BCL Industries Limited (524332) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to BCL Industries Earnings Call for Q2 FY '25 Conference Call hosted by InCred Equities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Nitin Awasthi from InCred Equities. Thank you, and over to you, sir.

Thank you, Joshua. We thank the management of BCL Industries for giving us this opportunity to host their call today. From the management, we have Mr. Kushal Mittal, Joint Managing Director, along with their IR team represented by Priya Sen of Go India Advisors. I now hand over the floor to Kushal ji, for his opening remarks. Over to you, sir.

Thank you, Nitin. Welcome, everyone, to the Q2 and H1 FY '25 Earnings Call for BCL Industries Limited. The financial statements and the investor presentation have been made available on the exchange and that everyone has [indiscernible]. With over 4 decades in grain processing, BCL Industries have become a leading producer of grain-based ethanol and ENA in the country. The strategic decision to diversify into Distillery segment leveraging expertise in grain processing has shown positive growth. Currently, BCL operates 2 ancillaries located at Bathinda and Punjab, and [indiscernible] with a capacity of 100 KLPD. I am pleased to announce that we recently added 100 KLPD capacity at Svaksha Distillery has reached full utilization and operations are running as planned. As part of the expansion strategy, BCL has recently acquired Goyal Distillery Private Limited, which is located in Fatehabad, Haryana. It progresses the necessary land and permissions for establishing 250 KLPD drain plate in all units. Goyal Distillery is now a whole subsidiary of BCL Industries Limited. This acquisition will enable the company to set up additional 250 KLPD ethanol plant, along with the power plant that will use as its primary fuel source with land and permissions already in place, this plant can be commissioned in nearly half the [useful] time. This move is expected to significantly strengthen BCL's position as a leader in the green base, a small manufacturing sector in India. The 250 KLPD ethanol, the company would like to set up a biogas plant with a capacity of 20 metric tons per day on the newly acquired 9-acre plot near its the [indiscernible] unit. With approximately 250 metric tons of paddy is probably [indiscernible] daily, its initiative reinforced BCL's commitment to green energy solutions. Additionally, a new 150 KLPD unit is expected to come up in the coming times in merchendise, bringing our total capacity to 850 KLPD. The focus on using these has a primary feedstock for ethanol production and paddy straw as [indiscernible] in terms of operational efficiency and sustainability. Aligned to the government of India's focus on green energy, BCL is also establishing a 75 KLPD biodiesel plant in Bathinda where [indiscernible] KLPD biodiesel unit in Bathinda is going on at full swing, which was completed -- which facilitate complete vertical integration and increasing value addition in ethanol production. Maize oil will be the main raw material for ethanol. BCL's Country Liquor brand has shown robust demand with [indiscernible] boxes sold in the first half of '25, a trend that is expected to continue. In the edible oil segment, despite market volatility, BCL's stable performance and the save exit from this business is progressing as planned. This move allows the company to focus on high-end segments ensuring strong returns. Additionally, the existing real estate inventory has been gradually sold off with proceeds directly towards the better production. Moving on to the financial performance for Q2 and H1. The company has shown strong performance across the board from -- BCL has delivered a strong result with total revenue touching at INR 748 crores, margin of 55% year-on-year increase, while EBITDA stood at INR 57 crores with an 8% margin, up 16% year-on-year. PAT came at around INR 30 crores, up from INR 20 crores into -- of the previous financial year, reflecting a growth of 30% and a margin of 4%. The [indiscernible] segment demonstrated modest growth with ethanol volumes growing by 73% to INR 50,914 KL. Revenues from the ethanol extraction reached INR 362 crores, a remarkable 95% increase year-on-year. Distillery segment EBITDA touched at INR 52 crores, a 15% increase over the year-on-year. This now concludes my presentation. We'll now do any questions or answers -- any questions?

[Operator Instructions] The first question is from the line of [indiscernible] from Finterest Capital.

So I had a couple of questions, starting with, what is the status and the projected completion of the 750 KLPD biodiesel plant?

So we see the plant to be competing in April or May off next calendar year.

Okay. And what strategy does the company have to address the challenges that is posed by rising maize prices?

See, when a company [indiscernible] solutions to problems. So one of the things that, in this quarter, would definitely differentiate us from our peers for quarter 2 I'm taking about is that Punjab has a [indiscernible] very few buyers usually. We have our own buyers in place. We were the only ethanol-based buyer for this maize in market, and we are at very competitive rates. So that has kept us. We have a lot of sellers and traders, and we've had a very long relationship of 4 decades working with some of those. And that plays to our benefit also. So it's always innovating seeing where the crop is coming and planning accordingly.

Got it. And do you -- like do we have any initiatives that are in place to improve margins in the Distillery segment?

See, margins currently as a stand-alone ethanol business, we don't foresee a great increase from the current numbers of things. But the addition of biodiesel will definitely help our margins because that's complete vertical integrating and provide a great value addition which will help and cease the overall margins of the business.

Okay. So -- and how will BCL exit from the edible oil business affected position financially?

I'm sorry. Your vioce was cutting.

Yes. Am I audible? Hello. Am I audible?

Yes, now you are.

Yes. So I was asking, how will our exit from the edible oil business affect our financial position?

How will our exit?

From the edible oil business affect our financial position?

Yes, of course, the revenue will decrease quite significantly. But the overall profitability of the company, we don't expect that to decrease significantly because since edible oil business is a low-margin business. So -- as with the addition of biodiesel, we are hoping that our profitability doesn't come down. But yes, it will have an impact in our revenue numbers, of course.

And what portion of actual ethanol production is the company able to sell? As in -- additionally, what is the portion that we are also using for captive consumption?

No, no ethanol [indiscernible] anything for capital consumption. It's all being sold to the OMCs and the ENA is being sold to the bottlers and some is being consumed by us for our own bottling purposes.

The next question is from the line of Narendra from RoboCapital.

Congratulations on a good set of numbers. So my first question is regarding our oil business, right? So where are we in the stage of liquidating that business as to how much of inventory is left? And by when can we see the revenue stopping from this business?

See, currently, as I speak, there hasn't been a significant decrease in operations. Yes, the oil mill is now shut. The solvent also is not operating now, but the refinery is currently being operated as per the market demand. We've seen a good demand lately with the increase in duties. So that has positively affected us and also it's being effective still So currently, we're rating that to the market demand. So we are hoping to exit out of this business by Q4 or maximum Q1 of next financial year or Q4 of -- but right now, the government very recently opened for edible oil. So that's working in our favorability.

Okay. Okay. So would it be fair to say that this year, we could see around INR 800-odd crores of revenue from edible and next year, there would be no revenue from the segment? Would that be a fair assumption?

For this year, I don't want to give any figures right now. We had a good quarter. It's -- the edible oil business is operating normally, but I don't want to give any specific numbers.

Okay. Okay. Okay. All right. So we will see revenue in Q4 from this business, right?

Right.

Okay. And second, on our Distillery operations, right? So if I'm not wrong, we had a target of around INR 1,700 crores, INR 1,800-odd crores of revenue this year. But given that you have already done about INR 1,000-odd crores in H1 from the Distillery itself, more than INR 1,000 crores, I suppose. So is it that we are giving a conservative kind of a guidance? And would it be possible to touch the INR 2,000 crore mark from the segment this year?

See, the numbers usually get higher conservative in nature. I would stick to my INR 1,800 crores figure because sometimes there's a shutdown that might be needed for any repair or overall. So I still put my INR 1,800 crores figure.

Okay. Okay. Understood. Understood, sir. And when do we expect that 150 KL plan to come in? And also this -- the new acquisition that we have done, right, so that 250 KL, when do we expect to come up?

See, the 150 KL currently, the workings are going on to finalize in order the same. We -- so that fee are expecting once the orders are placed another 12 months from thereon. So I'll get more clarity once the orders are placed. But we have to be very conservative in nature because right now no orders have been placed. We're still finalizing because we're also exploring the possibility of biogas. So we're excluding that as well along with the Distillery, so our plant has to be planned policies. So for that, planning is taking a little while. So just to be conservative and to give a time line, we are saying the financial year of '27 and '28 to one understanding which could decrease depending on when the orders are placed.

Okay. And the 250 KL brand, sir?

Yes. So I just mentioned for the 250 KLPD.

Sorry, sorry, I did not get you.

For 250 KLPD at Distillery. We're seeing key note financial year '27 to '28.

Both the -- so 150, we are waiting for the orders to be placed, and the 250 you are saying that it will be in Q1 of '28, right?

Yes. So 150 once the order is placed, which we were hoping to finalize that in the month of November. So 12 months from there on.

Okay. Okay. Understood, sir. And one last question, if I could squeeze in. So this -- if I'm right, we had some plans to enter other segments in this being energy space, right? So any update on that?

Yes. So as I mentioned, we need to setup a biogas plant, which is a bio-CNG made from ESRO. And this is a new technology. I'd say, there are few projects that have been installed. So we're talking to the companies to see who has the best technology in the market. So that would be our next step into the green energy space.

The next question is from the line of Dipesh Sancheti from Manya Finance.

Okay. My first question is regarding what is your expectation for Diwali when the government gifts you -- gifts all the ethanol companies by maintaining the same prices or by increasing the ethanol prices from maize? What is your assessment?

See, I can't speak with full conviction since this is not my place to decide. So it's really not clear if there will be a price increase or not.

Okay. Sir, the reason I asked this because a lot of sugar companies were trying to give example of maize and trying to increase their prices or to get made at par with sugar. That is the whole point which I was trying to make.

See, the price of ethanol is designed from the raw material and the price of the raw material and the recovery from the raw material. And importantly, the government has faced ethanol -- really, again, I can't make any comments on it.

Okay. Okay. What is the reason of the dip in EBITDA margin in the Distillery segment this quarter?

Yes. Yes, of course, maize prices have increased in the market and that is the primary reason.

What are the maize prices for this quarter?

There have been huge variation in them because we also procured a lot of wet maize that was quite competitive. I think the average for the quarter could be anywhere close to between INR 24 to INR 25.

Okay. And the current maize prices have, I think, come down, right, INR 23 around?

No. Currently, maize prices have increased from there on. We expect a decrease since big crop is due after Diwali in MP, Rajasthan and some part of Jharkhand.

Okay, okay. And coming onto -- what is your assessment of the impact of the Punjab government's July 2024 initiative to restrict retailers to only 1,000 cases of MFL per month on Country Liquor? What -- will it affect our operations in Punjab or in general?

I'm sorry, I'm not aware of this decision. I think [indiscernible] PML within the Punjab-made liquor. So it shouldn't impact us although this has not been [indiscernible] yes. So I'm not aware of what you're referring to, but regarding PML, it has not been changed. I think what you are mentioning relates to IMFL, we are in the business of PML. So our business is [indiscernible].

Okay. Okay. Fine. No problem. And what are the realization of ENA and ethanol from the Punjab and the Kharagpur Distillery?

It's quite similar in both the states as of now. ENA prices are hovering around between INR 71 to INR 72, and ENA prices are also -- sorry, ethanol prices are, of course, the same in both the states and even with experiencing similar prices in both the states.

What are the ENA prices if you can repeat?

It's between INR 71 to INR 72.

Okay. So almost ethanol and ENA, we are getting the same realization?

Right.

Great, great. Okay. And regarding the capacity. So basically, we are expecting about 850 KLPD of capacity with our Bhatinda plant coming up, we will have 850 KLPD by FY '26. And by FY '27, it will come to around 1,100 KLPD with hopefully, the new acquisition also coming in line. So that will take us to almost #3 player. Is that assessment right?

250 KLPD was currently giving them a time line of '27 to '28.

Okay. So even if it FY '28 -- by FY '28 also, that will take us to the #3 player, almost?

Okay.

Assuming that rest of them also do not have a major expansion?

Right.

Right. And is there any timing for the biodiesel plant also in Bhatinda?

Biodiesel, as I mentioned, we're targeting for April to go until May of next calendar year.

Okay. April or May of '25. And your biogas, bio-CNG, is it still under the R&D space or have we -- I mean got any -- I mean, what is the development on that?

See, there are few companies which have held up some projects. We're sitting with them and taking a look to see go to go on with. But yes, the technology is new. There are some challenges as we speak. But yes, it should mature in the coming times.

The next question is from the line of [indiscernible].

Yes. So my first question is like what is your projected realization from selling edible oil assets, including the brands and the land?

I'm sorry, can you repeat the question?

Yes. My question is like what is the projected realization from selling the edible oil assets, including the brands and the land?

See, I have mentioned this earlier. We don't expect any realization from selling brand. There has been a strong consolidation in the edible oil market with the market coming into 2 billion, 3 billion. So we have not taken any such figure. So land, it's tough to say at the moment, it's a valuable piece of land right in the heart of the city . So we haven't really marketed the piece of land. So once the operations are shut, we should have more clarity on that.

Okay. Okay. Got it. And like what is the estimated, if you can give any real estate value of the edible oil plant in Bhatinda?

It's tough to comment on it.

Hello. We can't hear you.

I said it's tough to comment as of today. Once the plant is shut, the [indiscernible] has been removed from the location to be easy to comment.

Okay. Okay. And like what portion of FY '24, '25 power demand will be met in-house and by external sources?

I'm sorry?

What portion of FY '24, '25 power demand will be met in-house and external sources?

See, the 3 operations are all -- our power is being produced in-house. So the only unit where we're buying power from the grid is the edible oil unit and this is down at the end of this financial year. So our power requirements moving forward will be in-house.

Okay. Got it. And just one last question. Like if you can provide any ballpark figure for the breakup of the ethanol and the ENA produced in both the plants at Svaksha and Bhatinda plants?

ENA, I think we mentioned in our presentation, let me just look at what date that is so that you can take a look. You can see that on Page 21 of the presentation.

The next question is from the line of Bala Murali Krishna from Oman Investment Advisors.

Hope I'm audible. So regarding this Goyal Distillery, so we have heard in press release that everything is in place that. We thought that it will take very less time to establish the 250 KLPD, but we are thinking about...

Your voice is not clear.

Yes. Regarding Goyal Distillery acquisition, INR 350 crores acquisition. If everything is in place, maybe we can plan at commissioning it a little bit earlier, but now we are planning in FY '28. So is it by...

I've already mentioned, it's a pretty conservative timing. It is likely to decrease, but I prefer giving a figure time line right now, which is conservative in nature and then giving you more clarity once the orders are in place. Currently, we were still planning, as I mentioned, the power plant instruments accordingly, because we're also proposing a biogas plant here, and biogas being new technology from paddy straw. We're still exploring a new to make the right decision. Hence, the conservative time line.

And just followup on the funding, how it will be funded to the internal [indiscernible] the plan for this one?

For that also currently options are being explored, and I can give you more clarity in the future.

Okay. And 150 KLPD, it will be commissioned by FY '26 Q3 one year from now on, is that correct?

I can't -- I'm sorry, can you please repeat the question?

150 KLPD, Bhatinda, so it will be one year from current month we can plant commission?

Yes. So we're hoping to place the orders very soon, and one year once the orders are play for the machinery.

Okay. And the maize price, I think as you have mentioned that it's between '24 and '25 and we are using wet maize also. During the current quarter also, you can expect the same scenario of the...

No wet maize is available in the market currency and the current prices are higher than the mentioned prices. But expecting a correction between states across the nation.

But is it possible to guide on margins? You can maintain same margins in Q3 or you can expect any [indiscernible]?

See, we don't expect the margins to increase from the previous ones -- previous quarter. We are hoping to maintain the same, but more clarity will be done once the crop has been [indiscernible] which will not due at this time. So the harvest has been delayed. So post the value crop to come in and then we'll see what effect that has on the maize.

Okay. Book to bill in this quarter, we see finance cost is decreased by INR 5 crores to INR 6 crores. So that is what impacted the bottom line? And bottom line increased. So what...

Your voice is not clear.

Yes, I think your voice is not clear since the call starting, but you want, I'll come outside. Okay. And regarding finance cost in this quarter, INR 5 crores to INR 6 crores decrease in finance cost. So that is a contributed to more of PAT level. So what is the reason for that? And going forward, we can see the same amount of finance cost?

Are you talking about decrease in the finance cost for this quarter?

Yes, INR 5 crores to INR 6 crores decrease as compared to last quarter?

Yes. So there is decrease was because we had received our interest subvention funds. So there's usually a quarter or 2 diminish once we receive them. So that's the reason for the decrease this quarter. So next quarter, again, we can expect more finance cost, right? Can you hear me? Sorry, did you have a question?

Yes. I mean, in this Q3, so the finance costs will be similar to Q1, right? This INR 5 crores or INR 6 crores decrease won't be there in Q3, right?

It depends. To receive our interest of pension funds, yes, there could be a decrease. It depends because there's usually 1 or 2 quarter delay when we receive funds and we account for the interest of pension funds upon [indiscernible]. So that is the variation.

And lastly, on the Svaksha Distillery order which we won from [indiscernible] there is INR 1,300 crores order around, but 300 KLPD could give only maybe INR 800 crores for ethanol, right? So how to fulfill the target of INR 1,300 crores?

INR 1,300 crores? About INR 13 crores.

INR 12.5 crores later, something like that.

That unit is also -- it will be used, the production of it. I mean, what I want to say that the order quantity is more as compared to the production quantity? Production -- that's what I am telling.

Is my voice -- I don't know, I'm having a lot of trouble hearing. I think is it my connection issue or?

Yes, I think the line is not clear from your side. Because we have an order of 18.25 crores liters of ethanol. So the multiple is approximately INR 71. So it is becoming INR 1,295 crores of order. So normally, from 300 KLPD, we can go up to INR 800 crores value of ethanol only.

No. I think as I mentioned, 300 KLPD is both ENA and ethanol, leave some capacity to be left for ENA production. So hence that was how the allocation was given to ethanol. Both I would [indiscernible] BCL and Svaksha have both ENA and ethanol.

The next question is from the line of Ankit [indiscernible] from RAC Ventures Family Office.

My questions with regard to more of a strategic look into the business. So I mean, if I look at the edible oil business, I mean, I know -- I understand that the plan has been to sell it for a long period of time. But now with these new duties coming in, I mean, I believe 800 or 700 of your 1,000 liter per mt per day capacity is not refining, but it's actually production. So you could see good margins and good profits from potential price increases that you might get into this business. So I wanted to understand where in the management -- what is the management thinking with regard to the divestment still? And is it -- I mean, tomorrow if this trend continues structurally, do you think you will be able to -- you might also continue to do this business and probably sell later at a better valuation than the business looks better?

See, no, we're still looking to disinvest because, one, the current improvement in business has been due to the change in duty structure. As I mentioned, the government had put duty on imported oil all of a sudden, about 20% to 25%, which was not expected and let increase, which benefited us as a company. But you've seen in the past, as per our experience, there is no consistency in the policy. So hence, we will be looking to disinvest. And also since our factory -- the city now, it's getting the pollution clearances, now see moving forward. So it's not -- this will not be sold as a business because they won't give any buyer for this factory. So it will only be scrapped. And also it's a unit that is very old. So regardless of the policy, we are looking to disinvestment.

Okay. And by when do you think that the revenue and the profit then from this business will go to absolutely 0?

By quarter 1 of financial year at the latest.

And until quarter 4, it should be running at optimum capacity?

No, we'll be moving -- decreasing slowly. Given the current market scenario, it makes sense for us to decrease it as of now because it is a good thing to be in the edible oil business after a long time.

Okay. Okay. My second question is on the raw material side. So I mean, firstly, with the movement down that is now happening in maize prices, or also maybe have rice prices come down, do you see the chances of inventory losses in the next quarter?

No. I'm not aware if rice prices have decreased. They have only increased in the recent past.

Okay. And assuming a good paddy crop comes in, in that case, do you think by -- and say there is a big disparity between the profitability between rice and maize ethanol, do you have the flexibility to move to rice-based ethanol or it is not possible at all?

No, of course, see, the unit used to run rice for the longest time. It's always easy to produce ENA or ethanol from rice. So depending on the market, we can always be flexible. And it's not that we are adamant that we only produced our spirit from maize. If rice is not profitable, there is any arbitrary, we can take advantage of that.

And if you decide to make that turnaround ever, how much time does it take you?

It's a matter of a day, it depends on the [indiscernible]

Okay. Fair enough. And finally, I mean, if you could just -- because I believe I'm hearing from certain other places, INR 1,750 crores in guidance, I believe that's only on the ethanol. If you could just give us indicative numbers for what do we think will be revenue for -- the revenue guidance for this year? And what would the operating margin guidance for this year?

See, we expect full 700 KLPD capacity utilization from the Distillery sector. So not just ethanol, it still has ENA, ethanol, DDGS, CO2, Country Liquor. So about INR 800-odd crores from this sector. And edible oil business, we expect this to continue. And it didn't -- should be on the same from what we've seen in the first half.

So if I understand correctly, around INR 2,500 crores of revenue and around 8% operating margin?

Yes, for the past 2 quarters, yes.

Okay. Just a bit of feedback. I mean I understand the decision has been taken on the edible oil business, but I mean, considering the capacity constraints that the industry is facing and also considering this approach that the government is now taking to promote the farmer, don't you believe it might just be better to wait to sell the business? I mean, obviously...

See, Punjab is no longer a region that is focused on edible oil. So even if we renew it and even if government focuses on indigenous spell, there are different states to do business. So that's why the decision was made to exit out of this business. And to focus on green energy biodiesel, we expect that should get us better value addition.

Okay. Fair enough. And the value that you are putting to this...

Also, our unit is right in the -- so we don't expect our NOC to be -- NOC from pollution board would take much longer. So it makes sense.

Right. And the value that you are finding to this real estate was upwards of INR 400 crores. Am I correct?

No, no, no, I've never given such a figure of INR 400 crores. That is very high. And the -- no, this is -- the INR 400 crores is nowhere close to the actual figure for the real estate.

The next question is from the line of Dipesh Sancheti from Manya Finance.

Okay. My first question was regarding what -- how do you see the opportunity in biodiesel going ahead?

See, of course, we have an opportunity from the biodiesel sector, there is a 5% lending mandate in the Country, and the current blending rates are less 1%. The last blending rates that were released were at 0.3%. So of course, there is a new demand, and 5% lending mandated rate is only just a start. So we're a bit bullish on this sector. And also since that raw material is pretty -- priority of our raw material requirement is indigenous, so that should also play to our benefit because we're extracting oil and this is not hampering our ethanol production and it is values addition in terms of biodiesel.

Right. So the biodiesel will be value accretive as well as margins also will be high. Am I right in that assessment?

Yes. The overall margin of the business should increase once biodiesel has come in?

Okay. So apart from the 75 KLPD, which is starting in Bhatinda, are you even planning to do something in Kharagpur?

Yes. So we have permissions similarly at Kharagpur, we are awaiting the clearances and [indiscernible].

Okay. So -- and is there any peer of ours who's also doing anything in biodiesel or we are the only company which is doing biodiesel?

See, biodiesel, if there's a company that's producing biodiesel, other oils, that's not much of a competition. We have our own indigenous oil as raw material. And as I mentioned, there is huge for the same in the country and I don't know if any ethanol players is thinking on the same line. So I think we'll be the first ones to do this.

Okay. So we'll be the first ones to have such a big capacity and going ahead also, we are expanding on it. Great. Okay. And so -- and how do you see the blending going beyond 20% in ethanol? Do you think it's a peak CapEx cycle? Or do you see more opportunities going ahead?

No, I think beyond -- the government has formed a committee, [indiscernible] to come up to the policy on how flex-fuel engines will work and what should be the blending beyond 20%. So we're waiting the report, we expect that ethanol demand should increase further beyond 20% with -- and the overall blending rate increase in the country.

Great. Okay. I could see in your presentation that currently, your ENA -- I mean, we have produced less ENA and more focus has been on ethanol. Going ahead also, you see the similar trends going on or depending on the pricing will be flexible in producing ENA or ethanol?

We are always flexible depending on the ENA demand in the country. So I think in the coming times, we're expecting the ENA product in the Bengal to increase slightly from the previous levels. But that's all, we're always flexible depending on the supply/demand situation.

Okay. And most of the plants are flexible in that case. I think only your Bhatinda one which is on subsidy, that is not -- that is only ethanol, pure ethanol plant. Otherwise, rest are -- all the plants are flexible?

No, Bhatinda has the 400 KLPD, there is flexibility to produce 1 KLPD of ENA and for Kharagpur, that is a 300 KLPD plant, but you have the flexibility to produce up to 200 KLPD there as well.

Great. And the new capacity, which is coming 150 KLPD, that will be flexible or that will be purely ethanol?

That's only ethanol.

That's only ethanol. And the 250 KLPD, which we have acquired, what about that or is it too soon to say?

No, that is purely ethanol. The clearances are there. See, to get an ENA licenses is very difficult, there's a lot of [indiscernible]. That's why you see most of the plants that have come up in the country right now are dedicated ethanol plants as getting clearances for them are relatively easier. So the license is in place for the Goyal Distillery are also to produce ethanol only.

So at any time, we can have 400 KLPD dedicated for ENA? In case the prices shoot up a lot, we can have at least 40 KLPD for ENA and the rest will be for ethanol, is that the right assessment?

Right. Right. Right.

The next question is from the line of Shashank [indiscernible] individual investor. The next question is from the line of Neeraj, individual investor.

First of all, congratulations on the great set of numbers. When the whole industry is in turmoil because of the rising raw material price, you and your team has managed to performed very well in this quarter. So my first question is, what is your per liter power cost? Can you please share that?

Per liter power cost, because in Bhatinda, it is significantly lower as compared to our peers because of our usage of paddy straw. So in Bhatinda, we calculate this as around INR 3 to INR 4 only, whereas the industry standards are anywhere close to INR 6 to INR 7. For our Kharagpur unit, it's a little more than that. I'd say, it's around INR 6 -- INR 5 to INR 6.

Okay. That's good. Next question. So last year, you had procured some machinery for ENA production, right? And initially, you are planning to revamp the ENA machinery which required around 2 to 3 months of plant shutdown, but you decided to postpone because there was overwhelming demand for ENA, and you didn't want to shut down then. So like what is the plan regarding that because if I understand correctly, the machinery was already sitting in your plant, right?

Yes, you're right. Neeraj, actually, we're still experiencing good demand for ENA. So we're not planning a shutdown right now or in the future as well. What we are exploring is how to -- if we're speaking with the suppliers, if this machinery can be utilized for our 150 KLPD ethanol expansion or not because right now with the ENA demand, we really don't want to shut down our unit.

Yes. That makes sense. Okay. And given that the realization for ENA is very good. And if I understand correctly, producing ENA is cheaper than ethanol because of the more alcohol concentration. So does it make sense to produce more ENA provided there is enough demand? So is there a plan to ramp up the ENA production?

Yes. That all depends on the demand. So if we see a greater demand, we will increase our ENA production. And that's decided on a month-to-month basis where we'll receive our orders for ENA at the start of every month. So in the winter, usually, we expect a greater demand for ENA as opposed to the summer season where beer consumption increases. So depending on the demand, the production of ENA can be increased at any time.

Okay. And I noticed that your working capital loan has decreased by around INR 90 crores this quarter compared to the last. So is that because of the interest subvention money that you received?

No, the interest subvention money does not. Actually, this quarter, there was no harvest happening, no big harvest happening. The only harvest happened was in Punjab. So we were not sitting on a huge pile of raw material, hence, the decrease in the working capital.

Okay. And sir, you mentioned previously that generally, the maize harvest is throughout the year except this 3-month window of around June to September, right? So like what does BCL do? Do you have the capacity to store inventory for these 3 months where no harvest happen? How much...

See we try to study the market inside our factory premises, we don't have the required -- we don't have the place to store for more than about 15 to 20 days of raw material. But depending on the markets, we can do forward contracts with our suppliers or we're exploring the option of stocking wherever the harvest is happening. But overall, our market strategy is always to procure the raw material when it's needed by us through traders. And because even if I were to stock it for a longer period of time, there will be about INR 3 to INR 3.5 in terms of finance costs, storage costs, losses, labor. So sometimes, we can pass that on to your supplier as well. So we don't believe in stocking up for 3 months.

Okay. And sir, we are expecting a bumper harvest from Bihar, right? And by now, we thought that it will bring down the raw material cost first. So that hasn't happened?

So Bihar crop is not due until May. Currently, the crop is due from MP, Rajasthan and some parts of Jharkhand. So we are expecting a good crop. There have been some untimely rains which have delayed the harvest. So post the value, we're expecting the harvest to come into the mundies.

And that should bring down the prices of maize somewhat, is that we are hoping for?

Yes. But even if it decreases, we don't expect a huge decrease as of -- so it should be similar from Q1 numbers or Q2 numbers of this financial year.

The next question is from the line of Bhavesh, an Investor.

Congratulations on a good set of numbers. So my first question is, with respect to your order book, regional order book, I just wanted to understand what is the current value of the order book?

The value in terms of rupees?

Yes. Rupees.

Just I don't have the number at the top of my head.

Because you -- the company update it on the BSE website. So this year, there was just a percentage uploaded, like there was an increase in the -- by 18% and approximately.

So the total allocation we have is about INR 18.25 crores if I were to even -- so this should be around INR 1,300 crores?

INR 1,300 crores. Okay.So we'll be getting more orders or this is a final order book for the...

See, this is the initial order book. But throughout the year, the OMCs do keep on giving increased requirement depending on the blending percentages and demand. So depending on ENA demand and what the OMC release in the end of the year, it would increase from here.

Perfect. And what about the debt reduction, like it's gone down by INR 100 crores this quarter. So do we expect another INR 100 crores in the next 6 months to 1 year time?

See, working capital was not utilized much this quarter. And so decreased the production there. Moving forward, once we shutdown our edible oil business, we will have to decrease our working capital requirement by around INR 3 crores. So that will reduce our overall debt as well. But working capital for requirement for our Distillery business can increase depending on how much raw material we're sitting on.

Okay. And my final question is with regards to your stock like your share. It is currently categorized under the Edible Oil segment. But most of your revenue is coming from the Distillery segment. So have you thought of applying to the stock exchanges and requesting them to recategorize you from the Edible Oil to Distillery segment because you have been getting a PE of 15 to 20, which is very lower compared to the Distillery stocks. So have you thought about it?

We are working on it. It's a store process. It is in our knowledge. So let's see how long it takes for that to be updated.

As there are no further questions, on behalf of InCred Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you so much.