during Q2 and the order also was received only in the month of August, the cost of the raw material was at a higher side. So, the margin will be a little lower, but we already have the visibility on the raw material, that the raw material is tied up.

Okay. So, the effective Q2 margin should be slightly upwards of 12% because that has some element of the raw material prices also into this.

You mean in Q2, sir?

No, no. In Q2 margins, we have some raw material.

Q2, we had the impact of definitely the increase in the price of raw material picked up by 25% close to in the terms of measures. Although this was a muted season for the industry also because there is a hardly a supply of the raw material during the quarter. Again, Q3 and Q4 is a seasonal business where this again the EBITDA margin will bounce back to when it is sort of in the level.

Oh, okay. And so, volume-wise, we can go north of the current Q2 quarter because we already have like 8 crore commitments plus, you know, probably the next personal suppliers, 40 crore, also some elements should become in the November or December end. So, can we see volume uprise on the current quarter numbers as well over here?

Yes, sir. We expect that. Since we already have 8.5 crore litres of water, we expect at least about 6 to 7 crore litres of additional volume. That's in the month of November. We will have November and December alone, right, for the current quarter. So we expect a few more crore litres to get added, but that will depend based on the location that we receive. There will be a growth, is the expectation.

Okay, okay. And lastly, we are on the El Nino front. So, we have been hearing that the southern part of the country will be affected with the El Nino more. So, where is our raw material procurement coming from? And do you see any risk built into this where, you know, the prices of raw materials stay elevated for the next entire financial year?

Yes, sir. So, there is a huge drop in the acreage of cultivation of major food crops, that is maize, rice, as well as sugarcane, which is why you've been seeing there's a big rally in the prices of all these commodities. The year next, there is an expected drop of about 35% in maize availability, and rice, there's an expected drop of about 10% to 12%, and sugarcane, there's a drop of about 10% to 12% again. So that will squeeze the margins a little because the price of raw material will increase. That's it. Thanks to the support of all you shareholders, we could convert three of our plants into grain-based, which can take multiple feedstock and also have the working capital limits now. We will be sourcing raw material from across the country. That's Bihar or Madhya Pradesh is a big place. Punjab is a big place for us to procure raw material. We've already started looking for sourcing warehouses and stocking up the raw material required.

Okay. Thank you, sir.

Thank you. Next question is from the line of Udit Sehgal from Pinpoint X Capital. Please go ahead.

Yeah, good afternoon, sir, and congratulations for a good result. So, firstly, I wanted to know there have been some notifications regarding the pledging of shares and the intent of the promoters to increase the stay. Okay. So, what exactly is the intent and till what percentage are we planning to add?

So, legally, we are allowed to go up to 75%, sir. The idea was to try and infuse it our holding as much as possible, but we are almost at about 71.6% now, and we have a margin of about another 3.5% to 4%. So, we hope eventually we keep continuing to build the holding.

So, the current pledges where the notifications have come, they have been used for the past purchases or they are going to be used for the future purchases?

For the future purchases.

Got it. Secondly, sir, on the CBG front, could you like kind of educate us on what the changes have been from the previous policy, How the margins or the subsidy has gone up? Because we saw in the private market, like, companies like Gruner, they are getting, like, a valuation of, say, $5 billion, you know, and they're building out 1,000 TPD. So, what exactly are we planning to do? Like, what are our plans for the midterm and, you know, long term, since the government has given such a big push into CBG?

Yes. So, CBG is going to be a big growth opportunity for the entire country. So, the new policy, that's Gobardhan 2.0, there's been a huge amount of changes that have already come in. To name a few, one, the capital incentives or the subsidy that is available per metric ton. Earlier, there was a cap of about 10 crores per project, and the subsidy was somewhere about, for a 10 TPD plant, it used to be at about 8 to 10 crores. Now, the subsidies increased from 1 crore per ton to almost 2 crores per ton. And it's doubled. And there's a cap of about 30 crores per plant. Not per company, per plant. So let's say for a 10 crores plant now, instead of having a 10 crores subsidy as earlier, now we'll have 20 crores of capital subsidy. Along with that, the price of gas is now assured for another 10 years. There is an assurance of takes. There is a take-or-pay clause already that's coming, which is favourable to the principal. So 90% of whatever we produce, there is a condition that the OMCs will have to buy. And for the obligation on the supplier that is us, we will have at least 50% should be offered. So which is a very good thing that has come in. Along with that, the price of the gas has also increased from 84 rupees a kilo to now it has gone up to about 104 rupees a kilo. And also, if the purity is higher, we can get a price of as high as about 116 to 120 rupees a year also. And along with that, there are sectors classified as a priority sector now. For MSMEs, there is the government guarantee for loans and things like those. So, overall, there is a huge push for the CBG sector and we hope to take as much as benefits that we can.

So, do we plan to, I think our initial build-out is for some plants with Gale and Somi Tomo. I think it totals up to almost 250 TPT, if I'm not wrong. Yes, in the entirety, it would be. Okay, so any plans to go further on that? Like, we see there's so much scope, and I mean, from our calculations, I think in the next three to four years, Maybe the country may be requiring almost a lack of TPT. So, I mean, what would be our plans? What kind of market share could we get?

Yeah. So, right now, we have visibility on these 250 metric tons. Beyond that, of course, we have expectation to keep building. But 250 is almost about 20, 24 plants, right? There is still a lot of work to do. And we have only now commissioned about four plants. And the plants will begin construction. So, over two years, we will see a lot of investments in it.

And, sir, on the ethanol front, I'm a bit confused with the government policy. Say, they will not get ethanol from, or, I mean, there's a shortage of sugar. So, they didn't want the sugar to be diverted to ethanol. So, logically, shouldn't have they given more incentives for the maize producers to give more volumes?

We should have definitely done that considering the prices that have increased. They should have increased the price of maize-based ethanol, but in fact, they've reduced the price by almost 3 rupees a litre. We don't see the logic in it, but it is what it is now.

So, will they be able to still get the full application? I mean, wouldn't the maize ethanol producers be protested about it or whatever, I mean, looking at the scenario?

We've already, the industry has already raised concerns on the same subject, and we have reached out to the policymakers and the oil marketing companies. We hope that there is some kind of a revision in the prices. I am not sure as of now what people are thinking, but we expect that there could be some correction.

Okay, sir. Thank you so much and best of luck. Thank you, sir.

Thank you. Next question is from the line of Bhavya Gandhi from Bajaj Alternate Investments. Please go ahead.

Yeah, hi. Thanks for the opportunity. So, my first question is regarding the ethanol. What is the realization currently? And I just wanted to understand because we went into beautiful grain-based raw material procurement so that we don't see this kind of RM fluctuation, right? That was the thought process. But in the current quarter, we've seen Rs.18 rising to Rs.25. So at least if you can give a flavor on the RM, how will it pan over the years? If you can give a broader perspective, that's really important.

Yes. So, the whole objective of becoming dual feed is that to have the flexibility of different kinds of feedstocks. And we know that in different years, there will be different availability on the raw material side. So, one, achieving flexibility, we've already seen that. And also, if you look at historic cycles, there has always been a drought-like situation once in every five years. And we see the impact now for the El Nino. And the current year, there is a shortage in the availability of raw materials that I just explained earlier also. But going forward, that should correct itself, and we will come back to normalcy. But in years like these, we expect better prices so that our margins can improve. That's the expectation from the government. But otherwise, from the company and from the management side, what we expect to do is stock up raw material at the available cheapest price, so that further crunch in the raw material, or rather the cost of production is streamlined to the best effect.

Gaudat, sir, what could be the average realization for ethanol combined and for maize combined in your experience? What could be the average realization? And similarly, on the raw material side, both the key raw materials, blended average realization, just to understand what would be the ebitda per kg or per liter fluctuation, just to get that understanding. All right.

So if I were to take a guess, of course, this is subject to the allocation, but if I were to take a guess, the average realization this year, let's say maize-based ethanol is at around 68-odd rupees a liter, and also there's a ban on sugarcane juice and BFB molasses. So, ethanol derived from damage for grains is at about 64 rupees, and from FCA rice is about 60 rupees. So, I expect an average blended rate of about 64 to 65 rupees from the past year, which was at about 67 rupees. That's about a dip of 3 rupees a litre. However, the price of DDGS, which is a by-product of grain-based ethanol, has increased. And we are looking at an average price of about 20 to 30 rupees in the past month, and we expect the prices to continue to be higher going forward.

So what would be the RM basket total cost per kg, or at least if you can provide that, because there are a lot of variables. So in your experience, not to hold you for that, but at least an average, and going forward also, what could be your expectation?

Right, sir. In the past, we were hovering at around 62% to 66%. Somewhere between that was the RM contribution. But going forward, I may not be able to give you the right thing, but it will be sub-70% is what we expect.

And that would be the peak levels, right? You don't expect it to go beyond that?

We hope for that, sir. Again, it depends on the availability, but also considering the cost of carry and all of this should be somewhere around that number.

Sir, my second question is regarding how do we intend to reach the pledge amount? What are the sources of funds that we have in personal capacity? Yeah, please, if you can just explain that as well.

I know that's, it's irrelevant for the company right now, but as management, we've got different sources of capital, so it's irrelevant for now.

Okay, that is not an issue, right? And what is the haircut price, if at all, that you would have raised the money at?

It's a personal loan that I've taken, but that shouldn't bother or shouldn't affect the company by any means.

Fair enough, sir. And just on the CBG part, sir, just wanted to understand, currently you are doing 20 crore revenue per quarter, that is closer to 80 crore revenue per annum for 10 TPD, right? So, for 20 TPD at full utilization, can we expect like 150 to 160 crores at 84 rupees, assuming that 84 rupees holds true?

No, correction there. We are doing an average of about 40-45 crores of turnover from a 20-3 plan. That's almost about 4-4.5 crores of revenue per ton. Expect a similar price, I mean, revenue to continue, because earlier there used to be something called as a market development and assistance. That's a subsidy on the manual that we used to sell. That has been discontinued now. And instead of that, the government is now giving a higher price for the gas. That's from 84 to 104 or 115, depending on the purity. So that should average out your revenue cycles, and the revenue per ton should continue to be at somewhere around 4 to 5 crores, let's say 4.5 crores per ton.

Fair enough. So that would be closer to 80 crores of top line on full maturity, I mean on full utilization? from one 20 TPD plant, yeah, and 60% is the realistic EBITDA.

No, no, correction there again, sir, we will have, for a 20 TPD plant, we should get somewhere about 80 crores, so we have three plants being commissioned now.

Right, 80 to 40 odd crores, right?

Yeah.

Yeah, yeah, so, and the 60% is the realistic EBITDA one should work with, that, broadly. Okay.

So, that's the track record that we've had so far, but you can keep it somewhere around 50-55% is what we are expecting.

Okay. Fair enough. And at 104, what could be the EBITDA levels, at least if you can provide on the 104 realization?

It will be almost at the same level, sir, because as I said, MDA is discontinued and the gas prices increase. So, this will offset the benefit from the MDA and you can maintain the plat margin and EBITDA margin almost at the same level.

Thank you for the opportunity.

How many days of maze inventory did we have as on March 26th and going forward, However, do we see our margins going down as till now we would have been able to manage the margins in H1 due to lower price maize and vintage property or rental capital.

So what is your question sir, how many days?

How many days of maize and vintage did we have in March 26th?

Okay, so as on March 26th it is available sir, as on September 26th. So, as of March, if you will see, as of March, my inventory level was outstanding around 500 odd crore, and today, if you will see, it is around 230 to 240 crore. That is the inventory level we have in the books as compared to March and September. This inventory will be out of the book once this, you can say, the season is starting. We have already existing 8.5 crore litre of orders in hand right now. So, this order and with the additional order coming up, this existing inventory level of close to as on September 26, which is around 380-90 crore of levels. So, that will be immediately, that will immediately go convert to sales. And then again, this will be a further additional inventory will be filed up based on the, it's not a location which will be allocated during the year.

Okay. And as on March 26, I believe we must have inventories of sugar and maize both. And going forward, we will only have inventory of maize, right?

Yeah, we will have inventory of maize only going forward because this is, you see our previous call.

Yes sir. We'll have inventory of maize as well as rice, the maize food rice.

Yes, maize and rice, because sugar is now not there, so maize and rice should be the only inventory.

Okay, okay, thank you. And recently I've heard that realization in maize-based feedstock has decreased to approximately 68 rupees from 70 even 70 rupees. So is it right or is there something else in it?

Sorry, I didn't hear that.

What is the realization from May's Bay's fish talk this year?

That's based on the location, but out of the 8.5 crores that's pending, we still have around 4.5 crores to be supplied for the current quarter. The past orders already. But only when we have the location for the next year, we will be able to share.

Okay, thank you. That's it for myself.

Thank you. Next question is from the line of Satyam Chaudhary, individual investor. Please go ahead. Hello, I'm an audible, sir. You are audible, sir.

Yeah, so my question is regarding, if you can provide me with the gross margin, specifically for ethanol segment, average gross margin to around the area, what we can expect.

So you are asking for the upcoming period? Yes, for upcoming period. Okay. So, as we were telling, this will also, what our MD was saying, this will solely depend upon the kind of allocation which we will be getting, which what we are expecting is 45 kN based on the allocation. But presently, whatever the gross margin is on the business side is there, actually, it will be somewhat plus only, not better. I cannot tell you the precise number at least, sir, because I have only 8.5 kroner of order to be supplied. Once this ESY is over, then we will be in a better situation to reply your answer to the question.

Any range if you can go over in order for regular numbers?

Sir, we are not supposed to comment on these numbers, but

right

now my present gross margin is close to 37%, so you can do some plus-minus what can be tuner2, but present my GPM is 37%.

Okay, thank you. Great, sir. Other questions regarding like, are we looking to expand ourselves into DDGS byproducts?

Sir, there is no need to stand there because we are already getting a substantial income from the DDGS at least, which is marketed is priced at 26-27 rupees per kg. So, that is already additional income generating as a byproduct when we are using the maize-based food stock as for the production of ethanol. So that will, that is a good amount of a contribution in the top line as well as the bottom line because you did not, in terms of bottom line, you did not incur any additional cost or overhead expenses there. That is a byproduct income.

Okay, sir. And the other question I have is like, as we have 65% of dual feed capacity, the remaining capacity which we have is basically for sugar basis. So, how are we looking to get capacity to grow over that 35%?

Yes. So, balance, 3800 k LPD is already dual feeder. And if you will see one of the plant, which is again a 400 k LPD plant, where again, the C molasses are not banned. Only B molasses and syrup is banned. So, we are dedicating one plant completely for the utilization of the sea-based molasses also, other than we have the option to convert, we have the option to use it as a other feeder also. So, based on our present capacity, we are expecting a sufficient location to optimize this plant as a maximum capacity utilization, which is presented during the quarter, it was 62% and during the next one also it was around 64-65%. So, capacity utilization will It will not be a challenge.

Okay, sir. Getting it, getting it. Thank you. And last question, sir, is regarding, like, if you can tell me, ENA realisation, like we are telling for ENA also, about realisation for ENA particularly?

So, ENA... I'll get it, please.

There is a good increase in the price of ENA already. We are looking at prices for long contracts at about 62 to 63 rupees a litre. Cost of producing ENA is almost cheaper by one and a half to two rupees a liter. So it makes more sense to make ENA. Like Anand was mentioning, our other two units, at least of that 400 KFPD, we propose to run it on ENA for the whole year using the sea-heavy molasses. So that's the expectation. Whatever, if there's an increase in the price of ethanol based from sea-heavy molasses, then we convert that into ethanol. Otherwise, we continue making it, converting that into ENA.

Okay, so on the ENA front, can we look at the sustainable demand in India in coming years?

Yes, sir. So there is a gross consumption of almost about 280 microliters of portable alcohol each year. So, and there is a compounded growth of almost about 3% year on year. Of course, the last one year there was lesser growth, but the volumes will be available and us having long relationships with most of these portable alcohol manufacturers of the Indian mid-foreign liquor companies, we will continue to harvest these relationships and supply more volumes to them at decent prices.

Okay, sir. Thank you, sir. Thank you. Thank you. This was all from my side.

Thank you. Next question is from the line of Jayashukla, an individual investor. Please go ahead.

So, sir, thank you for the opportunity. Sir, my first question was regarding, by way of selling our badami plant, which is Unit 5, we intend to recover approximately 170 crores from the slum sale. So, my question was, how do we plan to, you know, deploy these funds? Will it be used for debt repayment or for other CAPEX plans which are already going on?

So, of that 170 crores, Anand Singh can elaborate. There is a current outstanding of about 130 odd crores of debt there. So, that 130 crores of debt will be repaid using 171 crores of the capital that we will receive. And the difference of about 40-40-odd crores, we will be utilizing it as working capital.

So we have one, out of 171 crore expected reduction, 125 crore close to, presently, term loan is outstanding. So 46 crore additional, we will be utilizing direct on account of sale of the plant. Additionally, we will be also able to save from this plant a good amount of expenses close to which we are incurring on annual basis, But we have a lot of interest on these terminals, then we are employing expenses. So, that will close, saving will be close to 22-22-croyd-a-fault from there also. That will be completely utilized for the rationalization and the strategic initiatives for the plant to grow, company to grow.

Okay. Got it. Got it. And Sir, what I understand we also have an upcoming plant at Badami, which will be our CBG plant. So, in that case, after selling ethanol plant, how will we plan to Sir,

this is not the only plant which is located there because the CBG requires a press mud and we have many other plant that is a sugar belt completely if you see the stretch is full of the sugar unit and there are a lot of many press muds available based on the raw material study conducted by under the TV study. So, there will be sufficient 6 to 7 acts of raw material available in the locality as a press month for the manufacturing of CBG. Plus, your existing plant also will be there to whom it will be sold. We may ask from them also to supply a press month because that is also one of the players.

Thank you. Next question is from the line of Nitin Avasti from Ingrid Capital. Please go ahead.

Hello, sir. Two questions from my side. The first one, there have been many changes in the tender, which is out from the OMC, one of which is the amount of capacity which you can bid for. There was a lot of hanky-panky happening by players, and the bid amount by players used to be not correct, and hence the OMCs this time around have come up with a very particular calculation so that it is fair across the table. One, what is your thought process? How do you see this development? Number two, based on said calculation, what is the amount for which you can wait for?

Right, sir. Thank you for that. So, we have the basis for calculation. There are a few good things that they have done in the tender and a few things that we could not comprehend better. But the good thing that they have done is they have removed the barriers on states. That is, earlier they used to have this concept called surplus state and deficit state. So the demand for the ethanol blending required for a particular state was to be met by the availability within that state. So it was an unfair ground for states like Karnataka, Maharashtra, or Bihar, where there is abundant food crops available. So they have done away with that. So now, irrespective of states, we can supply to any places. And the basis for allocation they have considered is 81 working days in a month, in a quarter. And for 81 and in a few quarters, it's 83 working days. And that multiplied by your consent to operate capacity will become your eligible volume for you to place your bids. So based on that, for us, 2V bioenergy, we have an installed capacity of about 2,000 kL a day. That into 81 into 2 and 83 days into 2 quarters. So that should give us somewhere about, I haven't done that number. You could do that number, sir.

Okay, so 2,000 kL into 81 into 4. And 83 days for 2 quarters. Okay, 83 years for two quarters, so 83 into two, and 81 into two, and that's your bid eligibility.

That's correct. That's correct.

And we expect higher allocations for this ethanol supplier. Out of about 500 ethanol plants, about 230, 220 to 30 odd plants, which are mono-based, will not be operating to capacity. So, for example, last year, syrup and B-heavy alone, there was a supply of almost about 380-odd crores of ethanol. That's almost about 30-38% of the last year's supplies. This year, that has almost become zero. So, there's a ban on it. So, allocation for dual-feed-based plants is going to increase, and a lot of plants which are mono-based will not be put to use. So, that should give us better opportunity to operate also.

I just did the calculation, sir. Back-of-the-hand calculation, that means you can bid for about 66 crore-liters.

Correct, sir.

The second question which I had was about the pricing of market-driven ethanol products. Two prices during the call you have mentioned. One is your GDGAS prices are hovering at 28 to 30 rupees. One more price was your C-based ENA, C-molassus-based ENA, which you said 63 rupees. Two more prices, I wish to understand from you, how is the market seeing this and what are the trends in them. One is the grain-based ENA, and one is the industrial alcohol for chemically purpose.

Right, sir. So, usually the price of ENA, so there's not much of a difference between grain or molasses-based. Of course, it depends on the premium of the plant and the consumption pattern for the portable alcohol manufacturers, but they're very cost-conscious in the end, right? So, a lot of people, irrespective of whether it's sourced from maize or grain or the thing, the priority is on price. But post that, for certain companies like Diageo and certain large companies, also have preference on the base of ENA. But the key driver would always be the price. So for us, we expect a better price of ENA for the current year because prices of raw material, that's syrup and B-heavy, will not be diverted because the sugar prices have gone up really high. So, it's about 45-48 rupees of price of sugar right now. So, it doesn't make any sense to divert B-heavy or sugarcane juice even for that for ENA. So, there's a huge chunk of capacity that won't be participating in the supply of alcohol. So, that leaves us opportunity for the green-based plants. So, considering the demand of 1,100 crore-litres in the current tender for OMCs and about 280 crore-litres of average portable alcohol consumption, we will have more, I mean, there is a crunch in the capacity available. So, prices of E&A should improve.

Okay, so I could rather see this as a true price increase rather than differentiate between different routes.

For industrial alcohol, similar backing? For industrial alcohol, again, the price of international ethanol also, earlier there used to be a lot of RS imports that used to happen, but now the price of RS has already reached about, if my memory serves me right, it's at about 58 to 60 rupees a litre. Earlier, that used to be at around 47 to 48 rupees a litre landed into the country. So, considering the jump in price, of course, there are different reasons for it. We see that there's a lot more opportunity for the Indian ethereal manufacturers to cater to this industrial alcohol demand.

Understood. So, and similar figure, if you could provide the demand for this in India, like you said, for alcohol, it's about 280 to 300.

For the capital industry, it's about 250 to 300 krolitres is the demand right now, and we expect that at least about 40 to 50% of it, I'm saying with confidence, would be catered by the Indian manufacturers. Understood.

So, is that understanding correct that these three things weaving in together is pushing up the price of ELA? That's correct, sir. Understood. Thank you, sir.

Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to Mr. Vijayanirani for his closing comments. Over to you, sir.

Thank you so much, ma'am. I thank all our shareholders for the trust and the faith that you've placed in us and the true world. We will continue to make all efforts to bring value to all of you. Of course, we are in agro-based industry. There will be challenges, but the support and the confidence that you have shown in us, we will continue to make all efforts to keep building value to all of you. I thank you all for joining in for the call today, and thank you for the support.

Thank you very much. On behalf of True Walls, Bio, and Ajil Limited, that concludes this conference. Thank you all for joining us today, and you may now just connect your lines.