Praj Industries Limited (PRAJIND) Earnings Call Transcript & Summary

[Audio Gap] busy schedules, you traveled some distance as to be here with us today. We also appreciate that you prioritize this engagement, there are few more other things happening here. And we assure you that every minute that you spend here would be worth that much I can have a strong conviction in our mind and our top management mind. Please allow me to put in perspective today's engagement. My name is Dr. Ravindra Utgikar, and I'm responsible for the Corporate Strategy at Praj. And today's investor meet is to engage with a wider spectrum of the financial fraternity, to give a much bigger perspective of our company, our Board, the vision and the evolving market landscape. We often meet you every quarter. We engage with most of you quarter-on-quarter. And most of our discussions then are confined to company's financials, financial performance. Our Executive Chairman and the Board thought it's a good idea to meet the financial fraternity and give them a big picture view of company's journey, company's readiness to embrace future, evolving market landscape and how we are creating a future-ready organization and inspire even more confidence and trust which you have been bestowing on us for years now. So the way we are going to spend next about 90 to 120 minutes is that we have a series of presentations. I'm joined on the dais besides Executive Chairman, by CEO and MD, Mr. Shishir Joshipura, who many of you know very well. And also Director Finance and Resources, Mr. Sachin Raole. Besides the top management, I'm also privileged to have my colleagues from senior management with whom you have had opportunity to engage just before we started this session. So the timing of today's investor meet is carefully chosen. First reason is we are absolutely on the foothills of COP 28 Summit that is getting kicked off in Dubai tomorrow. A strong India delegation, led by none other than the Prime Minister, will be there tomorrow, day after and then the Indian delegation will continue. So for the next 10, 12 days, you will hear stories about climate action, climate change, climate resilience, energy transition, circular economy, decarbonization, cleaner, greener technologies. And we thought there's no better time than today to familiarize you that your own company, Praj Industries, India's best-known industrial biotechnology company, is already since last 4 decades putting India right at the top of the global bioeconomy. So one idea was to actually remind, reassure and reinforce you about our endeavors in climate action, which is going to be the future because the whole world is looking at sustainable development and the companies that are engaged in sustainable development, sustainable technologies, innovation that can create a better future for the generations to come. And here is one company that is doing that all along. So we thought in a wider canvas, we will reach out to you and little bit share some things which we normally don't get time to discuss on a quarter-on-quarter basis. The next thing we would like to do here following my presentation is, there will be a presentation by Mr. Shishir Joshipura, then our Director of Finance, Sachin Raole, will be presenting. And of course, you'll have pleasure of listening to our visionary Chairman, Dr. Pramod Chaudhari. And then we have ample time provisioned for question-and-answer session. Please feel free to utilize that opportunity. And following that engagement, we have high tea, kindly avail the hospitality. So I have told one reason why we are here today that is about foothills of climate change conference, which is the apex conference of the business or business segment that we are in. Second, internal reason why we are here today is come 1st December 2023, our company completes 40 years of its journey. So it's a ruby anniversary year for our organization. And I think at 40th year is a great opportunity for all of us within Praj and all the stakeholders like the financial fraternity to pause, reflect on our journey, take stock of things that we are doing and also share the growth blueprint with you. So I think that's the second most important reason. And this carefully crafted visual that you see actually depicts our green growth that too from the biological or agricultural -- encompassing the agricultural or the farming community. So that's the second most important reason why we are meeting you today. So I have the privilege of presenting you little bit about the past and the history. We as Indians and for that matter for all humanity, history and the roots are extremely important. We should -- and we should never forget them. As Winston Churchill said once "those who fail to take learning from the history are doomed to repeat it." So just like any company, we have had our share of ups and downs, highs and lows. Our company has been very resilient. And that's what I would like to share in briefly our journey of 4 decades. It is said that the journey of 1,000 miles begins with a single step and that single but yet a very giant step our Executive Chairman took on 1st of December 1983 when he founded Praj Industries. Things like decarbonization, biofuels, climate action, climate crisis, climate resilience, climate calamities, were not even spoken then. Decade of his career with multinational companies, very flourishing career, he gave away to pursue his dream of making a company that will make a name for India on a global level, encompassing the people at the bottom of the pyramid, which is the farming community. That's where his childhood was spent. And that's what this slide tells you that one giant leap of faith, he called it, he took in 1983. He is a firm believer of sharing the wealth, and that is where to show his global vision. He was supported by none other than ICICI Venture Capital. Now the venture capital, private equity, angel investors, words are spoken at every second, third sentence in -- particularly in our fraternity. But those things were not even known then. But, I think Mr. Nahgul, you said, right, sir?

Vaghul.

Vaghul. He saw promise in Dr. Chaudhari's vision. And that's where the whole funding came in, which was the initial private equity funding of ICICI. And that actually fueled his global dreams. As you can see on this slide, we are trying to encapsulate our milestones, whether it is financial milestones, whether it is market expansion milestones, whether it is business expansion milestones or for that matter, technology expansion milestones. As a firm believer of technology has a prowess to change the world for better, distinguished alumnus of IIT Bombay, Dr. Chaudhari, always was passionate about harnessing technology to make life a better place for the agricultural community by providing avenues in the agri processing industry. And that's where it all started. So the first decade, obviously, was spent in sustaining, surviving, there was no talk of biofuels then. But he had his global dreams and ICICI actually became a very promising partner in that journey. If you look at the next journey, which is beginning of the next millennium, which is actually cutting into the next millennium, was more into -- foraying into international markets. Dr. Chaudhari actually recalls the oil crisis as a tipping point. And the steps that Brazil took to reduce the reliance on oil and actually harness its captive resources in the form of biofuels was playing on his mind, and that's how he thought this is a great opportunity because India, just like Brazil, is blessed with sun, land and agriculture, the resources which are not generously distributed, particularly in global North and he thought it will be a good idea to actually harness and capitalize on those resources. Obviously, for any sunrise industry, one needs to have conducive environment in terms of policy support, regulatory support, ecosystem development, financing, technology commercialization pathways, all that never existed then. So in India, and that's where he had to look for markets where the opportunities were. And that's where you see the forays in Far East and then actually South America. So that actually was a highlight of our second decade. Moving on to the third decade, the -- seeing the tremendous progress of our company, marquee investors like late Rakesh Jhunjhunwala, Ratan Tata and Vinod Ji Khosla associated with Praj, like a magnet they were drawn to Praj seeing the vision of harnessing clean and green energy sources. And that's the highlight of this decade. For the want of time, I don't have that luxury to go over several other things in terms of technology advancements and market expansion forays and business expansion forays, but it should suffice to say that the expertise in process industry that the organization had built, process engineering, technology expertise, company wanted to expand to other process industries and that's how forayed in allied businesses. He always believed that for any industry to thrive, survive and flourish and grow, one must have deep control over technology. And Praj Industries is a unique example that innovation in industrial biotechnology in India has been traveling across the world and continents. So the last decade that we are here today is actually after 3 decades of no policy headwinds, we finally saw a landmark movement in 2018 when National Biofuel Policy came in and the government saw promise in harnessing the captive resources. And from there, there was no looking back. And rest, many of you know how we have progressed. So the next slide actually tells you in numbers where we stand as an organization in terms of our people, in terms of our top line, bottom line, resources, patents, our global presence, our marquee customer base and so on. And the picture actually tells you the -- headquartered in Praj Hinjewadi and also the state-of-the-art world-class facilities pan-India basis. We also have offices in South America, North America, Europe and Far East to tap the opportunities in that. Numerous awards, accolades across the segments, across the functions came Praj way, be it quality, safety, health, environment, technology, people and those -- some of those are represented here. But the ones we have extremely pride is the one that was bestowed to Dr. Pramod Chaudhari in 2020, George Washington Carver Award, gentlemen who actually reformed the farming community in the 18th century by harnessing technology, science, innovation and agriculture and gave farmers a lease of life. And Dr. Chaudhari is seen as the modern day carver to take the legacy ahead by providing employment, entrepreneurship and growth opportunity to the farming community. So this award -- he became the first Indian and only Asian to receive so. And the second award, which actually is named after the father of ethanol, William C. Holmberg, in America. And that award is also prestigious and that got Dr. Chaudhari recognition as Ethanol Man. There is lots to tell, lots to share, but probably more about it in a bit. May I now invite our MD and CEO, Mr. Shishir Joshipura, to walk you through the company's leadership in bioeconomy. Please, Shishir, the floor is yours.

Thank you, Ravindra. It was like a movie flashing in front of our eyes of 4 decades of journey, one could capture in 4 slides, is -- as you said, is almost an impossible journey. So good afternoon -- good evening and very happy to be here. We have been talking amongst ourselves on the quarterly calls and other -- and this is a great pleasure for me today because as somebody who has commented to me outside that at least after long time that they are seeing Dr. Chaudhari also on stage and speaking and it is a great pleasure for them. And they said this is a good idea that the management and Dr. Chaudhari are on the same stage. I said, yes, we are on the same stage otherwise in life but happy to see him here as well. So where are we today? And when you are trying to think about it, this is a very interesting picture that I wanted to show you. These are the covers of our annual report over the years, past 7, okay? And very, very -- this actually tells the story of what we thought leadership is all about. We were talking about rice straw when nobody even talked about it. We're talking about climate change when nobody even thought about it. And that was reflected in our -- we were trying to -- if you see the first one, it talks about renewable energy shaping the future. Today, it's the buzz world. Ravindra mentioned about COP 28 starting tomorrow and the world leaders are congregating in Dubai to discuss what needs to happen. We talked about how do we work with agri waste back in 2017. And today, everybody is saying where is the feedstock, what can we do with it. There are -- there is a rush to supply -- to establish supply chains to bring the farmer into the main fold but this was something that this company thought many, many, many years ago. In '18, we talked about moving away from just a fuel-based focus to creating other set of materials around it in 2018. And I'm sure as we move through the future, you will see this biodegradable plastics, PLA. You will start listening of -- hearing about it at commercial scale as well. And at the '19 one when we says, "Hey, you are really gold." That was -- the point I am trying to make here is, the company is led -- and the vision of the founder who could see the future. And in many ways, when we said that people said, "Oh, this is too early what you guys are talking about." But today, if we reflect back, many of the things that was said in 7, 6, 5 years ago are all coming to fruition now. And that should start us thinking so when he speaks today, later in the day, my suggestion to all of you is that listen to this because that's the future unfolding in front of you. So as a company -- and that's the last one, the one where the aircraft is taking off. And today, at least when we are discussing between everybody was walking in, several people asked me around, "Hey, what's going to happen to the sustainable aviation fuel and where is this headed?" So very clearly, there's a vision that's driving the company and its efforts. And we are very, very proud. And I'm sharing -- this is not the way we thought, but when we're putting this slide together, I said, "Oh, this is actually aha-moment for all of us when we're putting this together and thought I should share this with you." So moving on -- so this bioeconomy, what's the bioeconomy? I mean you heard many terms being coined. What's important is to understand that this is that arena of economical development, which is away from what I call is traditional thinking around development, which is around steel and concrete, this is more about agriculture. How can we use what's nature is giving us in a very, very constructive way? What can we do -- how do we return back to nature what it gave us and not take away from it? How do we preserve the future for our children? That's bioeconomy to me. That's what we have learned at Praj. Obviously, it has to be renewable because what comes goes back. It clearly is very, very -- is the answer to sustainable decarbonization because this is carbon-friendly. Obviously, it is less toxic and most important is environmentally friendly. So this is what bioeconomy space is all about. And I use this definition slide, sorry, for -- so I was trying to be a professor here, but idea was if I go forward and talk about bioeconomy, you should say what are you referring to? So where is Praj? If you look at us, how did we see this world? How do -- even today, how do we continue to see this world?? And the central portion of the slide should tell you. We think there are feedstocks in the world. Every economy, every place in the earth has got a very differentiated feedstock that is available, okay? It's not same everywhere. Even in India, we know for example 3 states, sugarcane is a big crop, but not every state. Some states will have bamboo, some states will have rice, some will have maize and so on. So this is only in India, and you start expanding this to the global market, the feedstocks keep changing, both in nature and their availability. So we understood that feedstocks are something that's very crucial to -- for us to get a deep insight into it. And then what can we do? We can develop the technology around this, and that's what Praj has been doing for 40 years to develop technologies that can then create an end product, ethanol, aviation fuel, bioplastics, the list is long, that can be put to use for humanity on the principles of bioeconomy that I enumerated. So FTP as we call it, feedstock, technology and product and that gave rise to two platforms of Praj is offering. One, you're very familiar with the one on the left, the flowery circle which talks about the platform of Bio-Mobility, all those solutions that we create for enabling mobility of mankind through sustainable use of -- through the use of sustainable fuels, okay? That's what this left part is all about. And when we do that, as I mentioned, we lower the carbon footprint, we include the farmer. All the benefits will start working in time. And the one on the right, which is Bio-Prism, is about -- not about fuels, it's about materials. What kind of renewable chemicals and materials can we think and produce out of similar FTP process? That leverage is what we know, that leverage is our knowledge, but yet creates a better solution for mankind. So these are the two basic platforms on which internally we fulcrum ourselves. When we do something, is it on the Bio-Mobility platform or is it on the Bio-Prism platform? And obviously, whatever we do has to reduce the carbon footprint. There's no question about it. Just to give you a picture, a little more elaborate picture, so different feedstocks. Sometimes in our daily life we don't even think around those, saying are these all feedstocks? But there's a whole list of them, and this is not the exhaustive list. At the last count, when we were driving today, I was picking brain of Dr. Kumbhar, who is our R&D head. And the number was exceeding 9,000 in terms of the number of feedstocks that we have fingerprinted to understand what we can do with them. So moving on then from there. This is the Bio-Mobility circle that I was talking about. And just to give a little more idea about this. So if you look at the right-hand side of this picture, starting 2003, bioethanol, 1G, ethanol, that's what we started to develop and that's continuing from 2003 onwards. Biodiesel came into niche. So biodiesel and ethanol is what we call as conventional biofuels. The world knows about them. If you move to the next category, which is the advanced biofuel, this is something that happened in an iterative fashion as we moved forward with the understanding of technology and application. So cellulosic biofuels which is again, ethanol, but that comes out of straws and grasses. This is coming from the waste, right? So that's the second one and that started the journey in 2013. CBG, as in India, we call it compressed biogas; globally, renewable natural gas, again, utilizes a similar base of feedstocks and converts this now to a gaseous form of solution and not liquid form of solution. So those are the advanced biofuels category. The next-gen biofuels, these are the ones on the horizon. I showed you the aircraft taking off in the last year's report. The SAF, sustainable aviation fuels, which is going to replace the conventional Jet A-1 that is used in today's commercial aircraft-s. And then, of course, the marine biofuels because that's one segment that we don't get to hear or see about much because most of the pollution happens away from the inhabited areas. Moving further on what's in the store, we look at biomethanol. We look at bioethanol -- here we will probably look at biomethanol and of course -- sorry, biohydrogen. The buzz word in many, many areas today as to what's going to happen there. And of course, hydrogen got all kind of colors, the green and the gray and the blue and the pink, but this is the green hydrogen that I'm talking about from biohydrogen perspective. So as we move through this journey, we will see the whole flower actually flowering as it has already started to open some petals that we saw here on the Bio-Mobility platform. So these are the solutions for decarbonizing the transportation industry, which is thought to be one of the most difficult ones to achieve decarbonization and -- sorry, so Praj's effort, we'll be able to achieve those efforts. As we were doing this, where are we doing this? A lot of time and rightfully so, attention, gets taken care of because we are looking at a very, very supportive and very high energy program in India called EPV 20, which is allowing us to go and blend up to 20% of ethanol. We are more than halfway through that journey -- sorry, excuse me. And we are moving forward with that as well. However, as we move forward to this, it's not only India where this is happening. And I want to show you some of the plants that we've built and this will probably tell you, this is -- I can't put all the plants there. There are thousands of them. But just to show you that across the world, whether it's in the United States, whether it's in South America, Southeast Asia, Europe, Africa, no continent is left untouched with this wave of biofuels. That is emerging now. And we have -- all these plants are the ones that Praj provides the technology for and has given the equipment for and built them. I was talking about a movement globally and something very, very important happened a couple of months ago when India was at the helm of G20. Honorable Prime Minister in presence of President Biden and President Lula of Brazil and 19 other Heads of State announced formation of Global Biofuel Alliance. This is a very, very crucial development because this now makes it possible for countries that are not included in the biofuel movement to get included. And I can share with you that since this was announced, me and my team, we have had -- we've been part of dialogues with a dozen governments across the world, across the continents, those who have not yet started this movement of biofuels. The island nations of the world have a very real problem to their existence, and they are all very, very keen to see what they can do. And GBA will provide a great platform for us to move forward. And this is -- actually shape the future of biofuels as we go forward in a very, very constructive fashion. So three things. Three things at which Praj is very good from day 1. This is our DNA. Everything that we do, our design teams, our technology teams, our development teams ask this question. Is this going to lead to a carbon footprint reduction? Is this going to lead to a water footprint reduction? Or is this going to lead to an energy footprint reduction? These -- 1 of these 3 has to happen, then and only then a new solution is moving forward, otherwise is not. And this, we started to talk since inception, not now. When this was not known to the world, the company was thinking in terms of doing these 3 things in every solution that we develop. And when -- this is the DNA of the company. And because of this DNA, today, it has put us in a very unique position because now the world is taking the full note of what's happening. And everybody wants to understand and do what needs to be done. And I think that's where it makes and let me give you an example of that. So this is a very interesting slide. If you are in the United States today, and you are an ethanol producer, most of time you use corn as ethanol feedstock. And the U.S. government has announced under the Inflation Reduction Act, a very ambitious program to create 3 billion gallons of SAF by 2030, 3 billion gallons. That's 1,200 crore liters, roughly speaking. That is -- if all of that has to be produced, at least -- and if all of that is to be produced, then you need feedstock for producing that. And a significant portion of that, the first 2 billion roughly will come through a different route because that's already established. But beyond that, everything comes from what is called Alcohol-to-Jet route. And for every liter of SAF, you need 2 liters of ethanol. But not any ethanol, you need low-carbon ethanol. Remember, I talked to you about doing everything with lower carbon footprint. That's where our strength is. So today, we have a 3-step technology in-house to us, that allows us to reduce the carbon intensity of an existing plant from a high level of 68 to 72, it is on a scale of 100, these numbers, to a low number of 30 to 40. And that makes it fit to be a feedstock for production of SAF. That is the unique offering that Praj brings to this future world that is emerging. Low-carbon ethanol, there's something else that we developed. It is ultra-low-carbon ethanol. Or in local -- many times it gets referred to as 2G ethanol. But fundamentally, it is ultra-low-carbon ethanol. And the very unique 3 projects that we're building in India, and these are very unique because one of them is a pure greenfield project that we are building for HPCL in Bhatinda. The another one that we're building for BPCL in Bargarh has got a 2 track systems. So it's called 2G plant. It's also got co-located with the 1G plant or a basic feedstock plant. And then we have high IOCL at Panipat, which is co-located to a refinery, is next door to a refinery. And why are these important? Because as we move forward and world searches for ultra-low-carbon substitutes, refineries are going to be very major player in defining this journey forward. They will have a very major role to play. And our experience for these 3 plants will stand us in good deal. No other company in the world is currently working on 3 projects like this, no one. And that puts us in a very, very different position. This is a picture for you for the IOCL plant, that's under commissioning now. When done -- when completely done, is going to touch lives of 100,000 farmers. That's not a small number for one plant to touch. Yes, it will create over 1,500 rural jobs. And I'm not talking about jobs inside the plant. These are all outside the plant. There will be almost 60-odd thousand cars that will get displaced. What does it mean? So normal cars when they run, they emits carbon dioxide because they use fossil fuel-based petrol or diesel, whatever fuel that they're using. It is equivalent to take -- in pollution terms, when this plant gets commissioned, it will be equal to taking 60,000 cars off the road, yes. And obviously, almost 320,000 metric tons of CO2 will be avoided. The first ethanol, as we call it, is already out of the plant. It's now under recommissioning because, as you know, then October is the season when you start getting rice straw supplies. And we'll make it operation at 60% capacity, that's a stepwise process and the target is to do it by March of '24. So this is all about straws. But there is a very important element that we haven't talked about yet because not all the world is agrarian. There's a lot of world that is also forest. And therefore, we have 2-track technologies, Enfinity for agriculture residues and another technology called Celluniti that we codeveloped with Sekab of Sweden called Celluniti that takes care of all forest residual-based ethanol generation possibility. So 2 very different technologies that can address 2 very different feedstocks, but that practically covers the whole world -- now the whole world is agrarian in nature. Moving on. So this is all about liquids, but then we do something more. And I was mentioning to you about gas that is the new buzz word right now. In India, especially and not only in India, it's across the world as well. The ecosystem for gas is gradually building up. It needs several elements, how do you evacuate the gas, where are the pipelines, where are the applications, what regulations, what feedstocks, many dimensions. We have seen very bold plans being announced in India by both public and private sector. And they are -- I can confirm to you, they are all on the way, they are not mere announcements. There's a big international opportunity as well because many countries are waking up to this thought that well, if we can find a way to produce RNG from waste, then that probably is the most effective -- one of the most effective ways of reducing -- per tonne of carbon in terms of dollars invested, and therefore, it's finding a lot of traction. Again, what's unique for us is the fact that we understand biotechnology like nobody does, and that enables us to create some very unique solutions in this space, which are not easily copyable, which are patented to us. And now that we have established strong commercial scale references in India on different feedstocks. And just to track back a little bit, on the ethanol side of the story, when the ethanol plants were being set up in early days, we have set up over 50, 5-0, plants that treat affluent from distilleries and create -- those days, it was biogas because they were using it within the industry. And now it is CBG because then you've upgraded for automotive use. So a very, very rich legacy of understanding how CBG or biogas system evolves. All the businesses that I've talked to you about right now are about technology and putting up capital projects for customers, putting up large projects, helping them spend CapEx or capital expenditure. But we are also very aware of the fact that there's a lot of knowledge that resides in the company from which, our customers can benefit and it can also add value to the company and that is to extend our services on the engineering and life cycle management side. Plants that were built 15 years ago, obviously, technology has progressed a lot, okay? So what was valid then need not be valid today. So we are finding a lot of opportunities emerging from plant audit and integration engineering services that we can offer to our customers. And this is not true for India, this is true globally. We also understood that -- as technology is progressing, we need to start thinking about creating intersections of different -- so we can't just be glued to biotechnology and chemical engineering, but also start to think in terms of what can we do digitalization. And so our team came together and they created a plant performance monitoring tool where you can sit on your phone anywhere in the world and still manage N number of plants, if you have under your fold and keep a very close eye on what's happening. Obviously, O&M is something that is critical for customers, especially when it comes to new technologies and there's something that we are able to offer. And learning from all our experience of what it takes to run a plant in a good sense, we've also created performance enhancers, which is a repetitive revenue side business from the customers perspective. So a big focus on creating life cycle management business as well. On 19th of May, we created -- sorry to use this, I'm not trying to be bombastic, but we created history in India. On 19th of May when, as I say, we -- our Praj team took a sugarcane from the field in Maharashtra and flew a plane from the fuel that we created out of that. Two big events. There is an agreement called CORSIA, which was signed by over 128 governors in the world, which makes it mandatory for international flights to start blending sustainable aviation fuels starting 1st of January '27. India became a signatory at the beginning of this year. And then the recent announcement 2 days ago where Honorable Mr. Puri actually, when he received this flight, he had told the press conference in Delhi, I was present there, and he said, today is the flight with a 1% blending of fuel, I want to make sure that all flights in India are flying with 1%. And obviously, people wanted to know when. And now we know when because the government just announced that starting '27, we want 2% and then progressively going forward. So this is another era of opportunity that is coming our way. There's another interesting business that we pushed our strengths to. And that is something that is now coming to pay us very, very rich dividends. This is about energy transition and climate action. What are these? So world over, there is a big movement right now. Unlike the biofuel as well, fuel version was moving to mobility right now and this will start to evolve little differently, but change eventually is, right now, the green hydrogen is for big centralized locations where big plants will come up to replace what I would call as gray hydrogen that's being used especially in refineries, steel that kind of applications. And we have a unique offering to make there that our team is capable of conceptualizing a whole plant and build it, as you see in this picture here, on our factory shop floors and then send it in a -- we disassemble it, we put it in containers and send it. So when it reaches site, all you do is you put it together like LEGO toys, like the children do. So it avoids complete -- almost 70% of the site work. It allows you to build up a plant much higher quality and do it under very controlled conditions. And this is the trend that is taking place for multiple reasons in the developed part of the world. And we are partnering with some of the world leaders in this dimension to actually make this solution available to them. This is where we also announced our new investment of our new manufacturing facility at Mangalore, which will actually build this and much larger than this modules. Zero liquid discharge solution, remember the second one on reducing the water footprint. So we've always been very focused on ensuring that we create zero liquid discharge out of plants, so no affluent goes out, right? And there's a whole set of solutions that we are giving. And as is our want, we are now bringing in two very different angles to this technology, one by bringing the whole angle of how can I use -- harness solar energy to make a zero liquid discharge. And the second one is about, again, leveraging what we know well, creating and discovering and developing bacterial solutions that can actually treat very difficult to treat affluents. So that they are also not led to harmful discharge for society. I don't know how many of you, but -- so -- when -- if -- when you go out in the evening today, some of you are going to drink beer, remember, there is a 3 in 4 chance that is built in Praj plant, that technology in India, okay? So that's been a strength of the company we've built for practically every major brewery in India is built by us. And it is after -- and today, as the market is consolidating, there are 3 major global beer making companies and all the 3 are our customers, and we value our relationship with them. This also puts the hygienic manufacturing as an expertise area with us. That brings me to HiPurity, our subsidiary, which actually serves for high-purity water and associated systems to the pharma industry. A big -- and now the semiconductor industry walking in, semiconductor industry by the way needs almost same level of purity as pharma for their production systems. We also then move on to a very new phenomena that is unfolding in pharma, and that is the advent of fermentation technology. So fermentation for fuel, fermentation for pharma, and I'll talk about the 3 -- third F again. So fermentation for pharma, and this is where our parent company's knowledge around fermentation is coming handy. Hygienic manufacturing of PHS knowledge and their understanding of pharma applications is creating a very unique opportunity for them to offer solutions in the high capacity fermental zone. Let me show you a map. Sometimes a picture is more than 1,000 words. And Sandip is pointing to me saying your 1,000 words are over. So this is just to give you a view of where in the world -- and if you look at these names, these are the guys who are absolute leaders in their field. So one of the good signs is that we are actually working with absolute leaders all the top, so KBR, Fluor, the sugar companies, Wilmar Group, Vivergo Fuels. You can actually pick these names and these guys are leaders in their respective fields in the world, and that's who we partner with, they trust us, we work with them. And there's only one guy that I trust on numbers and that is my colleague, Sachin. So it is his time now to come and say his 1,000 words or figures or numbers or whatever it is. So welcome, Sachin. Thank you so much.

So good evening, all. I will just talk about 2 aspects and not everything what Shishir was mentioning. So mainly 2 aspects: one, profit and beyond profit. So this is our financial performance for the last 6 years, '18 to '23. And if you see that the growth in the revenue is almost 32% on the CAGR side. Bio-Energy demonstrated a very great growth of almost 40%. And within the engineering segment, ETCA has started showing its color and ETCA has also started picking up in a big way. Always the question gets asked what is your export or the international component in the revenue? And as compared to the domestic, naturally, that component is a little low. But if you look at the growth in export revenue has also happened almost 15%. ROCE has grown from 8% to 30%, a very impressive growth on the bases of the growth, which you are seeing in the business. Some numbers on the OB side. OB has moved from INR 1,000 crores to INR 4,000 crores, 4x growth in the order booking. This is annual orders which we are booking for all the businesses put together. If you look at EBITDA, EBITDA in the absolute number has moved from INR 31 crores to INR 318 crores, almost 5x. Yes, it has remained in the range bound of 7% to 9% for various reasons, but absolute number has moved almost 5x. EPS has moved from 3.5% to 13% again, 4, 4.5x kind of jump, which we have seen in EPS. And ROCE, as I mentioned, 8% to 30%. Segment wise, if you look at the revenue mix for FY '23, the year which has just passed by, 74% is Bio-Energy and 26% is non-Bio-Energy. But what we are targeting going forward? So for the first time, I'm going to talk about what we are targeting going forward. The target is almost 40% is going to come from non-Bio-Energy and almost 60%, 65% will come from the Bio-Energy. So Bio-Energy will still contribute more. But if you look at the higher picture or higher number kind of a game, other businesses are also going to contribute in a big way. If you look at, as I mentioned about the domestic versus international segmentation, FY '23 was 18% domestic and 82% on the -- sorry, 82% on domestic and 18% on international. What we are targeting going forward is almost 50%, 50% kind of revenue mix between international and the domestic. Let me just talk about something related to environment, social and governance. That's what I said this is something beyond profit. Shishir has greatly talked about the main piece of environment because all our businesses are linked to environment. Whatever we are doing is actually contributing to the environment. So environment is a big piece where we are basically talking about reduction in the greenhouse gas emissions. All our processes, all our practices are completely linked from the environment point of view. So we have very different practices on the green procurement side, sustainability in the supply chain side. So all our processes and policies are also linked to environment in a big way. Social, I will talk something about social in the next slide. But again, on the governance side, great governance which we follow. The entire Board, the entire company believes in governance, mainly on the compliances and most importantly, consistency and the transparency. Whatever we say, whatever we talk about, you will always see from the engagement side, there is always a consistency in our approach and the transparency level. I was talking about something on the corporate social responsibility. We take care of majorly 3 areas within this CSR side. One, environment; second, health; and the education is the third one. Very basic, water, we believe very, very -- we believe in water conservation in a very big way. So our efforts are very basic. But if you look at the impact, the impact is almost -- we have brought 12,360 acres of agricultural land under irrigation. So that's a big impact, which we have created only by having the water conservation as one of the policy of ours or one of the initiative of ours. Health is another one. Again, we take care of very basic health requirement. There is no big, big fancy medication or something. We only concentrate on the basic health factor. Again, if you look at the impact, it has impacted almost 7,000 beneficiaries over a period of time on the health side. And education, again, a very specific education segment. We provide the skill development kind of a thing. If you look at that also helps many, many beneficiaries on their life skills development and look at the impact, 6,500 students till date have got benefited because of education. This is one initiative which we have started by adopting a village called Mandede. It is a very small village. Population must be less than 1,000 people. Basic stuff is very, very difficult, even though that where it is near to Pune. We have started initiatives on the 6 segments, water, energy, waste, agriculture and nature and social. And the proposition is very, very simple. We have very close collaboration with the villagers. It is not only the corporate is working on that side but the villagers participation is in a big way. Idea is that if we want to seriously go for Net Zero kind of a concept, it has to start at the roots. And that's the reason why we adopted this village and we said that we will make this village as a Net Zero. Today, the emissions from this village might be around 415 or 430 kind of metric tons of emissions, which we have already counted. And now we are figuring it out what should be the ways and means of reduction of that. So we are working very closely on this particular village and we want to create this as a model village for Net Zero village. And last slide, I will not take 1,000 words, maybe I will just speak for 4 more minutes or, sorry, 2 more minutes. This is the investment which we have made in a big way for future, especially the investment from the ETCA segment. This is almost 123-acre premises, which we have taken on the lease. It's not our own property, but we have gone for a long-term lease. The sheds are the real sheds. These are the real sheds which have already there in this premises where our activities are going to start for our new subsidiary, which was floated recently, Praj Genx. On the right-hand side, you will see the pilot plants. These pilot plants are built up in our matrix. One plant is for bioplastics. Another one is the catalysis lab, which is actually going to help us in building up our SAF story. So this is what the investment which we have made from the future point of view. Now looking at the future, we talked a lot about what is happening now. But what is stored for the future? I'd like to invite Dr. Chaudhari to you for gaining some kind of an idea about future.

Well, very good afternoon, good evening, ladies and gentlemen. It's my utmost pleasure to be here standing in front of you, where we last -- such conference took place in Sofitel about -- more than 10 years back and some of you may still remember that. During the quarter-over-quarter, Shishir and Sachin are taking care of your requirements, information. So today, I thought of meeting all of you together so that we can share some of the future possibilities. There have been always a question [Foreign Language] and I've been definitely experiencing that question many times in the past, and some of you may remember that. It has become a reality on many accounts. And -- so I dared to share with you what is likely to be happening in the future and how Praj is going to be positioned in this. This is absolutely a new upcoming area. It's not a vanilla story. It is a peculiar story, which I thought I'll share with you, and you will definitely appreciate it if we jointly look at it. You've heard of sustainable development goals. And Praj has chosen to play in the bioeconomy space. There have been solar companies. There have been EVs. There are so many things are happening in this space, wind mills. We chose to play in bioeconomy. And perhaps we are first one to venture out in this space. What you'll notice from here that 11 of the 17 SDGs are addressed by bioeconomy as a starting point. And it takes care of the sustainability, social, environmental and economic as well as different kind of parameters and climate action, additional value for farmers. So we take care of the people element also, which is not so much happening in the other areas. And agri is kind of a backbone for our requirement. So it is at -- 80% or 70% of the population is still in the farms. I think this becomes an important aspect in the future. So what we are doing in this area? We are looking at the new things called Bio-Prism or RCM, carbon recycle through RCM. That means we'll be producing the bio-based products, which could be in the different parts like bioplastic, easy to understand, where there is a tremendous pressures on bioplastic ban and where is the alternative. So this is one thing. Or the areas where we can make some -- instead of synthetic or artificial, we can make biowaste products for the entire industry. You can see some of the things, tires and then capsule covers, paint. So many things are possible from the bio route. Very few people have tried it, hardly anybody in India, but even in the world also, it is still upcoming. So if you ask me what is the reference for figures, I can't give you any reference. But this is what we will try and we're going to put -- our R&D center is very well geared up to develop all these things. And we feel that we have got the necessary capability to at least introduce these things in the market. How the market will shift? Again, there is compulsions happening or people on their own, they are trying to follow these systems who would to like to use these renewables in their day-to-day life. I am counting on that kind of demand, which will help us to grow fast on this track. RCM. This we introduced in about 3 years back in a press conference. And if you see now this time, the government has declared they want to go for biomanufacturing as a line of business. Coincidence? I don't know. But wherever we have taken any steps, we find that the things gets followed up in right earnest by the authorities that we made -- yes, okay. Thank you. Thank you, Sandip. So these are the steps which we take and they act as harbinger of big things to happen in that place. That's the way we are looking at it. And this biomanufacturing is the policy Government of India has declared that they would like to roll out a plan for biowaste products. There will be biopolymers, biomaterials. They're expecting INR 10,000 crores of investment to go into this, not a small number. This will also give a rise to develop ethanol derivatives. From methanol, we can make ethylene and so many other products, which can also be put to use for variety of materials. We have taken 2 products to start with, PLA, polylactic acid, which will be replacing the bioplastic, biopolymer. And we are putting up our pilot plant. So whenever we do any development in R&D, it is in the conceptual stage and then it goes to base scale and then it goes to pilot scale. And this is a pilot plant coming up for bioplastic, which will be middle of next year it will start rolling out. We are tied up with the ICT for how to test these materials. And within this, there will be 3 phases lactic acid, which is a starting point, lactide and proteins and PHB, Butadiene. We're already talking to prospective customers and hopefully, at the right time we'll be able to put it into our information requirement. This is another few areas which are happening around us. I'm sure you heard about it hydrogen -- biohydrogen. People are talking about hydrogen green, gray, variety of things. Now we have decided to stick to biohydrogen because it is originating from farming. So agri is our fascination, our passion and we try to develop anything which I do it from agri. So green hydrogen is a thing, which can be produced from agri sources, and that will be again, fulfilling the requirement of hydrogen-based vehicles. Along the say, big highways, long highways, that people would like to use hydrogen engines, especially for heavy duty. And that's why we would like to look at hydrogen -- biohydrogen. Sustainable aviation fuel. We will definitely expand the capacities and for which we already form a JV with IndianOil. I can say other way around IndianOil has formed a JV with Praj and that is to support our technology into the manufacture of SAF. A lot of activities are expected in this space, for SAF. International flights, it's becoming mandatory. Indian government has declared some immediate requirement of 1% or 2% [indiscernible] by 2027. And I think this will be a very important upcoming area to also create a potential for use of ethanol, low-carbon ethanol. So these are the things which is likely to happen. Renewal syngas, synthetic gas from renewable sources. You see the CBG plant or the biogas plant on the left side, and that can be reformed to make biomethane into renewable syngas. So 1 product leading to the other product, and that's what we are trying to build, build on the current capabilities taking it forward. So the future fuels will take cognizance of this developments until we pretty much require. Like I mentioned here, green hydrogen, biomethanol and di-methyl ether, which will be for replacing diesel. Diesel has not much substitute so far. So one side, we are trying to develop diesel from use of ethanol blending, but this is a sure-shot solution that we can make di-methyl ether and put it in the heavy-duty vehicles. So these are the areas, which will go into areas -- excuse me please, they will go into the heavy-duty vehicles and other places, which are still yet to see the renewables fuels in their tanks. The syngas technology is very, very critical to all these things. And then what you saw in the earlier this thing, this is the di-methyl ether and biomethanol and the thing which you saw as a catalysis lab as a new development in Praj Matrix. See by and large, a little technical, the bio is through fermentation route, but there is a possibility of having a hybrid of bio and catalysis together. and that's what we are aiming for. Both together can make wonders, and that's what we would like to explore and introduce. So this lab, which is there, which is also required for SAF, we would like to build on that technology for making other catalytic processes to produce a variety of these things. DME and biomethanol or -- so these are fuels of the future. One area which is still, again, in the offing not tried it is India yet, and that is marine fuel, biomarine fuel or marine biofuel. And this can be done directly from agri residue. So it is BTL. You might have heard GTL, gas-to-liquid, this is a biomass-to-liquid, like that or there's a process called coal-to-liquid, CTL. So these are the things where you are going to go for liquid fuels by processing this raw materials. And here, you see that there's a marine biofuel is the next big thing required. Marine pollution is -- people are always worried about and 2 counts on plastics and because of the exhaust of the transportation in via marine transportation. So these are the things in the way we are likely to be. So these are a few things which are in the offing. I hope that people will believe in Praj's judgment and we can continue to develop and commercialize these areas what we call from R&D to D&D. So what it means in terms of revenue growth? Recently, we have a structured study with the help of a well-known international consultant who worked with us to identify what is the growth prospects and what is the Praj's capability. Both things if they can match with this vision that we go for energy transition, climate action, CBG/RNG range, SAF, RCM, renewable chemicals materials of biomanufacturing and all feature fuels together, we have aspiration of 3x by 2030. We divided the period into 1 triennium, 2 triennium. So 1 triennium is getting over by March '24, with what growth we have got, we'd like to continue -- pursue the growth, and we'll have 2 more triennium to take us to 2030 and we can see overall 3x revenue than today. This is our aspirations. And the reasons I mentioned, global biofuel alliance is one big thing. It can really change the entire dynamics in this space and Praj is definitely in a sweet spot to get benefited for biofuel production across the globe. Ever expanding cadence of bio economy, which I duly discussed with you a few things and be the global leader in this space, the top seat is empty, and we would like to definitely aim and achieve that. Thank you very much.

Thank you very much, Dr. Chaudhari, for that insightful presentation. Thank you very much, audience, for the patient listening to a story of purpose, passion and perseverance. The small sapling that Dr. Chaudhari planted 40 years back has grown into a full-fledged banyan tree. Now is the time to listen to any questions and get them addressed by our top management. And I'm also going to request my colleagues from senior management to join us on the dais. Dr. Pramod Kumbhar, who is the CTO. Dr. Kumbhar, if you can come here; Mr. Ghansham Deshpande, President of our Technology division; Mr. Atul Mulay who is the President of our flagship Bio-Energy division; and Mr. Abhijit Dani also the President of our GenX, which is ETCA Division. If you can join on the stage, please.

Thank you once again for bearing with us for that small interruption. We have our top management right here. The volunteers with the mic are in the room. Kindly identify yourself and please go ahead and ask your questions. Thank you.

This is Ashutosh Garud from Ambit PMS. So just wanted to get your sense -- I mean, you've done a phenomenal job over the last decade because it's not been an easy journey, especially for engineering companies in the previous decade. So congrats for that. You gave a sense of the futuristic aspects as far as the project and even on a revenue front. So just wanted to get some sense from a margin perspective. I mean, we've been around almost 8% to 9% consistently, which is quite commendable. So just wanted to get a sense of how do you think from an operational margin perspective we would move as we move closer to 2030?

So a small correction, this is not only an engineering company, this is a technology and engineering company. I thought let me make that small correction -- it is process technology. So that's the important correction, which is very well required, I thought, one. And two, because of that technology also, we are very consistently investing in our R&D. You must have seen that our investment in R&D is not less than 2% irrespective of the year, irrespective of the performance, we are investing very consistently in that. Coming back to your question on margins, we are naturally working on margin very aggressively. One point which we were debating when we are projecting our aspirations for revenue, we're also trying to figure it out whether we should make a mention about aspiration for our margin. Our aspiration is naturally to get into a good double-digit kind of a margin for next 2 trienniums what doctor was mentioning. So there is a work which is already going on the margin improvement. We had some difficult times and all of you know what was the period in the last couple of years because of the commodity prices, the way in which they were behaving, naturally margins was getting impacted. But going forward, we believe that there will be a chance, there will be a possibility, there is a leverage which is possible, and our margin improvement will start happening.

Thank you. I think the next question.

So this is Pritesh from Mission Street. My question is about the biowaste and availability of biowaste, like we have enough biowaste in the country. But the question is how to gather at a centralized place and logistic cost of gathering at some place and bringing to the plant. Can you throw some light like say we constantly hear about this parali problem in Punjab. The question is not about the nonavailability of biowaste, but how do you concentratedly gather those? And what is the logistic cost around that biowaste, bringing it to the central plant? Can you throw some economic ideas around that? And what do you think about sustainability of these projects around this?

Thank you. I think this is a very good question and a practical question. Now what's happening is that the collection of our -- aggregation of the biowaste, agri waste has really become a central point of the world requirement, say, imperative that we have to solve this and I mean a lot of actions are taking place. There are companies being formed. New entrepreneurs are taking the position to collect and establish the supply chain and government is also supporting for this aggregation. Because they are definitely under fire because of the smoke and other things. So they would like to see that it goes away by using this parali for product use and they are also supporting, say, per tonne INR 500, per tonne INR 1,000, plus give them the machine. So all those things are in the offering. So according to me in another 3 to 5 years, this will get established as a regular thing.

What is the idea around it? Like there will be a logistic cost, right? Like fields are far flung, roads are not connected. So I mean, is there any economic model around it? Or we are talking about biowaste...

Decentralized model also is likely to happen. I'm just putting a crystal ball, the decentralized model plus aggregation techniques, supply chains. All these things will happen. And the cost will -- margin will definitely go up, but the cost of climate change is nobody is able to really visualize. So against that we will be set off. So I think it will happen in that manner.

Sir, can I squeeze another question? This is with respect to a lot of ethanol plant is based on the food grain, and they say, [Foreign Language], So I mean how long is -- I mean what can be -- how long this can be sustained? I mean the price rise in the agri will not disturb the ethanol...

See, there are like -- maize is being developed in India now. Maize plants are coming up, maize-based plants. There are some -- I mean, if there's a problem, there's a solution also whereas it can be -- and maize gives some more co-products. Even rice also -- rice gives some co-product like protein and all that. So I personally feel or we feel as a Praj that this will continue the cycle of introduction of newer and newer materials. And other materials is various grasses, Napier grass, vetiver, so many kind of grasses are there. They're also under development. I think there will also some of the handy feedstock. Feedstock is going to be a very important thing to sustain this movement. What you guess is right, but I don't see any problems they along the line, the grain production has gone up and that's been available. In sugarcane, also, we have done so many things. We have got sugarcane juice, sugarcane syrup, earlier it was only molasses, now you've seen syrup, you have got biosyrup which can be stored. So like that, we try to work out around that and create opportunity not only for us but for our customers also. So these are all the solutions are going here.

This is Naushad from Aditya Birla Sun Life AMC. Just wanted to check one thing given our last volatile raw material cycle. Just wanted to understand what was the learning we have got from that cycle? And is there any meaningful changes we have done in terms of our contract terms, which may reduce the volatility, which we have seen in the past cycles?

Great question. I think volatility is going to be a part and parcel of a business. It's a risk which we just can't eliminate. We have tried to do a couple of things when we changed our contract terms. One, everyone is asking whether your fixed-price contracts are variable price contracts. Unfortunately, we just couldn't change that kind of a -- made a change in the contracting. And I think it is helping us because otherwise, the scenario would have been very, very different today it would have gone for a very well-priced kind of contracting. But what we try to do, we tried to change the pricing the way in which the contract is supposedly to get executed and how it is supposedly to get paid also. So the payment terms got definitely undergone a change. That helped us in storing our raw material, which we have seen happening in the last couple of years. So major change which we have made is on the payment side, but not fixed versus variable side.

Sir, Ramesh Bhojwani from Mehta and Vakil. Your presentation was all encompassing, not only about technological processes, but about the advancements of blending of ethanol with fossil fuel to the extent aviation fuel from 1% to 2% to 6% by 2030 and government is very, very keen for blending ethanol into fossil fuels for our passenger vehicles and commercial vehicles. Going forward, to what extent can ethanol blending in fossil fuels be implemented and effected very, very on a exigency basis is my question?

So the blending actually is coming -- and fossil fuel is in a way incentive. The blending came from a carbon intensity reduction. That's the decarbonization of the transportation section. And that is why the overall policies are getting framed up, the overall monitoring is also getting framed up. And what we have seen in the consistency. The -- originally if you see the ethanol blending program was declared, that's EBP20 for 2030. But the response of the all stakeholders, we have got in such a way that this program what we are going to -- perhaps it is one of fewest program that it got preponed and we have seen the success. And because we have seen the success, government is committed on that. And what we see is a reality now, and it's going to happen not only in the liquid fuel, but is also going to happen in gaseous fuel also. That we see as a the reality.

And even you showed in your presentation diesel will be blended.

Yes. So on a diesel blending program, there are various options available in diesel blending as Dr. Chaudhari mentioned about the DI ME. We talked about ethanol blending diesel, there is also isobutanol. So there are various options of bio-diesel, there is various options available with diesel blending program. Probably today, it is a ethanol blending program continues to be going on, diesel blending program it's a matter of time, maybe another 6 months or 1 year of time where they're testing with all those various options of the biofuel. It's also in absolutely coming few years is going to be a reality too.

Sir, are we going to see a blending to the extent of 20% of ethanol with the fossil fuels going forward? Or it has already happened?

If you see, it is actually not going to limit at 20%. It can go as high as 85% to 90% also. And probably you would have seen very recently that some of the vehicles, which are getting launched up to E85. So it is not restricted into 20%. It can go to E85 as well and probably Dr. Chaudhari can talk more about him. He himself was present in one of the inauguration of this function. Do you want to talk about it, sir?

So there's already a precision, right? So this is not something new, Brazil already uses E85. So they already have vehicles on the road, same cars that we see here, the same brands, they're all multinational. They are running vehicles on the road at E85 level at a minimum blend of E27. So we are talking of E20, Brazil is already at a minimum -- there are other countries as well Paraguay, which are E27 at the minimum level and they have vehicle at E85, even E100. So vehicles will have to change. Of course, we can't run the same vehicle on E85, not possible. But as the technology moves forward, we'll be able to see these changes happen and we will be able to see our advantage -- in advance of vehicles that will actually be able to use E85 or a blend anything in between thereof which is what happened in Brazil. The driver chooses what they want, okay? They choose the mix but they can go anywhere from E27 at the minimum, all the way to E100 and that's like -- so the technology already exists. There's already a precedent same cars, same manufacturers. I think as we go through this journey, today, we first have to reach the first milestone of E20 and I think once we do that, I'm sure that we'll see some of these developments in future.

Sir, as a consequence, we will not only be saving on cost of fuel, but also in emissions reduction will happen. But will it affect the calorific value of the fuel on combustion?

So the calorific value of ethanol is already a given property of that fuel, right? But once you take care of the fact if a design a vehicle for E85. Let's say I'm starting from basic 0, what it is also -- so while the calorific value for ethanol is lower compared to petrol that we use today. So it's a fact, so that means in liter terms, probably the consumption -- volume terms, the conversion will go a little higher. However, if you design it from the basic principles because of a very high octane number that is available with ethanol, you can actually design your engine for higher compression ratios. And that then enhances the engine efficiency, that sort of offset this loss. So you'll not gain anything, but what you will gain on the emission side that there'll be no emissions, the CO2, your future, those benefits will, of course, remain, but a basic design will ensure that you don't lose as a user on running your vehicle.

Yes, yes. So thanks a lot for the insightful presentation to everyone. Sir, my question was with respect to CBG space. So we understand that EBP and SATAT both started at the same time in the government. But SATAT for various reasons didn't picked up as well as EBP program. So what are the 3, 4 major changes which has happened, which makes you believe that CBB -- CBG as a space would in 3 to 5 years' time would give that kind of same kind of opportunity or more than that? And also on the CBG space, can we expect -- when can we expect broader participation from various private players coming in the way we have seen in EBP?

So I think what's happening is since you compared it to the EBP20 program, India is not a gas economy, right? So our ecosystem was not built for gas. So whether in terms of dispensing retail outlets, whether in terms of pipelines, even industry itself, the SATAT is a unique program in the world. It doesn't exist anywhere else in the world, anything even remotely close to it. So this was obviously a very, very bold program that the government launched. Now if the ecosystem -- and you can't store gas, so you have to use it as soon as -- more or less as soon as you produce it, and that was a big challenge for the industry. So that was one big area of development of ecosystem, which will have a network of pipelines, the CGD network that is being established now will become a very big enabler for the gas you only heard about government's announcement that they are now mandating that they'll have to blend CBG into the CGD networks. So this policy -- so one is the policy dimension, as we are traversing this path, we are also understanding what needs to be happening. And I think what's very, very encouraging is the government is listening and they are very proactive in starting to decide what interventions are required and what changes, for example, this blending that was decided for CGD networks, as an example. So that's one dimension. The second one is the retail infrastructure just doesn't exist. For ethanol that was very simple because petrol existed. There was no change required, the same infrastructure, same vehicles. If today, I want to use gas, my vehicle needs to change, at least something in my vehicle needs to change. So that's the second one. On the user side, also, there are changes that are called for. So the gas system has evolved at a different speed. It started out at a different point as well on the development curve as compared to ethanol. As we go forward, I think as ecosystem start to take routes, more and more CGD networks are put up, we will start to see a demand emerging for gas today. There are customers of ours who are producing gas but are not able to sell it. So they just have to flare it, which is just a disaster, right, as far as the economic value is concern. So from that perspective, I think what we will see as the system -- probably as we travel to the next calendar year, we'll see a lot of these issues getting resolved and other issues around how to price it, what to do with the by -- because it is a very important byproduct when you make CBG fertilizers, which becomes a very, very important byproduct of this whole process. There are laws around fertilizer that had to be changed so that people use this as a fertilizer. So some of these changes are being brought in. And I think as ecosystems align itself to the need of the technology and the markets, I'm sure we'll see a good growth.

So just to get some numbers perspective, the lumpiness in this CBG order or should I say, consistency of CBG order in our order inflow which year in your mind, a few quarters down the line or FY '25, '26, where do you see that consistency coming in?

I think we are just at the cusp of the beginning of a curve, if I can. What's the shape of the curve, what's the slope, time will tell, but we are just at the beginning of the curve.

Okay. One more question, if I can ask. Sir, in your presentation, you said that because of GBA in new international avenues have opened up for CBG space per se, right, if I'm not wrong. So can you throw some more light on that? And what kind of size of opportunity we're looking over there?

So GBA is not only around CBG. These are not biofuels in general. So there is -- there are economies where ethanol makes more sense. Well, it makes sense everywhere for that matter. There are economies or local conditions where CBG may make sense. So it depends -- so there is no one solution fits all. As I was mentioning in earlier that we understood very early on in our journey that feedstocks is something that we need to understand extremely well to be able to create a real global impact. And I think that's the key that how do these different feedstocks come into play because we appreciate that for every country, the laws of that country apply. So the governments have to get educated. So GBA is a platform that actually enables three things. It says it will make available to those countries that are wanting government level help for policy formulations and what is it that they need to have in an environment within their country. And on that, if they want help, India, United States, Brazil, the countries that have taken lead, the leaders in the biofuel journey will provide that help to them. The second is about making technology available to these countries, okay? I won't name the country, but I was just talking to an energy minister of a country, and they had no idea that they can actually produce ethanol within their own country. They said, "Oh, but you have to import it?" I said no, you can make it in your own country. You have the feedstock, you're just not thinking around it. So I think it's also a matter of educating and knowledge. So that's the second one where the pillar of technology will be sort of made available. And third, it also encourages trade. So there are three pillars on which GBA is going to work on. I think what's most important is, it's got government sponsorship across the world. So across the world, the government, the members of GBA are committed to make this into a movement. And given the fact that India, Brazil, United States are 3 very large countries and governments that are committed, but I see a big movement -- big enabling movement through GBA as we move forward.

Sarath Sathkumara, Aditya Birla Sun Life. Praj is an exceptional company taking advantage of India's scientific talent and engineering talent, and congratulations on that. It looks like sustainability and ESG is written all over you. It looks like you follow that and you help the farmers, vast majority of the population. However if I look at bread and butter of your business, ethanol plants, it goes into blending fuel, it also goes into making alcohol. That's a sin industry, sin like S.I.N. How do you balance the 2? As an investor, it's a bit of a dilemma for me?

See this dilemma I also faced in the earlier stage, going for a portable alcohol, beverage alcohol versus putting it for the fuel. One looks like a very noble cause, the other reason, I don't want to say some cause. So the point we got sorted out is -- I mean, in a lighter way that it is like -- our job is like a gardener. The gardener will grow the flowers, where it grows, he doesn't have any control on that. But flowers are definitely required for improving the quality of life for us. So something this is the energy, is both the growth for the car energy, for the human energy. These are some of the explanations. On the practical side, what has happened is that now more and more alcohol beverages are made from fine grain alcohols, they are becoming very common. And in that malt and all those things also playing a very important role. So my point is that the dilemma or this issue is not any more valid. There's a requirement of that segment, one has to fulfill that. And there are some foreign players are there like entire Bangalore company got foreign players -- UB -- Heineken. Yes. So Heineken is playing a role. Now they come in this country for investment because they want to make money out of it. So I think it has become now irrelevant this question or this kind of a comparison, is my personal opinion.

I can add to what Dr. Chaudhari said is also, if you look at the total proportion of the volume that gets created on the fuel ethanol side, that's 10x, 15x more than all the other uses of alcohol. So there is pharma-grade alcohol which gets used as sanitization, other applications. There is industrial alcohol and then there is a small -- very small bit, which goes to the portable alcohol industry. So it's not a very large portion of the overall.

Vikram from PhillipCapital what will be the opportunity road map for 2G technology given in terms of capital cost reduction opportunities as well as the byproduct value creation? And will there be opportunity for private players given the possibility of cost reduction or value creation going forward? Because the same raw material now is competing for biogas. So will that raw material be more relevant to biogas rather than 2G technology? So just trying to understand that road map.

I think it's a very good question. Same dilemma what Dr. Chaudhari was talking about is whether this feedstock will go for ethanol or for CBG, right? But the understanding is that in the general principle whenever you have simple sugars available, the first choice would be always for ethanol and the complex organics, which are very complex sugar, which will move over bio-methanation because these are two different technologies, which are competing each other, not -- complementing each other, not competing each other. So when we talk about 2G, the first thing, what would be done, which we'll be converting into ethanol and the residue which would be left out, which has mainly complex organics, will be converted into CBG. So there will not be a direct competition. Coming to the second point, definitely, the current challenges on the feedstock handling, especially the sizing of the rice straw and so and so forth. So material handling, there is area of focus going forward where the main CapEx is today involved. So major focus is to reduce how we can really reduce the cost of CapEx and there are advanced technologies, which we have not talked in this, but there is something like ionic liquids for example. Today, we are using a lot of thermal energy in pretreatment of agri residue. So there are alternative technologies we are also developing our R&D. So expectation is that the cost of production, today, we are at least close to what we are seeing in the grain-to-ethanol, the cost of conversion in case of a rice-to-ethanol is almost comparable. It's not close to molasses-to-ethanol, but yes, I think we are there, but yes going forward, our objective is to bring down cost of conversion by almost 20%, 30%. And there are a lot of papers today we are taking in our R&D. Hope I think this question is answered.

And on byproduct side, how are the value creation opportunities, which can add to apart from the ethanol?

Yes, it is a very good question. So first thing is that sugars will be converted into alcohol, balanced organic to be CBG, which is most valuable in co-products. And rest of the residue which remains which has a very high value, which we call as a lignin residue, right? And if lignin can be converted into either bio-bitumen or lignosulfonate and so and so forth. So there's another co-product, which we value-added co-products, which can also be sold into market. So this will also create a lot of viability improvement going forward.

And just I had last one. But are we seeing any private interest coming? Or it still will be like an OMC balance sheet use for at least future growth?

So we are beginning to see -- so there's a little different kind of private segments that are coming into 2G in India. And the investors may not be in India. They actually are coming from abroad. We are seeing a very constructive and positive movement from Japanese investors because Japan is very clearly looking for ultra-low-carbon ethanol. Again -- although it's becoming increasingly clear, again with the perspective of saying what can I do with this ultra-low carbon ethanol, there's many needs as Dr. Chaudhari was mentioning, you can go -- use it as it is as ultra-low carbon ethanol but you can also then derive to SAF, derive to low carbon chemicals. You can do bioplastics. So there are different uses that one can put through and we are seeing increasing interest from a lot of Japanese investors in setting up these capacities in India.

Manish Goyal here. A few questions. First, on the -- you mentioned on the slide that Praj is adopting a partnership model. And the first one is with the IOC on sustainable aviation fuel. So what role would Praj play going forward in terms of being only a technology provider or we would probably also look to invest capital in the projects which are upcoming? And also like when you are probably projecting 3x revenue, how would revenue profile get build up? Like are you factoring certain revenue from these large projects, which would come under partnership model? Second question on renewable chemicals like -- so the technology what we are developing, will it be kind of allow brownfield expansions on the existing ethanol plants and the fuel-based plants which are already set up or it will require a greenfield investments? And where are we in this journey as to some of the product development? You did mention a couple of -- 3 products. So where are we on the development stage? And when can we see the first commercial level production? Third, on the sustainable aviation fuel, like I believe it's more focused on low carbon intensity. So ideally, what it implies or we understand is that it will be largely on 2G technology and probably at the current stage where we are, how do you see that viability building up when we probably have a certain blending mandate from 2027 and going up increasing to 2030? So you did mention in terms of some viability on the 2G technology currently, but where are we in terms of yield, in terms of input/output ratios, if you can give us a perspective?

My God, there are very loaded, many questions. We will try to answer to the extent possible. One on the partnership model or a business model which you mentioned, we are saying that the -- currently, we are providing technology. We are providing equipment, and we are building the projects for our customers. Our philosophy remained that we don't want to be in competition with our customers. That was the basic philosophy with which the business model was developed till date. But going forward, when we are looking at the way in which Canvas is emerging, we will have to play a partnership role, we will have to partner in this projects, too. Now to what extent we will be partnering and to what extent we will be putting in capital is a question mark. For example, right now, what we talked about is the IOCL JV. IOCL JV is not only for SAF, it is for all kind of biofuels, We might see apart from SAF some other projects also coming up under that JV for that matter. The investment will be decided based on what kind of appetite other players are also going to have because it is not only the project which is going to get come up only on the basis of JV, but we'll require other partners also. So the proportion of equity, proportion of capital investment has to yet finalize or yet to get decided. But yes we are ready for that now, that's one point. Similar to model which we are seeing for IOC, we will be seeing similar models coming for RCM also for that matter because, again, that is going to be a completely uncharted kind of an area. Completely different business model will also require to be played over there. And at Praj, we are ready for making those kinds of investments. Again, we'll have to see what kind of numbers need to be put in, into that. And we'll definitely at opportune time come out with those kind of detailing to you saying that this is the investment which are good.

Could you please repeat the question?

Trying to understand in terms of for SAF, requirement is low carbon fuels and then ideally, what it implies is that it will be 2G-based. And probably at current levels, where are we in terms of -- or maybe I would say what kind of improvement is required in 2G technology from currently what we have achieved, how do we see going forward? And also additional question is that there are 2 technologies, 1 is in-house technology and 1 is -- which is agri-based and we have another technology, which is again forest residue. So how will that also play out and how would we play a role in it?

So let me clarify. So for a long period of time, the world talked about feedstock-based ethanol, 1G, 2G in the technology level. 1G was sugary, starchy feedstocks, then we went to lignocellulosic, it became 2G. The dialogue is shifting to say, we want to understand the carbon intensity of each. So it's not carbon intensity-based ethanol. That's the dialogue that's shifting. It is possible for, as I was mentioning, because of the work that we have been doing over the years. Now sometimes, especially for companies like ours, we do develop many technologies, sometimes they may not find in that moment in time an application, but maybe out in the future because certain things changes that becomes the technology to deploy. And that's what I was mentioning that we now have a technology, three-step technology solution available which has been with us in different forms over a period of time. But now when we deploy it together, it actually helps you to reduce and I'm using the colloquial language, for 1G corn-based ethanol plant carbon intensity scores from 68, 72 level to 38, 42. So that's the kind of transformation that can take place in the 1G corn ethanol plant, so that will also become a low carbon intensity. Now obviously, if I'm an airline, I want lowest carbon intensity fuel because for every liter that I fill into my wings, I want to travel farthest with the lowest carbon emission. That's the aim, right? But as this space develops on the SAF, under sustainable aviation fuels, this is still early days, but we will see development that takes place based on carbon intensity. So clearly, ultra-low carbon ethanol will be a sure-shot winner from the carbon intensity perspective. We obvious -- we have to overcome the challenge that ultra-low carbon ethanol faces from the perspective of its cost. But then again, if you go to 1G, make that ultra-low carbon if you're looking at the same thing. So now it's a new product category, if I can use that word, that is a carbon tag or carbon intensity tag that will emerge and the number of -- the intensity number will discern. We are not at that stage yet. But actually, the carbon intensity can determine the price at which it gets sold. So this is still early days. But right now, because we are still at still blending level of 1%, 2%, I think we need to learn through how the whole mechanism develops, what the issues are. And I'm sure that we will see a lot more progress on that front as well.

Okay. One last question, which probably left unanswered was in our journey of 3x revenues, how do we see revenue mix changing? Like today, a large part of your revenues is on execution of plants in the various areas. You also mentioned 40% coming from non-ethanol or non-biofuel based. So are we seeing a quantum jump in your pure engineering design and engineering-based revenues and that could also probably help you to achieve a fairly good margin?

So we mentioned about engineering is definitely going to go up. And that's the reason why this additional investment has been made in a new subsidiary. What currently we are doing and what we can do in Mangalore is almost 7x -- 6x to 7x what we can deliver from that facility. So that is the growth which we are expecting to happen in that engineering segment itself which is again going to contribute to ETCA as a segment. So yes, engineering is going to play an important role. In our aspirational number, apart from our traditional businesses of whatever we have mentioned as the bio-energy business is going to contribute definitely. But in addition to that, all these new initiatives, including these partnerships, are also being factored in to arrive at those kind of a revenue number. Margin profile. I think your question related again was related to how the margins are going to play out. Naturally, the idea is to improve the margins because there are a couple of more segments which will be contributing to this revenue. One segment which Shishir in his presentation was talking about services segment and the engineering segment. That engineering is not what I'm talking from the equipment point of view, but on the engineering services side, that is also going to contribute in a big way. So all these elements of different avenues or growth drivers are already considered while arriving at that number.

This is Nikunj Doshi from Bay Capital. Looking at the way world is moving and the kind of work that you are doing. I think the 3x revenue by 2030 looks slightly conservative, I would say. But what are the challenges that you see as an organization? And what are the gaps you need to fill to achieve the 3x revenue in terms of CapEx requirement, manpower requirement or resources, any other resources? What are the gaps you are seeing to achieve that?

I think Sachin mentioned that the new facility at Mangalore that we have put is going to put a 6x to 7x factor for Abhijit's business on ETCA. So that's something that we are very, very excited about and very focused on ensuring that sort of plays out the way we think it should. Also, from the perspective of reaching out, I think what's important, and I mentioned GBA is another platform that we become -- we believe will become very, very powerful as we go forward and we'll open up some very, very new markets, which either 2 are not the markets. So that's another thing that will happen. And what we will -- from the perspective of people, so what we need is that we will need to actually put a lot more effort onto the research side and development side. And as Dr. Chaudhari mentioned, not only stay focused with R&D, but then take the next step of what we call as D&D of design and deploy. So not only remain inside the lab but actually take it out in the field. So traversing that journey of fast commercialization is something that we will have to get better at. What we are doing today, maybe we need to do more off. So from that perspective, we need to put in place processes and resources that can enable us to do that from R&D to D&D on a faster route. We'll have to go and serve new markets. We'll have to see what competencies are required to serve those new markets. Sachin mentioned about the changing. So we were very ethanol -- very happy ethanol-centric company, right? But that's not the future, the future is very different. So even as ethanol grows, and that is definitely growing, we will have other elements walking in as well on the business side, right? So how do we ensure that -- and that's probably what keeps us awake is whatever equity of brand that we've built on the base of ethanol how do we make sure that, that further get enhanced? And we don't lose out because we are venturing to new frontiers. That to me is the key challenge for us.

And any technology outsourcing opportunities you're looking at -- means giving out technology, your technology to somebody else to commercialize or something? Are we looking at those kind of opportunities to scale?

So of course, there are two, of course, getting technology from outside or expecting licensing technologies. In RCM front, we are also looking at technology licensing part to other people going forward, but it's mostly based on -- happen mostly on partnership basis on the RCM side. Some of the technologies might be licensing in European or abroad might happen after we establish everything in India. So that's -- there is a fair bit of chance that we'll do that kind of thing moving forward.

My name is Manoj Bahety, I'm from Carnelian. So first of all, thank you so much, Dr. Chaudhari, for sharing your vision of transition of India as well as, I think, the global transformation from carbon-denominated economy to a biofuel or from -- to bio-products economy. So my question is when you are running all these projects, whether there is a team like which works simultaneously on the commercial aspect of this -- these projects and can like have a discussion with the government at early stage where like you can ask government like what kind of commercial support you need and what kind of supply chain bottlenecks are there? And second one, is there any thought of having like we have textile parks, we have like industrial parks, can we have like bio parks where like all these inputs can be collected and you can have like mass production where like a lot of supply chain bottlenecks can be taken care?

I'll answer your question. What you have suggested is quite novel and noble. But in reality, taking a government help really doesn't solve the problem. So we try to keep away from government inputs in terms of money. As regards to advocacy and all that, yes, we always keep on meeting them, discussing them, they reach out to us for asking for actual experience. There are -- biotech parks, they are definitely seriously considering. Government is considering that part. But the model which has happened in the other areas, like other research park or mass production area. See this is not happening in that manner, unfortunately. The situation which is there in, say, Delhi area could be different in Chennai area because of the various local parameters. Biotech is full of local parameters and the scale is also different. So these are some of the practical problems. But I'm sure there will be some solution will emerge out in terms of what you are saying as a clusters or park. They've thought of some clusters, it will happen ultimately.

Yes. My name is Rohit, I am from Market Memories. My question is on biogas plants. So where are the existing biogas plants coming up in India? Where are the locations? And can you give some brief outlook with numbers on the business opportunities in the biogas business going ahead?

So there are 2 or 3 very basic -- 4 actually feedstock groups if we can look at. One is sugar mills are very natural host for biogas projects because they have the basic feedstock that is required from our press point, but in some cases even biogas. So they are very, very, very clearly. So wherever there are sugar mills, there is a possibility of a gas plant to come online. The second is the distilleries or ethanol plants because where it's possible for -- as I've mentioning to you earlier, we've built out 50 projects, which were of course in biogas form because that was a specific at that time, but CBG is much higher purified form of biogas. So that's another host that it can happen -- there are affluent treatment plants of different affluents where you -- through a treatment, you could generate biogas and then that could get purified. So that's the third one. Then there is what I would call as independent plants, which can come up using straws, parali somebody mentioned in North of India, it could be anywhere in India, why should it be in North of India. There are other agriculture wastes. For example, in Gujarat, there is a talk about, we are building a plant right now based on cotton waste. So it depends on what -- and this is what I say as a principle, the feedstock is local to that locality, and we need to be able to find a solution locally that can be then taken up, right? So there are different applications, different feedstocks and they're all across the country. There's no fixed location where oh, this is good here, this is bad. So I think we would see a proliferation of these plants as these ecosystems develop. But the 2 things, one, the feedstock should be nearby, the second is the consumption point as well. Because gas you can't transport long distance. So either we need a pipeline then it's possible to transport long distance but transporting it on road and burning fossil fuel and then transporting it makes no sense. So that would be another ecosystem that will develop. The SATAT program actually calls for a very, very ambitious plan of setting of 5,000 plants. I'm sure one fine day it will be a reality. When that date is probably that's not the crystal ball for me to see. But definitely, we clearly see movement on ground from both public and private sector that they are beginning to consider setting up of these plants in a very, very serious fashion. So probably, if we meet a year down the line, I'll have more definitive answer.

I think we have just about time for 2 questions.

I am [ Vishal from Bhandan ]. So one question on the U.S.-based plants where there is enough need to reduce the carbon intensity. So where are the -- I mean, at what stage are the inquiries, orders that we expect from these areas to materialize?

So the U.S. opportunity is driven from the fact that the IRA, the U.S. government laid down a vision for creating a capacity for 3 billion gallons of SAF by 2030. And that's what is creating this opportunity and the HEFA route where we use the used cooking oil or oil seeds, that has a limited feedstock availability. So for the first 1.5 billion to 2 billion of that capacity will actually go the HEFA route because that's already there on the ground. But from there onwards, it is expected that alcohol-to-jet will become the route, which is where the ethanol comes to play, ethanol-to-jet. And -- so there are 200 plants in the United States that currently make corn-based ethanol. If they have to become a part of the supply chain for SAF, they need to reduce the carbon intensity of their ethanol, all of them, without exception. And the numbers that I was showing you is what needs to happen to them. So we have started to develop the other-- right now, the big -- a bit of a hold on that is provision called 45Z under the -- from the revenue department that they need clarification -- industry is waiting for a clarification on how 45Z will apply to SAF projects and in what manner and that is expected one of these days over the next couple of months clarification. I think that will clarify to industry what they should do in terms of tax getting as these are significant tax benefit that they can get. So I think once that is solved, we'll see the movement happening, and I did mention in our last quarterly call that we have the first contract out of United States for actually creating a low-carbon solution in the first plant in United States.

So on the biodegradable plastics front that we want to venture into. So as of now the economics don't seem to be suited for commercialization, so what will it take? I mean, is it the government incentive, which will support the commercialization of biodegradable plastics? Or could there be some technological interventions which could help here?

Okay. So biodegradable plastic, there are 2 things. The current biodegradable plastics which is commercially available in large scale is polylactic acid, which is the -- which is a certain price range that is available. So there are applications that are developed that get price can be sustained for use of PLA by using compounding and different approaches. So don't -- it's not looked as a replacement for polyethylene directly or polypropylene, which are low cost. So there are different applications or compounds that are being looked at where the price can be affordable at the current stage. Of course, there are technological interventions we are doing in other players which are existing those are trying to reduce the price cost of the volume are being made. So technological interventions will happen. But still, the question is that because of the low carbon intensity and because it starts from sugar, the price is going to be higher than fossil fuel-based polymer that is going to be there, that difference. That might reduce. Currently, if you see the polyethylene polymer remains about $1,500 per ton and PLA is available at $3,500 per ton. That might get reduced. It might be 2x or 2.5x more than that. But that will happen surely. Both on technology side as well as the application side will happen.

All right. I think that's just about the time we had or like all good things in life, this too has to come to an end. On behalf of Dr. Pramod Chaudhari, entire management of Praj, I want to profoundly thank you for being here today, patiently listening to us, talking to us, asking questions right from your heart, taking -- absorbing all the things. We look forward to continuing this engagement. I do want to take a minute out to thank Anuj and an entire team of Valorem for facilitating this, also Sparkle Event Management services for all the arrangements on audiovisuals and lighting. And finally, the Jio World Center Administration and staff for making available this fantastic avenue. Gentlemen, ladies, kindly make yourself convenient for the high tea that's just waiting outside. Thanks once again for being here. Good evening, and goodbye.