Trualt Bioenergy (NSE:TRUALT) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY 'twenty seven Earnings Conference Call of TruAlt Bioenergy Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference call over to Mr. Vijayanirani, Managing Director. Thank you, and over to you, sir. A very good morning to everyone. Thank you for joining this conference call. I'm happy to report the Q2 numbers for the financial year '27.

0:56 There has been a growth in our revenue numbers. The results have been posted. And as expected, the prices of raw materials have gone up. And due to the prices of raw materials going up, there was a shrinkage in the margins for the company for this quarter. However, thanks to the IPO that we did and the working capital limits that we have availed, going forward, we'll be able to stock up raw material at decent prices in order to make sure that we have a stable margin during operations. During the quarter, we received in excess to our 24 crore liters from of allocation from the public oil marketing companies.

1:44 We received an additional volume of INR 10 crore liters, thanks to the Supreme Court judgment in the month of July August. With that, our total supply or rather the allocation for the current for the last internal supply year went up from INR 24.5 crore liters to INR 34.5 crore liters. And in addition to the INR 34.5 crore liters, we also received an additional volume of INR 5 crore liters from the oil marketing companies, taking the total volume to almost 40 chlor liters for the supply for the last ethanol supplier. This leads us to an average utilization of almost about 65% or to 70% of our total installed capacity.

2:38 Going forward, we expect that the capacity utilization increases and we lock in an average capacity utilization of at least about 75% to 80%. The next tender for the ethanol supply year twenty twenty six, twenty twenty seven, starting from November up until October 2027 has already been announced and the tender is out now. As expected, in the current tender for the next year, there is a ban on use of sugarcane juice as well as B heavy molasses for making ethanol. That leaves a lot of pressure on grains for manufacturing of ethanol and also sea heavy molasses.

3:28 And that also means that close to about out of about 500 odd ethanol plants in the country, close to two thirty odd plants, which are mono feed using sugarcane derivatives as raw material will not be able to supply continuous ethanol will not be able to participate in the tender for a long I mean, for continued supply. So out of the total installed capacity of about 1,900 chlor liters, there will be a shortage of about 300 chlor liters coming in from the sugar based ethanol plant. So that leaves close to about 1,600 chlor liters expected to be supplied for the current year.

4:20 And of that 1,600 chlor liters, considering E and A as well as the private point of the private consumption that is for the chemical industries, we expect that the allocations for the current year will be in a better shape. However, due to the El Nino impact, we will probably see a shrinkage in the bottom line because of the price of raw material and availability of raw material also. We will make all efforts to book raw material at the cheapest available prices and stock up for the whole year in order to increase our bottom line. That's on the ethanol front. In the CVG, we have already commissioned our first CVG plant under the joint venture with Sumitomo Corporation.

5:11 The 20 GPT plant is up and running or rather it's being ramped up to capacity. The other two plants will be put to use within this quarter. So that takes entire CVG business to four operating plants. That is one in Leaffinity, which is of 20 pd and three in TruAlt Gas TruAlt Sumigas Private Limited, which is a joint venture with Sumitomo Corporation. By the end of the quarter, we will have an installed CVG production capacity of about 72 metric tons a day. And going forward, we also plan to start construction of additional six units along with Gale.

5:57 That said, the CBG business is going to be a big revenue driver or growth driver for TRUALT considering the government policy that was recently announced. There have been wonderful incentives and packages that are available for company that will end up creating a huge valuable opportunity for our growth plan in the CVG sector. In the sustainable aviation fuel business, our front end engineering is ongoing, and we were expecting that the policy for incentive and the road map would have been announced by now. But due to certain clarity required, we still don't see the road map coming in from the government of India. Once the road map is out, we plan to start making CapEx for the sustainable aviation business.

6:57 We have already received an incentive of about 150 crores as a viability gap fund under the PMG1 Yojana for the proposed plant. Going forward, our fuel retail business, we have already set up about seven outlets and another nearing commissioning. But due to the concerns or rather the crude prices, the volatility in it, we are taking the further growth of the outlets a little slow. That said, TruAlt Bioenergy in the Ethanol business has completed all of its proposed CapEx, and all we got to do now is further increase our capacity utilization and better the margins so that there's good returns.

7:50 With that, I ask c... Our CFO, Anand Keshwarji, to take us through the financials. Thank you, sir. Thank you for joining us for the q two and h one FY twenty seven result discussion of TRUALT Bioenergy Limited. I will take you through the key financials and operational highlights for the quarter and for the year half of FY twenty seven. Let me confirm the revenue performance. So our top line q two of FY twenty seven, our revenue from operation stood at $81.01 crore compared with $11.05 crore in q two of previous year. This represents a very strong year on year growth of approximately 606%. On a subsequent basis, revenue increased from $6.27 crore in q one f y twenty seven to $81.01 crore in q two, reflecting a continued improvement in operating f... Operating activity.

8:45 For h one FY twenty seven, revenue from operation stood at approximately $14.38 crore compared with $41.09 crore in h one of FY twenty six, representing a growth of around two forty three percent. The substantial improvement reflects a higher operating volume and improved utilization of our manufacturing capacity. On EBITDA performance, our EBITDA for q two FY twenty seven was approximately one one four translating into EBITDA margin of around 14.03%. In comparison, the company had reported a negative operating profitability in the corresponding year... Corresponding quarter of the previous year. For h one f y twenty seven, EBITDA stood at approximately $2.61 crore with an EBITDA margin of approximately 18.2%.

9:35 While the h one margin remains healthy, the moderation in q two EBITDA margin compared with the first quarter is due to increase in the raw material prices during the quarter of the month, which went up by 25 to 30%. Our focus remains on improving product mix, raw material efficiency, capacity utilization, and operating leverage. Let me come to the profitability front. The profit before tax for q two f y twenty seven stood at approximately 47 crore compared with a loss before tax of 49 crore in the q two f y twenty six. This is a significant turnaround in profitability. Profit after tax for q two f y twenty seven was approximately 35 crore compared with loss of approximately 38 crore in the corresponding period last year.

10:22 For h one FY twenty seven, PAT stood at approximately 94 crore compared with a loss of approximately 33 crore in h one of FY twenty six. The turnaround in profitability demonstrates the operating leverage available in our business as Capsule utilization improves. On the cost structure front, we continue to focus strongly on the raw material efficiency and cost optimization. Finance cost for FY... Finance cost for H1 FY twenty seven was approximately 87 crore compared with the 76 crore in H1 of FY twenty six. The increase is the ambient function of funding structure with the scale of operations. Depreciation and amortization for h one is stood at approximately 49 crore. As our assets become increasingly productive, our focus is on ensuring that incremental revenues translate into a stronger cash generation and return on capital.

11:15 One of the important areas for us is the cash generation. During h y f... During h one f y twenty seven, the company generated approximately $1.92 crore of cash flow from operating activities. This is a positive indicator of underlying operating strength of the business. At the same time, we invested approximately $1.80 karat in the CapEx, including property, plant, equipment, and CVIP. The investment is aligned without our strategy of strengthening and expanding our operating platform. Coming to the balance sheet. As of thirty September third... Twenty sixth, our total equity stood at $16.87 crore compared with the $15.78 crore during March 26. Our debt equity ratio is approximately 0.55 times, which continues to provide a reasonable capital structure for the scale of our operation.

12:02 Importantly, we also seen a meaningful reduction in certain working capital items. Inventory reduced from approximately $5.28 crore in March 26 to 206 crore in September 26. Trade is level also reduced from approximately $40.06 crore to $3.67 crore. These movements are positive from a working capital perspective and remain an important focus area for the management. During the first half, we continued to balance growth investment with financial discipline. We generated a strong operating cash flows while continued... While continuing to invest in our capacity and operating infrastructure. Our objective is to progressively improve cash conversion, reduce working capital intensity, and optimize our borrowing profile. Looking ahead, we remain cautiously optimistic about the second half of FY twenty seven.

12:50 The fundamentals of the bioenergy and ethanol sector remain attractive, supported by India's energy transition priorities, ethanol blending initiatives, and increasing emphasis on domestic renewable fuels. Our immediate priorities are improved capacity utilization, optimized feedstock and product mix, improved EBITDA margin, strengthened operating working... Operating cash flows, reduced working capital requirements, and maintain disciplined capital allocation. We believe that our significant turnaround achieved in h one for twenty seven provides a strong foundation for the next phase of the growth. To conclude, q two FY twenty seven has been a quarter of strong revenue growth, a clear turnaround in the profitability, and healthy operating cash generation.

13:36 We are conscious that the next phase is not only about growing revenue, but also converting the growth into sustainable EBITDA, stronger cash flows, and improved return on capital. The management remains focused on profitable growth and is strengthening the balance sheet while continuing to build TruAlt into a stronger and more diversified Bioenergy platform. With that, I would like to take... With that, I would like to thank all our shareholders, lenders, business partner, and employees for their continued confidence and support. I will now hand over the call for the question and answer session. Thank you. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2.

14:26 Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sukriti Patil from my side, Fintrade Private Limited. Please go ahead. Good morning to the team. I have two questions. My first question to mister Nirani is following the massive two forty three percent revenue surge in h one, Just want to understand what forward volume guidance can you share for the next two quarters as we build out Srikakulam SAS plant using the $1.50 crore PM g one grant. What major execution risk could delay commercial production, and what is our forward strategy to secure long long term?

15:18 Just wanna understand your plan of action on this. That's the first question. I'll ask my second question after this. Yes. Sure. Thank you for that, sir. With regards to the expected volume that we plan to supply for the current quarter, we like I said, we had an offer for almost allocation for about INR 24.5 crores from the OMCs. And in addition to that, we got about 15 crores liters added for the last ethanol supplier. So in the current quarter of that last year's allocation, ethanol supplier runs from November to October. And half of this quarter, that is October and November, will be supplying. And there is an extension already received. So two months of this current quarter, we will be supplying from the last internal supply year only.

16:09 So we already have about 8.5 crore liters of orders still left to be supplied for the month of October and for the month of November. And we have the required raw material as well as the I mean, the location to supply that. In addition to that, for the new ethanol supplier, we expect an allocation of at least about to 42 crore liters. That's the expectation. Of course, we'll have to see when we apply for the bids. And once the allocations are done, we will get to know the real I mean, the absolute picture. But for the current quarter, I can tell you that we have in hand about 8.5 crore liters to supply, and there'll be further addition that we will get.

17:01 Thank you. My second question to sir Tishore is along the similar lines, with quarter two revenue hitting a record 807, which is very good, what is our forward CapEx and debt guidance for the next quarter? As we simultaneously scale our multi location EPC project with GAIL and Sumitomo, what risks do you foresee to our working capital cycle, and what forward financial controls are in place to protect our cash cash flow? Just want to understand your on this. Thank you. Yeah. Thank you, sir. So your first question was online of the CapEx to be planned for the upcoming quarter.

17:48 So we have already... There there will be no CapEx involved from the one g 12 of rent. The capacity will remain same. The major CapEx will flow towards the CBG. This CBG plant, we we are expecting to comment in the next quarter close to three, four other plants that this CapEx will be starting growing at least four four to five plants, which which which will have a credit cost of around 60 karat per plant. So that was down to the 300 karat end of which we are expecting this debt to be raised to the extent of additional 70 to 80 crore as a as a primary transfer of the first disbursement from... On the terminal side of outstanding along with the JV partner with the gate. That is the first question replied. Can you please come back to the second question?

18:34 Yes. The second question was, as we simultaneously scale our multi location GPG project, what risk do you foresee to the working capital cycle? And what forward financial controls are in place? Yes, sir. So because the entire expenses on the CVG front, so working capital, there is hardly a requirement for a CVG partner in working capital. The working capital is not going to impact much because a major working capital with these plans will result run through the or the CVG plan. The cost you hardly anything. Means that is where the this business, CBD business, plus margin line is the EBITDA EBITDA margin of around 60 to 70%. So in our existing plant, also, we have a highly working capital of 10 CBD plants with 2.523.

19:22 If... Even if it works out to be a 100 plus by the end of the financial year, I assume there will be a maximum requirement of working capital which can rise 25 to 30 against which you will be generating a better revenue against this working capital. So the working capital will never be a a challenge from that point of one. As far as the risk mitigation is concerned as a as a. So that overall side, the risk mitigation will be taken care by the CPG plans only because compared to CapEx, the return in this business is very high, which we have proved in our last seven to eight such previous quarters also. And going forward, the same time term will be maintained with the minimal working capital requirement, which we are doing here and also the debt amount of 80 to 100 kilowatt hours, which will be again subdued by the offer in... It can... By the... Subdued by the offer interest attention, which will be... Capital subsidy, which will be receiving from under the government scheme.

20:18 So today, it's in... For our... All the plans, we are eligible for the capital subsidy of close to 2 crore per TBD. So this will be directly reducing the term debt of the company, and we are right right now eligible for 25% of these caps... Capital subsidies based on our consent to operate license. So all those things will be entirely subdued by the of a capital suspension and the the profit to be generated from this business. Thank you. Thank you, and best wishes. Thank you. Thank you. Next question is from the line of Tasha from Safar Capital. Please go ahead. Hello? Hello? Am I audible, sir? You are audible. Yes, ma'am.

21:04 Yes. Thank you so much, sir, for this opportunity. Couple of questions, sir. Firstly, what's the ethanol volume this quarter? For the current quarter, ma'am, like I said yes, go on, sir. So for this quarter, whether you want to say for H1 FY 'twenty seven, we have sold the total volume of ethanol. What we have sold is close to... Q one, we have sold 8.29 crore, and q two, we have sold 10.79 crore. So for the entire h one, we have sold 19.07 crore liters of ethanol. And, again, for this, we have what we selling, we have already already are spending orders to be service close to 8.5 caroliter other than the fresh allocation, which we are about to receive. Right. Right. Right. Okay. Fair enough. So, also, just wanted to... So you mentioned that we're seeing a lot of raw material pressure. Right?

21:56 But moving forward, because the government is banning the use of sugarcane juice, won't we be able to pass on this cost in terms of higher prices as well? Just wanted to understand how our contracts are shipped. So is there any way for us to pass on this increase in raw material and protect our margin? So even though even though you will say the ban is the let me come to the bank point where sugar prices in the market is 50 rupees, 48 rupees, 52 rupees. They'd be... I mean, sugar player, even though for them also... Even though it is not good have been banned, they would have preferred to sell it outside around sugar rather than diverting it to the industry because the profit margin will be... They will be getting a might be better than that. Right? So as far as for us us to make a rationalize on the cost benefit and more margin is to use a better product mix and the higher the capacity utilization.

22:47 So we have a plan where we are trying to store this measures and rice and rice at lowest of its price and accumulating at the various locations by storing a concept and storing it at a proper place so that the... Even though during this quarter, if the... It it goes at the peak of the price, we'll be able to maintain the maximum EBITDA margin at at least two... Such as at the the present level what we are maintaining. So this... The margin that you've done for ethanol this quarter is gonna be the base. It should only increase up from here on. Increase from here on. Usually, q two is the most difficult period because that's when summer is over and there's not much of raw material agrarian products available.

23:39 So whatever the Q2, whenever each of the years will have the lowest margins. It should improve from q three, q four onwards. So, sir, on an average for this year, what sort of margin should we expect for the ethanol business? I'm not able to give you an absolute number, but once the tenders are located, we might expect us maybe a one percent or 2% drop in the EBITDA margins of the average that we've been doing so far. Okay. Okay. And, sir, on the CVG side, just wanted to understand the other two plans that is gonna commission by end of q three. Are they on track? And for this year, I think... And for this quarter, I think you were... Last year, we received some subsidy. So what was the amount that quarter, and what was the subsidy amount that you were supposed to receive for this quarter?

24:33 You wanna take that? Yeah. So, subsidy about on the CPG front, we are commencing three plants of TruAlt, SubiGas private limited in JV with Assume Como. So these three plants will accrue around 60... These three plants constitute $1.80 crore of covenant. So the subsidy is eligible is 2 crore for TPD. So 16 to two works out to $1.20 crore. Right? So after 120 crore, we are right now eligible for 20 to 25 crore of subsidy out of this based on our consent to operate license. So for the quarter or even say, their match of a time end of another for the next quarter of first or second month, are definitely getting expecting a 25% to 3025% of U. K. $120 means you can work out to close to $30 per CD we are expecting by December as well.

25:28 Okay. And sir, the one plant with SM, we share with commission with CVG 20 PPD. How is the ramp up of that going? What sort of utilization are we targeting for this year? And for the other two that we're commencing, what sort of utilization should we look at for this year? So that will add to the... So you can say if it is... If we'll find the full cash revenue from the month of January, so that will add a a one quarter of revenue. So one quarter of revenue presently, if you see our existing plan, that comes around to 10 crores. So even though it works out to 10 crores one quarter, so it will add another revenue of 10 to 15 crores existing one plant and adding also another two plants for the past year will add another revenue of 10 crore because that is also picking up. We believe that INR crore of CPG segmental revenue will become from these two to three plants during the financial year. Next coming to the next next two quarters.

26:24 Okay. Okay. And, sir, for this 15 CR out of that 10 CR already, what is the update on the rest five CR? What are... Are we... When are we expecting that allocation to happen? Any sort of color on that? No. Like I said, we've received the allocation already. No? There's a clarity on it. Okay. So this is 10, there's a five nine. Mhmm. Yes. Yes. Okay. Okay. Fair enough. Fair enough. That'll be it from my side. Thank you. Thank you, ma'am. Thank you. Next question is from the line of from Abacus Investment Managers. Please go ahead. Yeah. Hi. Hi, Vijay, sir. Good afternoon. So just two small questions from my end, sir.

27:12 So in the current quarter, do we have built up for any inventory for the Q3 orders that we have? So is there any raw material inventory buildup in Q2? Yes, sir. Thank you for the question. We do we have a visibility already. So for that 8.5 cro liters, we already have the raw material required raw material tied up. And because the raw material was purchased during quarter two and the order also was received only in the month of August, there are the cost of the raw material was at a higher site. So the margin will be a little lower, but we already have the visibility on the raw material rather the raw material tied up. Okay. So the effective Q2 margin should be slightly upwards of 12%, what is it? Because that has some element of the raw material prices also into this.

28:08 You mean in q three, sir? No. In q two margins, We have some raw mat... Yeah. Yeah. For q two, we had the impact of definitely the increase in the price of raw material picked up by 25% close to... In the terms of. Although this was a bad start to... This was a muted season for the industry also because there is hardly a supply of the raw material during the quarter. Again, q three and q four is a is a is a seasonal business where this, again, the EBITDA margin will bounce back to when there is a certain level. Oh, okay. And so volume wise, we can go north of the current due to quarter because we already have, like, 8 crores commitments plus, you know, probably the next ethanol suppliers, 40 crore. Also, some elements could become in the November or December end. So can we see volume of price on the current quarter numbers as well or you?

29:12 Yes, sir. We expect that since we already have 8.5 liters of water, we expect at least about six to seven liters of additional volume. That's in the month of... We will have November and December alone, right, for the current quarter. So we expect a a few more coal liters to get added, but that will depend based on the location that we receive. There will be a good is the expectation. Okay. Okay, Philip. And lastly, sir, on the El Nino front, so we have been hearing that, you know, the southern part of the country will be affected with the El Nino more. So where is our raw material procurement coming from? And do you see any risk built into this where, you know, the prices of raw materials stay elevated for the next entire financial year?

30:03 Yes, sir. So there is a huge drop in the acreage of cultivation of major food crops that is maize, rice, as well as sugarcane, which is why you've been seeing the... There's a big rally in the price of all these commodities. The year next, there is a expected drop of about 35% in maize availability, And right, there's an expected drop of about 10% to 12%. And sugarcane, there's a drop of about 10% to 12% again. So that will squeeze the margins a little because the price of raw material will increase. That's thanks to the support of all new shareholders. We could convert three of our plants into green waste, which can take multiple feedstock and also have the working capital limits now.

30:53 We will be sourcing raw material from across the country. That's Bihar or Madhya Pradesh is a big place. Punjab is a big place for us to procure our material. We've already started looking for sourcing warehouses and stocking up the raw material required. Okay. Fair enough. Thank you, sir. Thank you. Next question is from the line of Udit Sagar from Pinpoint X Capital. Please go ahead. Yeah. Good afternoon, sir, and congratulations for the good result. So firstly, I wanted to know there have been some notifications regarding the pledging of shares and the intent of the promoters to increase the stake. So what exactly is the intent and till what percentage are we planning to add?

31:47 So the... Legally, are allowed to go up to 75%, sir. The idea was to try and increase it holding as much as possible, but we are almost at about 71.6% now, and we have a margin of about another three and a half to 4%. So we hope eventually we keep continuing to build the holding. So the current pledges where the notification have come, they have been used for the past purchases, or they are going to be used for the future purchases? For the future purchases. For the future purchases. Okay. Got it. Secondly, sir, on the CPG front, could you, like, kind of educate us on what the changes have been from the previous policy, how the margins or the subsidy has gone up?

32:40 Because we saw in the private market, like, companies like, are getting, like, a valuation of, say, $5,000,000,000, you know, and with... They're building out thousand TPD. So what exactly are we planning to do? Like, what are our plans for the midterm and, you know, long term since the government has given such a big push into CPG? Yes. So CBG is going to be a big growth opportunity for the entire country. So the new policy that's 2.0, There's a huge amount of changes that has already come in. To name a few, one, the capital incentives or the subsidy that is available per metric ton.

33:29 Earlier, there was a cap of about 10 crores per project, and the subsidy was somewhere about so the 10 GPT plant, it used to be at about INR 8 crores to 10 crores. Now the subsidies increased from INR 1 crore per ton to almost INR 2 crore per ton is doubled. And there's a cap of about INR 30 crores per plant, not per company, per plant. So let's say for the plant now, instead of having a INR 10 crores subsidy as early, now we'll have INR 20 crores of capital subsidy. Along with that, the price of gas is now assured for another ten years. There is an assurance on off takes. There is a take or pay clause already that's coming, which is favorable to the producers.

34:18 So 90% of whatever we produce, there is a condition that the OMCs will have to buy. And for the the obligation on the supplier that is us, we will have at least 50% should be offered. So which is a very good thing that is covered. Along with that, the price of the gas has also increased from INR 84 a kilo to now it has gone up to about INR 104 a kilo. And also, if the purity is higher, we can get a price of as high as about 116 to 120 rupees a year also. And along with that, there are... The sectors classified as a priority sector now. For MSMEs, there is the government guarantee for loans and things like those. So overall, there is a huge push for the CPG sector and we hope to take as much as benefits that we can.

35:15 Okay. Do we plan to I think our initial build out is for some plants with Gail and Sumitomo. I think it totals up to almost $2.50 TPD, if I'm not wrong. Yes, sir. In entirety, it would be. Okay. So any plans to go further on that? Like we see there's so much scope and I mean, our calculations, think in the next three to four years, maybe the country may be acquiring almost a lack of TPD. So I mean, what would be our plans? What kind of market share could we get? Yes. So right now, we have visibility on these two fifty metric tons. Beyond that, of course, we have expectation to keep building.

36:03 But two fifty is almost about twenty twenty four plants, right? There is still a lot of work to do, and we have only now commissioned about four plants commissioning. And the plants will begin construction. So over the next two years, we will see a lot of investments in the sector. Okay. Okay, sir. Got it. And sir, on the ethanol front, I'm a bit confused with the government policy. Say, they will not get ethanol from or I mean, there's a shortage of sugar. So they didn't want the sugar to be diverted to ethanol. So logically, shouldn't have they given more incentives for the maize producers to give more volumes like...

36:51 Please, sir, should have definitely done that considering the prices that has increased. They should have increased the price of maze based ethanol, but in fact, they've reduced the price by almost INR 3 a liters. We don't see the logic in it, but it is what it is now. So will they be able to still get the full application? I mean, wouldn't the ethanol producers be protest about it or whatever, I mean, looking at the scenario? We've already the industry has already raised concerns on the same subject, and we have reached out to the policymakers and the oil marketing companies. We hope that there is some kind of a revision in the prices to support. I'm not sure as of now what people are thinking, but we expect that there could be some correction.

37:47 Okay. Okay. Okay, sir. Thank you so much, and best of luck. Thank you, sir. Thank you. Next question is from the line of Bhavan Ali from Bajaj Alternate Investments. Please go ahead. Yeah. Hi. Thanks for the opportunity. So my first question is regarding the ethanol. What is the realization currently? And just wanted to understand because we went into greenfield grain based raw material procurement so that we can see this kind of RM fluctuation. Right? That was the thought process. But in the current quarter, we've seen 18 rupees going... Rising to 25. So at least if you can give a flavor on the RM, how will it pan over the years? If you can give a broader perspective, that is really helpful. That is the first question. Yeah.

38:43 Yes. So the whole objective of becoming dual feed is that to have the flexibility of different kinds of feedstocks. And we know that in different years, there'll be different availability on the raw material side. So one, achieving flexibility, we've already seen that. And also, if you look at historic cycles, there has always been a drop like situation once in every five years. And we see the impact now for the MVNO. And the current year, there is a shortage in the availability of raw material that I just explained earlier also. But going forward, that should correct itself, and we will have... We'll come back to normalcy.

39:29 But in years like these, we expect better prices so that our margins can improve. That's expectation from the government. But otherwise, from the company and from the management side, what we expect to do is stock up raw material at the available cheapest price so that further crunch in the raw material or rather the cost of production is streamlined to the best effect. Got that. So what could be the average realization for ethanol combined and for maize combined in your experience? What could be the average realization? And similarly on the raw material side, would be key raw material, blended average realization. Just to understand what would be the EBITDA per kg or per liter fluctuation just to get that understanding.

40:17 Right, sir. So if I were to take a guess, of course, this is subject to the location. But if I were to take a guess, the average realization this year, let's say, May based ethanol is at around INR 68 odd a liter. And also the ban on sugarcane juice and molasses. So ethanol derived from is at about INR 64 and from rice is about INR 60. So I expect an average blended rate of about INR 64 to 65 from the past year, which was at about INR 67. That's about dip of INR 3 a liter. However, the price of DDGS, which is a byproduct of grain based ethanol has increased, and we are looking at an average price of about INR 28 to INR 30 in the past month, and we expect the prices to be to continue to be higher going forward.

41:17 Sir, what would be the RM basket total cost per kg or per at least if you can provide that? Because there are a lot of variables. So in your experience, not to hold you for that, but at least an average. And going forward also, what could be your expectation? Right, sir. So in the past, we were hovering at around 62 to 66%, somewhere between that was the RM contribution. But going forward, I may not be able to give you the right thing, but it will be sub 70% is what we expect. And that would be the peak levels. Right? It... You don't expect it to go beyond that? We hope for that, sir. Again, it depends on the availability.

42:02 But also considering the cost of carry and all of this should be somewhere around that number. Got it. So my second question is regarding how do we intend to repay the pledge amount? What are the sources of funds that we have in personal capacity? Yeah. Please, if you can just explain that as well. No. That's the the... It's irrelevant for the company right now, but for... As management, we've got different sources of capital. So it's irrelevant for now. Okay. That is not a issue. Right? And what is the haircut price, if at all, that you would have raised the money at? It's a personal loan that I've taken, but that shouldn't bother or shouldn't affect the company by any means.

42:51 Fair enough, sir. And just on the CBG part, sir, just wanted to understand, currently, you're doing 20 crore revenue per quarter. That is closer to 80 crore revenue per annum for the 10 TPD. Right? So for 20 TPD at full utilization, can we expect, like, $1.50 to $1.60 crores at 84 you feel... Assuming that 84 rupees holds true? No. Correction there. We are doing an average of about $40.45 crores of turnover from a. That's almost about $4.4.5 crores of revenue per ton. That's a similar price... I mean, revenue to continue because earlier there used to be something called as a market development and assistance. That's a subsidy on the manual that we used to sell.

43:36 That has been discontinued now. And instead of that, the government is now giving the higher price for the gas. That's from INR84 crores to INR104 crores or INR115 crores depending on the purity. So that should average out your revenue cycles and the revenue per tonne should continue to be at somewhere around INR4 to INR5 crores, let's say INR4.5 crores per tonne. Fair enough. So that would be closer to 80 crores of top line on full maturity, I mean, on full utilization from one twenty TPD plant. Yeah. And and 60% is the realistic EBITDA? No. No. Correction again, sir. Is Yeah. We will have... For a 20 PPD plant, we should get somewhere about 80 crores. So we have three plants being commissioned now.

44:25 So Right. 80 to $2.40 odd crores. Right? Correct. Yes. Yes. Yes. So and the 60% is the realistic EBITDA one should work with that broadly? So that's the track record that we've had so far, but you can keep it somewhere around 50, 55% is what we are expecting. Okay. Fair enough. And at 01/2004, what could be the EBITDA level, at least if you can provide on the 01/2004 realization? It be it will be almost at the same level, sir, because as I told FDA discontinued that the gas prices increase. So this will offset the benefit from the MDA, and you can maintain the flat margin and EBITDA margin almost at the same level. A little bit increase from the previous level, one it is fully operational and and the the peak capacity. A little better than what I'm getting now.

45:16 Got it. Fair enough. Thank you so much. Really appreciate. Really appreciate your answers here. Thank you. Thank you. Next question is from the line of from Earth AIF. Please go ahead. Thank you for the opportunity. How many days of mail inventory did we have as on March 26? And going forward, do we see our margins going down as till now we have... We would have been able to able to manage the margins in h one due to lower price in inventory of the. So... Yeah. Yeah. So what is your question, sir? How many days? How many days of May inventory will be having March 26... As of March 26?

46:03 Okay. So as of March 26, it is available, sir. It's... As of September 26. So as of March, if you'll see, as of March, my inventory level was outstanding around $500 euro. And today, if you'll see, it is around 230 to €240. That is the inventory level we have in the books as compared to March and September. This inventory will be out of the book once this... You can say the season is is starting. We have already existing 8.5 kilo liter of orders in hand right now. So this order and with the additional order calling up, this existing inventory level are close to... As of September 26, which is around three hundred eighty ninety kilo of kilos.

46:51 So that will be immediately that will immediately go convert to sales. And then again, this will be a further additional inventory will be piled up based on the... It's not a location, which will be allocated during the year. Okay. And as on as on March 26, I I believe we must have inventories of sugar and maize both. And and going forward, we will only have inventory of maize, right? Yeah. We will have inventory of maize only going forward because this is... We we have previous part. Yes, sir. We'll have inventory of maize as well as rice. The maize food rice. Yes. Yes. Maize and rice because this is sugar is not a dish, so maize and rice should be the only inventory.

47:39 Okay. Okay. Okay. And, Nathan, we have heard that realization in maize based feedstock has decreased to approximately INR 68 from INR $71.72. So is it right? Or is there something else in it? Sorry, I didn't hear that. Sir, could you... Sir, what the realization from lease based feedstock this year? I'm able to predict that. That's based subject to the allocation. But out of the 8.5 crores that's pending, we still have about five around INR 4.5 crores to be supplied for the current quarter, that's the past orders already.

48:27 But only when we have the location for the next year, we would be able to share. Okay. Okay. Thank you. That's it from my side. Thank you. Thank you. Next question is from the line of, an individual investor. Please go ahead. Hello. Am I audible, sir? Hello? You are audible, sir. Yes, sir. Yeah. So my question is regarding if you can provide me with the gross margins specifically for each one segment. Average gross margins around the year, what we can expect. So you are asking for the upcoming upcoming period? Yes. For upcoming period.

49:15 Okay. So as we were telling, this will also... What our MD was telling, this will solely depend upon the kind of allocation which we were... We will be getting, which what we're expecting is 45 per liter based on on the allocation. But presently, whatever the gross margin is on the business side is there, actually, it will be somewhat plus only. Not better. I cannot tell you the precise number, because I I have only 8,500,000 of order to be supplied. But this is the one that will be in a better situation to reply your answer to question. Any any way you can provide more of a similar number? Any way you can provide me? Sir, we are we are not we are not supposed to comment these numbers. But Okay. Okay. I'm getting it now. But right now right now, if you'll see, right now, my present gross margin is close to 37%.

50:12 So you can do some plus minus what can be. But present present, my GPM is 37%. Okay. Okay. Thank you. Great, sir. Other question is regarding, like, are we looking to expand ourselves into GDGS by product? Sir, there is no need to because we are already getting a a substantial income from the at least, which is margin. Is price of $26.27 rupees per kg. So that is the already additional income generating from the... As a byproduct when we are using the mills based feedstock as for the production of it now. So that will... That that is a good amount of a contribution in the top line as well as the bottom line because we did not... In terms of bottom line, we did not incur any additional cost or overall expenses there as a byproduct income.

51:02 Okay, sir. Getting it. Getting it. And the other question I have is, like, as we have 65% of world feed capacity, the remaining capacity which we have is basically for sugar based itself. So how are we looking to get capacity growth towards that 35%? Yes. So balance, 1,300 klpd is already dual feeder. And if you'll see one of the plant, which is again a a 400 klpd plant, where, again, it is... It... The c molasses are not banned. It will be molasses and syrup is banned. So we are dedicating one plant completely for the utilization of the sea based molasses also other than the... We have the option to convert and we have the option to use it as other feeder also. So based on our present capacity, we are expecting a sufficient allocation to optimize this plant as a maximum capacity utilization, which is currently during the quarter. It was 62%, and during the actual, also, was around 64, 65%.

52:01 So capacity utilization will not be a charging charge. Okay, sir. Getting it. Getting it. Thank you. And last question, Praveen, regarding... Like, it doesn't tell me the annual realization, like, we are telling for e and a also. So about realization for e and a, particularly? So e and a, we I'll get a bit. So there is a a good increase in the price of NA already. We are looking at prices for long contracts at about 62 to 63 rupees a liter. Cost of producing NA is almost cheaper by 1.5 to 2 rupees a liter. So it makes more sense to make EMA. Like Anans was mentioning, our other two units, at least of that 400 kfpd, we proposed to run it on the unit for the whole year using the sea heavy molasses. So that's the expectation.

52:56 Whatever... If there's an increase in the price of ethanol based from sea heavy molasses, then we convert that into ethanol. Otherwise, we continue making it... Converting that into ENA. Okay. So on the E and A front, can we look at the sustainable demand in India in coming year cycle? Yes, sir. So there is a gross consumption of almost about two eighty four cro liters of portable alcohol each year. So and there is a compounded growth of almost about 3% year on year. Of course, the last one year, there was a lesser growth, but the volumes will be available and us having long relationships with most of these portable co manufacturers of the indium foreign liquor companies, we will continue to harvest these relationships and supply more volumes to them at decent prices.

53:53 Next question is from the line of Jayashukla, an individual investor. Sir, my first question was regarding by way of selling our Badami plant, which is still a bit high. We we intend to recover approx $1.70 crores from the slum sale. So my question was how do we plan to, you know, deploy these funds? Will it be used for debt repayment or for other CapEx plans which are already going on?

54:42 So of that INR 170 crores, Anand, I can elaborate. Is a current outstanding of about INR 130 odd crores of debt there. So that INR 130 crores of debt will be repaid using INR 171 crores of the capital that we will receive. And the difference of about 40 crores, 40 odd crores, we will be utilizing it as working capital. Right. So we have one of $1.71 per expected duration, $1.25 per close to 70. So for the six karat, I just thought we will be utilizing on on direct direct on account of sale of the plant. Additionally, we'll be also able to save from this plant a good amount of expenses close to which we are incurring on annual basis, like interest on these terms of data, then your employee expenses. So that will close.

55:36 Will be close to $20.22 karat apart from there also. That will be completely utilized for the rationalization and the strategic initiatives of the plan to grow... Company to grow. Okay. Got it. Got it. And, what I understand, we also have a upcoming plant at Badami, which will be our CPG plant. So in that case, after selling ethanol plant, how will we... How do we plan to procure the feedstock for our Badami CPG unit? Sir, this is not the only CPG. This is not the only a plant which is located there because the CPG requires a And we we have many other plant based that that is a sugar built completely if you see the status of the sugar unit.

56:23 And there are a lot of many presentable based on the raw material study conducted by under the TV study. So there will be sufficient six to seven x of raw material available in the locality as a present for the manufacturing as a manufacturing of CBD. Plus plus your existing plant also will be delivered to whom it will be sold. We may ask from them also to supply a placement because that is also one of the player. Thank you. Next question is from the line of Nitinavasti from Incred Capital. Please go ahead. Hello, sir. Two questions from my side. The first one, there have been many changes in the tender, which is out from the the overseas.

57:12 One of which is the amount of capacity which you can bid for. There was a lot of hippie banquet happening by the players, and the bid amount by players used to be not correct. And hence, the ONC this time around have come up with a very particular calculation so that it is fair across the table. One, what is your thought process? How do you see this development? Number two, based on said calculation, what is the amount for which you can bid for? Right, sir. Thank you for that. So we have the basis for calculation. There are a few good things that they have done in the tender and a few things that we could not comprehend better.

58:05 But the good thing that they've done is they have removed the barriers on states. That is earlier, they used to have this concept called surplus state and deficit state. So the demand for the ethanol blending required for a particular state was to be met by the availability within that state. So it was an unfair ground for states like Connecticut, Maharashtra or Bihar where there is abundant food crops available. So they have done away with that. So now irrespective of states, we can supply to any places. And the basis for allocation, we have considered is eighty one working days in a month... In a quarter. And for eighty one and in a few quarters, it's eighty three working days.

58:53 And that multiplied by your consent to operate capacity will become your eligible volume for you to place your bids. So based on that, for us, TRUALT Bioenergy, we will have we have an installed capacity of about 2,000 kiloliters a day. That into eighty one into two and eighty three days into two quarters. So that should give us somewhere about... I haven't done that number. You would do that number, sir. Okay. So... Okay. So TRY 2,000 into 81 into four. And eighty three days for two quarters. Okay. Eighty three days for two quarters or 83 into two and eighty one into two, and that's your bid eligibility.

59:48 Correct? That's correct. That's correct. And we expect higher allocations for this ethanol supplier. Out of about 500 ethanol plants, about two thirty, 200 and... 20 to 30 odd plants, which are mono based will not be operating to capacity. So for example, last year, setup and we have a loan, there was a supply for almost about $3.80 odd crores of ethanol. That's almost about 30%, 38% of the last year's supplies. This year, that has almost become zero. So there's a ban on it. So allocation for dual feed based plants is going to increase, and a lot of plants which are mono based will not be put to use. So that should give us better opportunity to operate also.

1:00:37 Just the calculations, back of the hand calculation, means you can bid for about INR 66 crore liters? Correct, sir. Okay. Understood. The second question which I had was about the pricing of market driven ethanol products. Two prices during the call you have mentioned, one is your DDGS prices hovering at INR 28 to INR 30. One more price was your sea based E and A, sea molasses based E and A, which you said INR 63. Two more prices I wish to understand from you, how is the market seeing this and what are the trends in them? One is the grain based ENA and one is the industrial alcohol for chemical purpose. Right, sir. So usually, the price of ENA, so there's not much of a difference between grain or molasses base. Of course, it depends on the premium of the plant and the consumption pattern for the portable alcohol manufacturers.

1:01:39 But they are very cost conscious in the end, right? So a lot of people, irrespective of whether it's sourced from May or Vain or the thing, they... The priority is on price. But post that for certain companies like Galeo and certain company... Large companies also prefer have preference on the base of E and A. But the key driver would always be the price. So for us, we expect a better price of E and A for the current year because prices of raw material that's syrup and be heavy will not be diverted because the sugar prices have gone up really high. So it's about INR $45.48 of price of sugar right now. So it doesn't make any sense to divert behavior sugarcane juice even for that for E and A.

1:02:32 So there's a huge chunk of capacity that won't be participating in the supply of alcohol. So that leaves us opportunity for the green waste plants. So considering the demand of INR 1,100 crore liters in the current tender for OMCs and about INR $2.80 crore liters of average portable alcohol consumption, we will have more I mean, there is a crunch in the capacity available. So prices of E and A should improve. Okay. So I should rather see this as a total price increase rather than differentiate between different routes. Sure. For industrial alcohol, similar pattern? For industrial alcohol, again, the price of international ethanol also, earlier there used to be a lot of RS imports that used to happen.

1:03:22 But now the price of RS has already reached about, if I'm... If my memory serves me right, it's at about 58 to 60 rupees a liter. Earlier, that used to get around 47 to 48 rupees a liter landed into the country. So considering the jump in price, of course, there are different reasons for it. We see that there's a lot more opportunity for the Indian ethyl manufacturers to cater to this industrial alcohol demand. Understood, sir. And similar figure, if you could provide the demand for this in India, like you said, for alcohol, it's about $2.80 to 300? Currently, The does. Industrial industry. Yeah. For the industrial industry, it's some... Yeah.

1:04:09 It's about $2.50 to 300 per liters is the demand right now. And we expect that at least about 40% to 50% of it, I'm saying, with confidence, would be catered by the Indian manufacturers. Understood. So is that understanding correct that the three things weaving in together is pushing up the price of ENA? That's correct, sir. The... Understood. Thank you, sir. Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to mister Vijayanirani for his closing comments. Over to you, sir. Thank you so much, ma'am.

1:04:57 I thank all our shareholders for the trust and the faith that you've placed in us and that TRUALT. We will continue to make all efforts to bring value to all of you. Of course, we are an agro based industry. There will be challenges, but the support and the confidence that you have shown us, we will continue to make all efforts to keep building value to all of you. I thank you all for joining in for the call today, and thank you for the support. Thank you very much. On behalf of TruAlt Bioenergy Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.