Praj Industries Ltd (PRAJIND) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to the Praj Industries Limited's Q2 and H1 FY27 earnings conference call. 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. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you, and over to you, ma'am.
Purvangi Jain (Valorem Advisors): Thank you. Good afternoon, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the investor relations of Praj Industries Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings conference call for the second quarter and the first half of the financial year 2027. Before we begin, I would like to mention a short cautionary statement. Some of the statements made in today's earnings concall may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief, as well as assumptions made by and information currently available to the management.
Purvangi Jain (Valorem Advisors): and these forward-looking statements in making any investment decisions. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Now, let me introduce you to the management participating with us in today's earnings call and give it over to them for their opening remarks. We have with us Mr. Shishir Gaikwad, Managing Director, and Mr. Sachin Raole, Joint Managing Director and Chief Financial Officer. Without any further delay, I now request Mr. Shishir Gaikwad to begin his opening remarks. Thank you, and over to you, sir.
Shishir Gaikwad (Praj Industries Ltd): Good day, everyone. I welcome you to Praj Industries' earnings call of second quarter FY27 and the first half of FY27. Trust all of you had the opportunity to go through our results for the quarter and half year ended 30th September 2026. Despite challenging environment both domestically and in global markets, our results demonstrate resilience. We have delivered improved performance over the previous quarter. This is due to disciplined execution, increased volume, and a better mix. Our first-generation ethanol domestic business order booking was a mix of a few greenfield and mostly brownfield solutions. Our customers are prioritizing operational efficiency improvements and addition- additional value-added co-products such as distillers corn oil to improve their plant performance and profitability. There is also a visible trend towards feedstock diversification. Several customers are interested to add grain modules as an add-on to their sugar-based plants. This gives them an ease of switching to different feedstocks based on the market conditions, availability, and profitability. Essentially, Praj can offer a multi-feed and a multi-product solution to our customers for greater business flexibility. Earlier this week, Ministry of Road Transport and Highways has amended the Central Motor Vehicles Act, 1989, to legally recognize E100 or 100% ethanol as fuel for certified flex-fuel vehicles. We are closely monitoring the developments on this front, and this paves a way for ethanol capacity creation over a period of time. As a well-informed audience, you may know that the state-run oil marketing companies, or OMCs, have excluded sugarcane juice, sugar syrup, and B-heavy molasses from their recent ethanol procurement tenders for the 2026-27 supply year. This leaves C-heavy molasses along with approved grains like maize and broken rice as the permitted feedstock. As Indian ethanol producers face such feedstock variation challenges, Praj provides them the required operational flexibility with our proven design, decades of experience, and end-to-end solution and services to deal with this situation. On the greenfield project backlog execution, our customers continue to experience project funding challenges. Ethanol supply-demand imbalance has also impacted the project backlog conversion to revenues. Some projects in the backlog which were based on sugary feedstocks like juice, syrup, and B-heavy molasses are facing these challenges. We are discussing with our customers to find appropriate solutions, and we believe that the clarity will emerge by the end of this financial year. While greenfield projects in domestic markets experience a slowdown, we see parts of international markets developing positively. These markets include the USA, Brazil, Argentina, Southeast Asia, and Africa. We see an opportunity pipeline of approximately 1,000 crores developing over the next few quarters. While talking about biofuels, let me update you on the new area of establishing biofuel blending in diesel. We are making a steady progress on this subject. India's first bio-IBA plant, designed and engineered by Praj, is progressing well. The construction is expected to be completed by end of this year. In the meantime, various tests of bio-IBA blended in diesel on different diesel engines are underway.
Shishir Gaikwad (Praj Industries Ltd): dialogue, this is one of our focus areas. We continue to serve our customers installed base globally and domestically beyond the project delivery. We offer annual maintenance services, performance enhancers, digital plant services, spare parts, operations and maintenance services, and other critical services that help our customers to realize enhanced business benefits from their plant assets. Regarding our CBG business, we welcome the new GOBARdhan policy. This policy has created a strong interest in the market. We see a growth in our enquiry pipeline for napier grass, rice straw, and pressmud pressmud-based CBG plants. I am happy to share that our board of directors has given us an in-principle approval to invest up to 100 crores via our proposed JV with BPCL for setting up new CBG plants. On front of the sustainable aviation fuel SAF, the delivery of a detailed engineering package for ethanol to SAF plant for an international customer is progressing well. The final investment decision for this project is expected in quarter one of FY28. A favorable FID will create opportunities to supply equipment and modules for construction of this plant. We continue to pursue opportunities globally in this space and we are ready for the prime time. Moving on to our engineering businesses, on Praj GenX business, our world-class Mangalore facility is now approved by 18 international customers. We have signed four framework agreements which are operationalized. These opportunities are for large equipment and modular projects in traditional markets like oil and gas, fertilizers, LNG, et cetera. Precision fabrication for data centers is also emerging as a growth opportunity in the international as well as domestic markets. For our ZLD and PHS businesses, the conventional business is going steady. We are we see some new markets opening up and offer opportunities in the manufacturing of batteries, semiconductors, and solar cells. Praj has the portfolio to offer both the need for the ultra-high purity water as well as the wastewater treatment with a zero liquid discharge for ZLD facility mandated by the law. Overall, we believe the business environment is challenging, but improving. We are able to demonstrate the resilience and continue to invest in future business' growth simultaneously. We will continue to focus on our execution rigor while leveraging new opportunities on the horizon. With this, I will now hand over to Sachin for his comments on the financial performance. Thank you.
Sachin Raole (Praj Industries Ltd): Thank you, Ashish. Good day, everyone. Let me take you through the financial highlights for the quarter and half-year ended September 30th, 2026. The consolidated income from operations stood at Rs. 8.49 billion in quarter two of FY27 as compared to 8.42 billion in quarter two of the last year. PBT stood at Rs. 361 million in quarter two of FY27 as compared to 296 million in quarter two of last year. Similarly, profit after tax stood at Rs. 231 million in quarter two of FY27 as compared to 192 million in quarter two of last year. For half-year '27, income from operations was Rs. 16.6 billion as against 14.8 billion. PBT stood at Rs. 571 million in H1 of FY27 as against 392 million in HY FY26. PAT of Rs. 347 million in H1 of FY27 as against 246.2 million in H1 FY26. Export revenues accounted for 38%. Of the total revenue, 69% is from BioEnergy, 21% is from energy engineering, and 10% is from PHS business. The order intake during the quarter was 7.15 billion with 62% from domestic and 38% from international. And out of the total order intake, 57% came from BioEnergy, 26% from engineering, and balance 17% from PHS business. The order backlog as of September '26 is at Rs. 44.6 billion, comprising of 63% of domestic orders. Cash in hand as on 30th September is 5.33 billion. I now conclude my remarks and I would like to thank you all for joining us on this call. I wish you very happy Diwali in advance and we would be now happy to discuss
Sachin Raole (Praj Industries Ltd): any questions, or comments, or suggestions you may have.
Moderator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, please press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. [silence] First question is from the line of Atul Tiwari from J.P. Morgan. Please go ahead.
Atul Tiwari (J.P. Morgan): Yeah. Sir, thanks a lot. Sir, my question is on you know some more concrete color on order inflow outlook. So if okay, in this quarter just about 7.1 billion, it was on the weaker side. But even if we look at the past 12 months, it's about 33 billion rupees. So the question is that can it sustain at this level you know given whatever is happening in environment, and can it grow further, you know? So first the sustenance part that we will be able to maintain order inflows around this level. What is the confidence around that? And then what is the chance that we can grow next year on this base at least 10, 15%?
Shishir Gaikwad (Praj Industries Ltd): Yeah, thank you for your question. Yes, I think we have an opportunity to do better on the order bookings. You mentioned the numbers so I will not repeat it. But we do see opportunities developing in the second half of this year. And the three specific areas that I would like to highlight to the audience. The first one is of course the CBG and the opportunities are developing. We need to see which ones of these we can convert. But this is a growth area. The second is international market. I alluded to this point in my opening remarks. And we are not only looking at the ethanol market in India, but of course looking at the overall global markets and the specific areas where the blending mandates are coming up and therefore, opportunities developing for ethanol. And then the third one, which again, we mentioned in the opening remarks, is about the developing pipeline for our GenX business for equipment and modules. So when we look at these three specific areas, we believe that we should be able to see better order bookings in the second half of the year.
Atul Tiwari (J.P. Morgan): Good to know, sir. And sir, on on GenX business. So, obviously it's good to know that the facility has been approved by 18 customers and so on. But any kind of color on when can we see start of trickling down of orders? You know, so are we like few quarters away or few months away from when these you know, approvals start translating into the orders for us?
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