Trualt Bioenergy Ltd (TRUALT) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day and welcome to the Q2 and H1 FY '27 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. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference call over to Mr. Vijay Nirani, Managing Director. Thank you and over to you, sir.
Vijay Nirani (Trualt Bioenergy Ltd): 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. 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 material 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 will 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, we received an additional volume of 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 ethanol supply year, went up from 24.5 crore liters to 34.5 crore liters. And in addition to the 30, 34.5 crore liters, we also received an additional volume of 5 crore liters from the oil marketing companies taking the total volume to almost 40 crore liters for the supply for the last ethanol supply year. This leaves us to a average utilization of almost about 65% to 70% of a total installed capacity. Going forward, we expect that the capacity utilization increases, and we lock in an average capacity utilization of at least about 75% to 80%. The next tender for the ethanol supply year 2026-2027, starting from November up until October of 2027, has already been announced and the tender is out now. As expected, in the current tender for the next year, there is a ban on use of sugarcane juice as well as B-heavy molasses for making ethanol. That leaves a lot of pressure on grains for manufacturing of ethanol, and also C-heavy molasses. And that also means that close to about, out of about 500-odd ethanol plants in the country, close to 230-odd plants which are monofeed, using sugarcane derivatives as raw material, will not be able to supply continuous ethanol, or will will not be able to participate in the tender for a long, I mean, for a continuous supply. So, out of the total installed capacity of about 1,900 crore liters, there will be a shortage of about 300 crore liters coming in from the sugar-based ethanol plants. So, that leaves close to about 1,600 crore liters expected to be supplied for the current year. And of that 1,600 crore liters, considering ENA as well as the private the private consumption that is for the chemical industries, we expect that the allocations for the
Vijay Nirani (Trualt Bioenergy Ltd): 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 CBG, we have already commissioned our first CBG plant under the joint venture with Sumitomo Corporation. The 20 TPD 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 CBG business to four operating plants, that is one in leaf infinity, which is of 12 TPD, and three in TruAlt Gas TruAlt Sumi Gas Private Limited, which is a joint venture with Sumitomo Corporation. By the end of the quarter, we will have an installed CBG production capacity of about 72 metric tons a day. And going forward, we also plan to start construction of additional six units along with GAIL. That said, the CBG business look is going to be a big revenue driver or growth driver for TruAlt. Considering the GOBARdhan 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 planned in the CBG sector. In the sustainable aviation fuel business, our front-end engineering is ongoing and we were expecting that the policy for incentive and the roadmap would have been announced by now, but due to certain clarity required, we still don't see the roadmap coming in from the Government of India. Once the roadmap is out, we plan to start making capex for the sustainable aviation business. We have already received an incentive of about 150 crores as a viability gap fund under the PM JI-VAN Yojana for the proposed plant. Going forward, our fuel retail business, we have already set up about seven outlets and another four are nearing commissioning. But due to the concerns, or rather, the crude prices, the volatility in it, we are taking the further growth of 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. With that, I ask our CFO, Anand Kishorji, to take us through the results.
Anand Kishor (Trualt Bioenergy Ltd): Thank you, sir. Thank you for joining us for the Q2 and H1 FY27 results 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 FY27. Let me come front to the revenue performance. So, our top line Q2 of FY27 our revenue from operations stood at 811 crore compared with 115 crore in Q2 of previous year. This represents a very strong year-on-year growth of approximately 606%. On a sequential basis, revenue increased from 627 crore in Q1 FY27 to 811 crore in Q2, reflecting a continued improvement in operating operating activity. For H1 FY27, revenue from operations stood at approximately 1,438 crore compared with 419 crore in H1 of FY26, representing a growth of around 243%. The substantial improvement reflects a higher operating volume and improved utilization of our manufacturing capacities. On EBITDA performance, our EBITDA for Q2 FY27 was approximately 114 crore, translating into EBITDA margin of around 14.03%. In comparison, the company had reported a negative operating profitability in the corresponding year in corresponding quarter of the previous year. For H1 FY27, EBITDA stood at approximately 261 crore, with an EBITDA margin of approximately
Anand Kishor (Trualt Bioenergy Ltd): 0.2%. While the H1 margin remains healthy, the moderation in Q2 EBITDA margin compared with the first quarter is due to increase in the raw material prices during the quarter of damaged, 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 Q2 FY '27 stood at approximately 47 crore compared with a loss before tax of 49 crore in the Q2 of FY '26. This is a significant turnaround in profitability. Profit after tax for Q2 FY '27 was approximately 35 crore compared with loss of approximately 38 crore in the corresponding period last year. For H1 FY '27, PAT stood at approximately 94 crore compared with a loss approximately 33 crore in H1 of FY '26. The turnaround in profitability demonstrates the operating leverage available in our business as capacity utilization improves. On the cost structure front, we continue to focus strongly on the raw material efficiency and cost optimization. Finance cost for FY finance cost for H1 FY '27 was approximately 87 crore compared with the 76 crore in H1 of FY '26. The increase is primarily a function of funding structure with the scale of operations. Depreciation and amortization for H1 stood at approximately 49 crore. As our assets become increasingly productive, our focus is on ensuring that incremental revenues translate into a stronger cash generation and return on capital. One of the important areas for us is a cash generation. During H During H1 FY '27, the company generated approximately 192 crore of cash flow from operating activities. This is a positive indicator of underlying operating strength of the business. At the same time, we invested approximately 183 crore in the capex, including property, plant, equipment, and CWIP. The investment is aligned with our our strategy of strengthening and expanding our operating platform. Coming to the balance sheet. As of 30th September 2026, our total equity stood at 1,687 crore compared with the 1,578 crore during March 2026. Our debt equity ratio is approximately 0.55x, which continues to provide a reasonable capital structure for the scale of our operation. Importantly, we also see a meaningful reduction in certain working capital items. Inventory reduced from approx of approximately 580 28 crore in March '26 to 206 crore in September '26. Trade receivable also reduced from approximately 406 crore to 367 crore. These movement are positive from a working capital perspective and remain an important focus area for the management. During the first half, we continue to balance growth, investment with financial discipline. We generated 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 '27. 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 prioritized are: improve capacity utilization, optimize feedstock and product mix, improve EBITDA margin, strength operating work operating cash flows, reduce working capital requirements, and maintain disciplined capital allocation. We believe that our significant turnaround achieved in H1 FY '27 provides a strong foundation for the next phase of the growth. To conclude, Q2 FY '27 has been a quarter of strong revenue growth, a clear turnaround in the profitability, and healthy operating cash generation. 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 remain focused on profitable growth and strengthening the balance sheet while continue 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.
Moderator: 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 one on their touchtone 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.
Moderator: Yeah. The first question is from the line of Sukrit D. Patil from ISIGHT FINTRADE PRIVATE LIMITED. Please go ahead.
Sukrit D. Patil (ISIGHT FINTRADE PRIVATE LIMITED): Good morning to the team. I have two questions. My first question to Mr. Nirani is, following the massive 243% revenue surge in H1, just want to understand what forward volume guidance can you share for the next two quarters? As we build out Srikakulam SAF plant using the 150 crore PM JI-VAN grant, what major execution risk could delay commercial production, and what is our forward strategy to secure long long-term feed feedstock? Just want to understand your plan of action on this. That's my first question. I'll ask my second question after this. Yeah. Sure, thank you for that, sir. With regards to the expected volume that we plan to supply for the current quarter,
Vijay Nirani (Trualt Bioenergy Ltd): we Like I said, we had a offer for almost allocation for about 24.5 crores from the OMCs and in addition to that, we got about 15 crore L added for the last ethanol supply year. So in the current quarter, of that last year's allocation, ethanol supply year runs from November to October, and half of this quarter, that is October and November, will be supplied. And there was an extension already received. So, 2 months of this current quarter, we will be supplying from the last ethanol supply year only. So, we already have about 8.5 crore L 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 or I mean the allocation to supply that. In addition to that, for the new ethanol supply year, we expect an allocation of at least about 40 to 42 crore L. That is 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 the absolute picture. But for the current quarter, I can tell you that we have in hand about 8.5 crore L to supply and there'll be further addition that we will get. Thank you. My second question to Mr. Kishore is along the similar line.
Sukrit D. Patil (ISIGHT FINTRADE PRIVATE LIMITED): With Q2 revenue hitting a record INR811 crores, which is very good, what is our forward capex and debt guidance for the next quarters? As we simultaneously scale our multi-location CBG 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 point of view on this. Thank you.
Anand Kishor (Trualt Bioenergy Ltd): Yeah. Thank you, sir. So, your first question was on line of the capex to be planned for the upcoming quarter. So, we have already the there there will be no capex involved from the 1G ethanol point of front. The capacity will remain same. The major capex will flow towards the CBG. This CBG plant we we are expecting to commence in the next quarter close to three, four add-on plants for this capex could be start incurring, at least four to five plants, which which will have a project cost of around 60 crore per plant. So, that comes down to be 300 crore, and of which we are expecting this debt to be raised to the extent of additional 70 to 80 crore as a as a primary tranche of the first disbursement from on the term loan side of outstanding along with the JV partner with the GAIL. That is your first question reply. Can you please come back to the second question? Yes. The second question was
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