Operator: Ladies and gentlemen, good day and welcome to the Q2 and H1 FY27 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. Now on the conference call, over to Mr. Vijay Nirani, managing director. Thank you, and over to you, sir.
Vijay Nirani: A very good morning to everyone. Thank you for joining this conference call. I am happy to report the Q2 numbers for the financial year 2027. There has been a growth in our revenue numbers. The results have been posted, and as expected, the prices of raw material 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 of our 24 crore liters of allocation from the public oil marketing companies.
Vijay Nirani: We received an additional volume of 10 crore liters, thanks to the Supreme Court judgment in the month of August. With that, our total supply, or rather the allocation for the last ethanol supply year, went up from 24.5 crore liters to 34.5 crore liters. In addition to the 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 leads us to an average utilization of almost about 65% up to 70% of our 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%.
Vijay Nirani: 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. That also means that 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 not be able to participate in the tender for continued supply.
Vijay Nirani: 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. That leaves close to about 1,600 crore liters expected to be supplied for the current year. Of that 1,600 crore liters, considering ENA as well as 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 Niño 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 is on the ethanol front.
Vijay Nirani: 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 is being ramped up to capacity. The other two plants will be put to use within this quarter. That takes the entire CBG business to four operating plants. That is one in Leafiniti, which is of 12 TPD, and three in 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. Going forward, we also plan to start construction of additional six units along with GAIL. That said, the CBG business is going to be a big revenue driver or growth driver for TruAlt.
Vijay Nirani: 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 plan 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 do not 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 fuel business. We have already received an incentive of about INR 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.
Vijay Nirani: 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 is good returns. With that, I ask our CFO, Anand Kishore Ji, to take us through the financials.
Anand Kishore: Thank you, sir. Thank you for joining us for the Q2 and H1 FY27 result discussion for 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 of the revenue performance. Our top line Q2 for FY27, our revenue from operation stood at INR 811 crore, compared with INR 115 crore in Q2 of previous year. This represents a very strong year-on-year growth of approximately 606%. On a subsequent basis, revenue increased from INR 627 crore in Q1 FY27 to INR 811 crore in Q2, reflecting a continued improvement in operating activity. For H1 FY27, revenue from operation stood at approximately INR 1,438 crore, compared with INR 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 capacity.
Anand Kishore: On EBITDA performance, our EBITDA for Q2 FY27 was approximately INR 114 crore, translating into EBITDA margin of around 14.03%. In comparison, the company had reported a negative operating profitability in the corresponding quarter of the previous year. For H1 FY27, EBITDA stood at approximately INR 261 crore, with an EBITDA margin of approximately 18.2%. 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 the May, 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 FY27 stood at approximately INR 47 crore, compared with a loss before tax of INR 49 crore in the Q2 of FY26. This is a significant turnaround in profitability.
Anand Kishore: Profit after tax for Q2 FY27 was approximately INR 35 crore, compared with loss of approximately INR 38 crore in the corresponding period last year. For H1 FY27, PAT stood at approximately INR 94 crore, compared with a loss approximately INR 33 crore in H1 of FY26. 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 H1 FY27 was approximately INR 87 crore, compared with the INR 76 crore in H1 of FY26. The increase is primarily a function of funding structure with the scale of operations. Depreciation and amortization for H1 stood at approximately INR 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.
Anand Kishore: One of the important areas for us is the cash generation. During H1 FY27, the company generated approximately INR 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 INR 180 crore in the CapEx, including property, plant, equipment, and CWIP. The investment is aligned with our strategy of strengthening and expanding our operating platform. Coming to the balance sheet. As of 30 September 2026, our total equity stood at INR 1,687 crore compared with the INR 1,578 crore during March 2026. Our debt equity ratio is approximately 0.55 times, which continues to provide a reasonable capital structure for the scale of our operation. Importantly, we also seen a meaningful reduction in certain working capital items. Inventory reduced from a maximum of approximately INR 528 crore in March 2026 to INR 206 crore in September 2026.
Anand Kishore: Trade receivable also reduced from approximately INR 406 crore to INR 367 crore. These movements are positive from a working capital perspective and remain an important focus area for the management. During the H1, we continued to balance growth investment with financial discipline. We generated strong operating cash flows 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 H2 of FY27. 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 improve capacity utilization, optimize feedstock and product mix, improve EBITDA margin, strengthen operating cash flows, reduce working capital requirements, and maintain disciplined capital allocation.
Anand Kishore: We believe that our significant turnaround achieved in H1 for 2027 provides a strong foundation for the next phase of the growth. To conclude, Q2 FY27 has been a quarter of a strong revenue growth, a clear turnaround in the profitability, and healthy operating cash generations. 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 thank all our shareholders, lenders, business partners, and employees for their continued confidence and support. I will now hand over the call for the question and answer session. Thank you.
Operator: 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.
Anand Kishore: Yeah.
Operator: The first question is from the line of Sukrit D. Patel from RSI Trendtrade Private Limited. Please go ahead.
Sucrit D. Patil: Good morning to the team. I have two questions. My first question to Mr. Nirani is, following the massive 2.3% revenue surge in H1, just want to understand what forward volume guidance can you share for the next two quarters. As we build out the Srikakulam SAF plant using the INR 150 crore PM JI-VAN grant, what major execution risk could delay commercial production, and what is our forward strategy to secure long-term feedstock? Just want to understand your plan of action on this. That's my first question. I'll ask my second question after this.
Vijay Nirani: Yeah, sure. Thank you for that, sir. With regards to the expected volume that we plan to supply for the current quarter, like I said, we had an offer for almost allocation for about INR 24.5 crore from the OMCs. In addition to that, we got about 15 crore liters added for the last ethanol supply year. 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, we'll be supplying. There is an extension already received. So two months of this current quarter, we will be supplying from the last ethanol supply year only. 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.
Vijay Nirani: We have the required raw material as well as 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 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 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.
Sucrit D. Patil: Thank you. My second question to Mr. Kishore is, along the similar lines with Q2 revenue hitting a record INR 811 crore, 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 flow? Just want to understand your point of view on this. Thank you.
Anand Kishore: Yeah. Thank you, sir. Your first question was on line of the CapEx to be planned for the upcoming quarter. We have already. There will be no CapEx involved from the 1G thrust point of run. The capacity will remain same. The major CapEx will flow toward the CBG. This CBG plant, we are expecting to commence in the next quarter, close to three, four add-on plants where this CapEx will be start incurring, at least four to five plants, which will have a project cost of around INR 60 crore per plant. That comes out to be INR 300 crore, and of which we are expecting this debt to be raised to the extent of additional INR 70 to 80 crore as a primary tranche of the first disbursement on the terminal side of outstanding, along with the JV partner, with GAIL. That is your first question reply.
Anand Kishore: Can you please come back to the second question?
Sucrit D. Patil: Yes. The second question was, as we simultaneously scale our multi-location CBG project, what risks do you foresee to the working capital cycle, and what forward financial controls are in place?
Anand Kishore: Yeah, sir. Because the entire expansion is on the CBG front, working capital, there is hardly any requirement for a CBG plant or your working capital. The working capital is not going to impact much because the major working capital with these plants will either run through the press mud or spent wash of the CBG plant. The press mud costs you hardly anything. That is where this CBG business cuts margin line with the EBITDA margin of around 60% to 70%. In our existing plant also, we have hardly working capital of 10 TPD plant with INR 2.5 to 3 crore.
Anand Kishore: Even if it works out to be 100 TPD plant by the end of the financial year, I assume there will be a maximum requirement of working capital, which can rise to INR 25 to 30 crore, against which you will be generating a better revenue against this working capital. The working capital will never be a challenge from that point of view. As far as the risk mitigation is concerned as a stretching. The overall side, the risk mitigation will be taken care by these CBG plants only because compared to CapEx, the return in this business is very high, which we have proved in our last seven to eight previous quarters also.
Anand Kishore: Going forward, the same tandem will be maintained with the minimal working capital requirement, which we are doing here, and also the debt amount of INR 80 to 100 crore, what I was telling you, which will be again subdued by way of interest subvention, capital subsidy which we will be receiving from under the GOBARdhan scheme. Today itself, for our all the plants, we are eligible for the capital subsidy of close to INR 2 crore per TPD. This will be directly reducing the term debt of the company, and we are right now eligible for 25% of these capital subsidies based on our consent to operate license. All those things will be entirely subdued by way of a capital subvention and the profit to be generated from this business. Thank you.
Sucrit D. Patil: Thank you, and best wishes.
Anand Kishore: Thank you.
Operator: Thank you. Next question is from the line of Tasha from Sapphire Capital. Please go ahead.
[Analyst] (Sapphire Capital): Hello? Hello? Am I audible, sir?
Operator: You are audible, ma'am.
Vijay Nirani: Yes, ma'am.
[Analyst] (Sapphire Capital): Yes. Thank you so much, sir, for this opportunity. Couple of questions, sir. Firstly, what is the ethanol volume this quarter?
Vijay Nirani: For the current quarter, ma'am, like I said. Yeah, go on, sir.
Anand Kishore: For this quarter, you want to say for H1 FY27, we have sold the total volume of ethanol, what we have sold is close to Q1, we have sold 8.29 crore, and Q2, we have sold 10.78 crore. So for the entire H1, we have sold 19.07 crore liters of ethanol. Again, for this, what sir was telling, we have already a pending orders to dispatch close to 8.5 crore liter, other than the fresh allocation which we are about to receive.
[Analyst] (Sapphire Capital): Right. Okay, fair enough. Sir, also just wanted to. You mentioned that we are seeing a lot of raw material pressure, right? But going 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 shaped. Is there any way for us to pass on this increase in raw material and protect our margin?
Anand Kishore: So even though if you say the ban is done, let me come to the point where sugar prices in the market is INR 50 for the INR 52. Be it be any sugar player, even though for them also, even though it would have been banned, they would have preferred to sell it outside the raw sugar rather than diverting it to the industry, because the profit margin they will be getting might be better than that there, right? So as far as for us to make a rationalize on the cost benefit and more margin is to use a better product mix and higher the capacity utilization.
Anand Kishore: So we have a plan where we are trying to store these maize and the rice and our rices at the lowest of its price and accumulating at the various locations by storing a godown concept and storing it at a proper place, so that even though during this quarter it goes at the peak of it, the price, we will be able to maintain the maximum EBITDA margin at least to sustain at the present level what we are maintaining.
[Analyst] (Sapphire Capital): The margin that we have done for ethanol this quarter is going to be the base. It should only increase up from here on.
Vijay Nirani: It will increase from here on. Usually Q2 is the most difficult period because that is when summer is over and there is not much of raw material agrarian products available. So whatever the Q2, whenever each of the years will have the lowest margins. It should improve from Q3, Q4 onwards.
[Analyst] (Sapphire Capital): So, sir, on an average for this year, what sort of margin should we expect for the ethanol business?
Vijay Nirani: I may not be able to give you an absolute number, but once the tenders are allocated, we might expect maybe a 1% or 2% drop in the EBITDA margins of the average that we have been doing so far.
[Analyst] (Sapphire Capital): Okay. Sir, on the CBG side, just wanted to understand the other two plants that are going to commission by the end of Q3. Are they on track? For this quarter, I think last year we had received some subsidy. What was the amount that quarter and what was the subsidy amount that you were supposed to receive for this quarter?
Vijay Nirani: Anand, do you want to take that?
Anand Kishore: Yeah. The subsidy amount on the CBG front, we are commencing three plants of TruAlt Bioenergy Private Limited in JV with Sumitomo. These three plants constitute INR 180 crore of turnover. The subsidy it is eligible is INR 2 crore per TPD, so 60 into 2 works out to INR 120 crore. Out of INR 120 crore, we are right now eligible for INR 20 to INR 25 crore of subsidy out of this based on our consent to operate license. For the quarter, or even say, bare max of a timing of another for the next quarter, first or second month by itself, we are definitely expecting 25% of INR 120 crore, means you can work out to close to INR 30 crore of subsidy we are expecting by December or January.
[Analyst] (Sapphire Capital): Okay. Sir, the one plant with SM which we have commissioned with CBG 20 TPD, how is the ramp-up of that going? What sort of utilization are we targeting for this year? For the other two that will be commencing, what sort of utilization should we look at for this year?
Anand Kishore: That will add to the. You can say, if it is that you will track the full set revenue from the month of January. That will add up one quarter of revenue. One quarter of revenue, presently, if you see our existing plants, that comes around to INR 10 crore. Even that works out to INR 10 crore, one quarter, so it will add a minimum revenue of INR 10 to INR 15 crore, existing one plant, and adding also another two plants for the past year, it will add another revenue of INR 10 crore because that is also picking up ramp-up. We believe that INR 20 crore of CPG segmental revenue will come from these two to three plants during the financial year, means coming to the next two quarters.
[Analyst] (Sapphire Capital): Okay. Sir, for this INR 15 crore, out of that INR 10 crore we already, what is the update on the rest INR 5 crore? When are we expecting that allocation to happen? Any sort of color on that?
Vijay Nirani: No. Like I said, we have received allocation already. There is a clarity on it.
[Analyst] (Sapphire Capital): Okay. This is the INR 10 crore.
Vijay Nirani: Out of the INR 15.49 crore. Yes.
[Analyst] (Sapphire Capital): Okay. Fair enough. That will be it from my side. Thank you.
Vijay Nirani: Thank you, ma'am.
Operator: Thank you. Next question is from the line of Prathamesh Savant from Abacus Investment Managers. Please go ahead.
Prathamesh Sawant: Yeah, hi. Hi, Vijay, sir. Good afternoon. Just two small questions from my end, sir. In the current quarter, do we have build-up for any inventory for the Q3 orders that we have? Is there any raw material inventory build-up in Q2?
Vijay Nirani: Yes, sir. Thank you for the question. We have a visibility already. For that 8.5 crore liters, we already have the required raw material tied up. Because the raw material was purchased during Q2 and the order also was received only in the month of August, the cost of the raw material was at a higher side. The margin will be a little lower, but we already have the visibility on the raw material. Rather, the raw material is tied up.
Prathamesh Sawant: Okay. The effective Q2 margin should be slightly upwards of 12%, because that has some element of the raw material prices also into this.
Vijay Nirani: You mean in Q3, sir?
Prathamesh Sawant: No, in Q2 margins.
Anand Kishore: There will be some raw material.
Prathamesh Sawant: Yeah.
Anand Kishore: Yeah, Q2, we had the impact of definitely the increase in the price of raw material picked up by 25% close to in the terms of maize. Although this was a bad quarter, this was a neutral season for the industry also because there is hardly a supply of the raw material during the quarter. Again, Q3 and Q4 is a seasonal business where this again, the EBITDA margin will bounce back to a reasonable level.
Prathamesh Sawant: Okay. Volume-wise, we can go north of the current Q2 quarter because we already have 8 crore commitments plus probably the next ethanol suppliers, 40 crore. Also some elements will be coming in the November or December end. Can we see volume uprise on the current quarter numbers as well over here?
Vijay Nirani: Yes, sir, we expect that. Since we already have 8.5 crore liters of order, we expect at least about 6 to 7 crore liters of additional volume. That is in the month of November. We will have November and December alone, right, for the current quarter. So we expect a few more crore liters to get added, but that will depend based on the allocation that we receive. There will be a growth, is the expectation.
Prathamesh Sawant: Okay. Fair enough. Lastly, sir, on the El Niño front, we have been hearing that the southern part of the country will be affected with the El Niño more, so where is our raw material procurement coming from? Do you see any risk built into this where the prices of raw materials stay elevated for the next entire financial year?
Vijay Nirani: Yes, sir. 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 have been seeing there is a big rally in the prices of all these commodities.
Vijay Nirani: The year next, there is expected drop of about 35% in maize availability. And rice, there is expected drop of about 10% to 12%. And sugarcane, there is a drop of about 10% to 12% again. That will squeeze the margins a little because the price of raw material will increase. That said, thanks to the support of all you shareholders, we could convert three of our plants into grain-based, which can take multiple feedstock, and also have the working capital limits now. We will be sourcing raw material from across the country. That is Bihar or Madhya Pradesh is a big place. Punjab is a big place for us to procure raw material. We have already started looking for sourcing warehouses and stocking up the raw material required.
Prathamesh Sawant: Okay, sir. Fair enough. Thank you, sir.
Operator: Thank you. Next question is from the line of Udit Sehgal from PinPointx Capital. Please go ahead.
Udit Sehgal: Yeah, good afternoon, sir, and congratulations for the good result. Sir, 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. What exactly is the intent and till what percentage are we planning to add?
Vijay Nirani: Legally, we are allowed to go up to 75%, sir. The idea was to try and increase our holding as much as possible. But we are almost at about 71.6% now, and we have a margin of about another 3.5% to 4%. We hope eventually we keep continuing to build the holding.
Udit Sehgal: 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?
Vijay Nirani: For the future purchases.
Udit Sehgal: For the future purchases. Okay, got it. Secondly, sir, on the CBG front, could you educate us on what the changes have been from the previous policy, how the margins or the subsidy has gone up? Because we saw in the private market, companies like Gruner, they are getting a valuation of, say, $5 billion, and they are building out 1,000 TPD. So what exactly are we planning to do? What are our plans for the midterm and long term, since the government has given such a big push into CBG?
Vijay Nirani: Yes. CBG is going to be a big growth opportunity for the entire country. The new policy, that is GOBARdhan 2.0, there is 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. Earlier, there was a cap of about INR 10 crores per project, and the subsidy was, for a 10 TPD plant, it used to be at about INR 8 to 10 crores. Now, the subsidy is increased from INR 1 crore per ton to almost INR 2 crores per ton. It is doubled. And there is a cap of about INR 30 crores per plant. Not per company, per plant. So, let us say for a 10 TPD plant now, instead of having a INR 10 crore subsidy as earlier, now we will have INR 20 crores of capital subsidy.
Vijay Nirani: Along with that, the price of gas is now assured for another 10 years. There is an assurance of takes. There is a take or pay clause already that has come in, which is favorable to the producers. Say 90% of whatever we produce, there is a condition that the OMCs will have to buy. And for 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 has come in. 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 INR 116 to INR 120 a kilo also. And, along with that, the sector is classified as a priority sector now.
Vijay Nirani: For MSMEs, there is the government guarantee for loans and things like those. So, overall, there is a huge push for the CBG sector, and we hope to take as much as benefits that we can.
Udit Sehgal: 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 250 TPD, if I am not wrong?
Vijay Nirani: Yes, sir. In entirety, it would be.
Udit Sehgal: Okay. Any plans to go further on that? We see there is so much scope, and from our calculations, I think in the next 3 to 4 years, maybe the country may be requiring almost 1 lakh of TPD. What would be our plans? What kind of market share could we get?
Vijay Nirani: Yeah. Right now we have visibility on these 250 metric tons. Beyond that, of course, we have expectation to keep building, but 250 is almost about 20, 24 plants, right? There is still a lot of work to do, and we have only now commissioned about 4 plants commissioning, and the rest plants will begin construction. Over 2 years, we will see a lot of investments in that.
Udit Sehgal: Okay, sir. Got it. On the ethanol front, I am a bit confused with the government policy. They will not get ethanol from, or there is a shortage of sugar, so they did not want the sugar to be diverted to ethanol. Logically, should not they have given more incentives for the maize producers to give more volumes?
Vijay Nirani: Exactly, sir. Should have definitely done that, considering the prices that has increased. They should have increased the price of maize-based ethanol. In fact, they have reduced the price by almost INR 3 a liter.
Udit Sehgal: And-
Vijay Nirani: We do not see the logic in it, but it is what it is now.
Udit Sehgal: Will they be able to still get the full allocation? Won't the maize ethanol producers be protest about it or whatever, looking at the scenario?
Vijay Nirani: The industry has already raised concerns on the same subject, and we have reached out to the policymakers and the OMCs. We hope that there is some kind of a revision in the prices to support. I am not sure as of now what people are thinking, but we expect that there could be some correction.
Udit Sehgal: Okay. Okay, sir. Thank you so much, and best of luck.
Vijay Nirani: Thank you, sir.
Operator: Thank you. Next question is from the line of Bhavya Gandhi from Bajaj Alternate Investments. Please go ahead.
Bhavya Gandhi: Yeah. Hi. Thanks for the opportunity. My first question is regarding the ethanol. What is the realization currently? Just wanted to understand because we went into dual feed grain-based raw material procurement so that we do not see this kind of RM fluctuation, right? That was the thought process. But in the current quarter, we have seen INR 18 rising to INR 25. 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 will be really helpful. That is the first question. Yeah.
Vijay Nirani: Yes. The whole objective of becoming dual feed is to have the flexibility of different kinds of feedstock. We know that in different years there will be different availability on the raw material side. One, achieving flexibility, we have already seen that. Also, if you look at historic cycles, there has always been a drought-like situation once in every 5 years. We see the impact now for the El Niño. In the current year, there is a shortage in the availability of raw material that I just explained earlier also. Going forward, that should correct itself, and we will come back to normalcy. But in years like these, we expect better prices so that our margins can improve. That is the expectation from the government.
Vijay Nirani: 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.
Bhavya Gandhi: Got that, sir. What could be the average realization for ethanol combined and for maize combined? In your experience, what could be the average realization? Similarly, on the raw material side, both the key raw materials, blended average realization. Just to understand what would be the EBITDA per kg or per liter fluctuation, just to get that understanding.
Vijay Nirani: Right, sir. If I were to take a guess, of course, this is subject to the allocation. But if I were to take a guess, the average realization this year, let's say maize-based ethanol is at around INR 68 odd rupees a liter. Also there is a ban on sugarcane juice and B heavy molasses. So ethanol derived from damaged food grains is at about INR 64 and from FCI rice is about INR 60. So I expect an average blended rate of about INR 64 to INR 65 from the past years, which was at about INR 67. That is about a 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 continue to be higher, going forward.
Bhavya Gandhi: 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. Going forward also, what could be your expectation?
Vijay Nirani: Right, sir. 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.
Bhavya Gandhi: That would be the peak levels, right? You do not expect it to go beyond that.
Vijay Nirani: We hope for that, sir. Again, it depends on the availability, but also considering the cost of carry, all of this should be somewhere around that number.
Bhavya Gandhi: Got it. Sir, my second question is regarding how do we intend to repay the pledged amount? What are the sources of funds that we have in personal capacity? Yeah, please, if you can just explain that as well.
Vijay Nirani: I know that is irrelevant for the company right now, but as management, we have got different sources of capital, so it is irrelevant for now.
Bhavya Gandhi: Okay. That is not an issue, right? What is the haircut price, if at all, that you would have raised the money at?
Vijay Nirani: It's a personal loan that I've taken, but that shouldn't bother or shouldn't affect the company by any means.
Bhavya Gandhi: Fair enough, sir. Just on the CBG part, sir, just wanted to understand. Currently, you're doing INR 20 crore revenue per quarter. That is closer to INR 80 crore revenue per annum for the 10 TPD, right? So for 20 TPD at full utilization, can we expect INR 150 to INR 160 crore at INR 84, assuming that INR 84 holds true?
Vijay Nirani: No, correction there. We are doing an average of about INR 40 to INR 45 crore of turnover from a 10 TPD plant. That's almost about INR 4 to INR 4.5 crore of revenue per ton. Expect a similar price, I mean, revenue, to continue, because earlier there used to be something called a Market Development Assistance. That's a subsidy on the manure that we used to sell. That has been discontinued now. Instead of that, the government is now giving a higher price for the gas. That's from INR 84 to INR 104 or INR 115, depending on the purity. So that should average out your revenue cycles, and the revenue per ton should continue to be at somewhere around INR 4 to INR 5 crore. Let's say INR 4 to INR 4.5 crore per ton.
Bhavya Gandhi: Fair enough. So that would be closer to INR 80 crore of top line on full maturity, I mean, on full utilization from one 20 TPD plant, yeah? 60% is the realistic EBITDA?
Vijay Nirani: No, correction again, sir.
Bhavya Gandhi: Yeah.
Vijay Nirani: For a 20 TPD plant, we should get somewhere about INR 80 crores. So, we have three plants being commissioned now. So, that's about
Bhavya Gandhi: Right. INR 80 to 20 crores, right?
Vijay Nirani: Correct. Yeah.
Bhavya Gandhi: Yeah. The 60% is the realistic EBITDA one should work with, broadly?
Vijay Nirani: That is the track record that we have had so far, but you can keep it somewhere around 50% to 55% is what we are expecting.
Bhavya Gandhi: Okay, fair enough. At INR 104, what could be the EBITDA levels, at least if you can provide on the INR 104 realization?
Anand Kishore: Sir, it will be almost at the same level, sir, because as sir told, MDA is discontinued and the gas price has increased. 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 when it is fully operational and at the peak capacity, a little better than what I am getting now.
Bhavya Gandhi: Got it. Fair enough. Thank you so much. Really appreciate your answers. Thank you.
Operator: Thank you. Next question is from the line of Marmik Khandelwal from Earth AIF. Please go ahead.
Marmik Khandelwal: Thank you for the opportunity. How many days of maize inventory did we have as on 26 March? Going forward, do we see our margins going down as till now we would have been able to manage the margins in H1 due to lower price maize inventory stock or it is out of theory?
Anand Kishore: Yeah. What is your question, sir? How many days?
Marmik Khandelwal: How many days of maize inventory did we have as on 26 March?
Anand Kishore: Okay. As on 26 March, it is available, sir, as on 26 September. As of March, if you see, as of March, my inventory level was outstanding somewhere around INR 500 crore, and today, if you see, it is around INR 230 to INR 240 crore. That is the inventory level we have in the books as on compared to March and September. This inventory will be out of the book once this, you can say, the season is starting. We have already existing 8.5 crore liter of orders in hand right now. This order and with the additional order coming up, this existing inventory level of close to, as on 26 September, which is around INR 380 to 90 crore of levels. That will immediately convert to sales.
Anand Kishore: 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.
Marmik Khandelwal: Okay. As on 26 March, I believe we must have inventories of sugar and maize both. Going forward, we will only have inventory of maize, right?
Anand Kishore: Yeah, we will have inventory of maize only going further because this is, if you see our previous quarter. Yes, sir.
Marmik Khandelwal: We will have inventory of maize as well as rice. The maize food rice.
Anand Kishore: Yes. Maize and rice, because sugar is not on this, so maize and rice will be the only inventory.
Marmik Khandelwal: Okay. Thank you. I have heard that realization in maize-based feedstock has decreased to approximately INR 68 from INR 70 and INR 78. Is it right or is there something else in it?
Vijay Nirani: Sorry, I did not hear that. Could you
Marmik Khandelwal: Sir, what is the realization from maize-based feedstock this year?
Vijay Nirani: We will be able to predict that. That is based subject to the allocation. But out of the 8.5 crore liters that is pending, we still have around 4.5 crore liters to be supplied for the current quarter. That is the past orders already. But only when we have the allocation for the next year, we will be able to share.
Marmik Khandelwal: Okay. Thank you. That is it from my side.
Vijay Nirani: Thank you.
Operator: Thank you. Next question is from the line of Satyam Chaudhary, individual investor. Please go ahead.
Satyam Chaudhary: Hello, am I audible, sir?
Operator: You are audible, sir.
Satyam Chaudhary: Yes. Sir, my question is regarding if you can provide me with the gross margins specifically for ethanol segment, average gross margins around the year, what we can expect.
Anand Kishore: You are asking for the upcoming period?
Satyam Chaudhary: Yes, for upcoming period.
Anand Kishore: Okay. As our MD was telling, this will solely depend upon the kind of allocation which we will be getting. What we are expecting is INR 45 per liter, based 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 at this juncture because I have only 8.5 crore liter of order to be supplied. Once this ESY is over, then we will be in a better situation to reply your answer the question.
Satyam Chaudhary: Any range you can provide, not a particular number. Any range you can provide me?
Anand Kishore: Sir, we are not supposed to comment these numbers.
Satyam Chaudhary: Okay.
Anand Kishore: But right now my present gross margin is close to 37%. You can do some plus minus what can be between that two. But presently my GPM is 37%.
Satyam Chaudhary: Okay. Thank you. Great, sir. Other question is regarding are we looking to expand ourselves into DDGS byproducts?
Anand Kishore: Sir, there is no need to expand there because we are already getting a substantial income from the DDGS at least, which is marketed price at INR 26, INR 27 per kg. So that is already additional income we are getting as a byproduct when we are using the maize-based feedstock as for the production of ethanol. That's a good amount of contribution in the top line as well as the bottom line because, in terms of bottom line, it will not incur any additional cost or overhead expenses there. That's a byproduct income.
Satyam Chaudhary: Okay, sir. Getting it. The other question I have is as we have 65% of dual feed capacity, the remaining capacity which we have is basically for sugar-based itself. So how are we looking to get capacity utilized over that 35%?
Anand Kishore: Yes. So balance 1,300 KLPD is already dual feeder. If you will see one of the plant, which is again a 400 KLPD plant, where again the C molasses are not banned. Only B heavy molasses and syrup is banned. So we are dedicating one plant completely for the utilization of the C-based molasses also, other than we have the option to use it as our 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 presently during the quarter it was 62%, and during the H1 also it was around 64%-65%. So capacity utilization will not be a challenge.
Satyam Chaudhary: Okay, sir. Getting it. Thank you. Last question, sir, is regarding if you can tell me ENA realization, like we are selling for ENA also, so about realization for ENA particularly.
Vijay Nirani: Yes, sir.
Satyam Chaudhary: ENA.
Vijay Nirani: I will take it.
Satyam Chaudhary: Yes, sir. Please.
Vijay Nirani: There is a good increase in the price of ENA already. We are looking at prices for long contracts at about INR 62 to INR 63 a liter. Cost of producing ENA is almost cheaper by INR 1.5 to INR 2 a liter. It makes more sense to make ENA. As Anand was mentioning, our other two units, at least of that 400 KLPD, we propose to run it on ENA for the whole year using the C heavy molasses. That is the expectation. Whatever, if there is an increase in the price of ethanol based from C heavy molasses, then we convert that into ethanol. Otherwise, we continue converting that into ENA.
Satyam Chaudhary: Okay. On the ENA front, can we look at the sustainable demand in India in coming years, if I can?
Vijay Nirani: Yes, sir. There is a gross consumption of almost about 280 crore liters of potable alcohol each year. 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 potable alcohol manufacturers of the Indian and foreign liquor companies. We will continue to harvest these relationships and supply more volumes to them at decent prices.
Satyam Chaudhary: Okay, sir. Thank you. This was all from my side.
Vijay Nirani: Thank you, sir.
Operator: Thank you. Next question is from the line of Jay Shukla, an individual investor. Please go ahead.
Jay Shukla: Sir, thank you for the opportunity this time. Sir, my first question was regarding, by way of selling our Badami plant, which is Unit 5. We intend to recover approximately INR 170 crores from the slump sale. My question was, how do we plan to deploy these funds? Will it be used for debt repayment or for other CapEx plans which are already going on?
Vijay Nirani: Of that INR 170 crores, Ananta can elaborate. There is a current outstanding.
Anand Kishore: Yes
Vijay Nirani: 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. The difference of about INR 40-40 odd crores, we will be utilizing it as working capital.
Anand Kishore: Right. So we have out of INR 171 crore expected realization, INR 125 crore close to term loan is outstanding. So for the INR 6 crore additional, we will be utilizing direct on account of sale of the plant. Additionally, we will 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 term loans. Then there are employee expenses. So that will close, saving will be close to INR 22 crore apart from there also. That will be completely utilized for the rationalization and strategic initiatives of the company to grow.
Jay Shukla: Okay, got it. And sir, what I understand, we also have an upcoming plant at Badami which will be our CBG plant. So in that case, after selling ethanol plant, how do we plan to procure the feedstock for our Badami CBG unit?
Anand Kishore: Sir, this is not the only CBG, this is not the only plant which is located there because the CBG requires a press mud, and we have many other planters. That is a sugar belt completely. If you see the stretches full of the sugar units. There are lot of many press muds available based on the raw material study conducted under the TV study. So, there will be sufficient 6 to 7 acres of raw material available in the locality as a press mud for the manufacturing of ethanol. Sorry, manufacturing of CBG. Plus your existing plant also will be there to whom it will be sold. We may ask from them also to supply a press mud because that is also one of the player.
Operator: Thank you. Next question is from the line of Nitin Awasthi from InCred Capital. Please go ahead.
Nitin Awasthi: Hello, sir. Two questions from my side. The first one, there have been many changes in the tender which is out from the OMCs. One of which is the amount of capacity which you can bid for. There was a lot of hanky-panky happening by players and the bid amount by players used to be not correct. Hence, the OMCs 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?
Vijay Nirani: Right, sir. Thank you for that. 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. But the good things that they have done is they have removed the barriers on states. That is, earlier they used to have this concept called surplus state and deficit state. The demand for the ethanol blending required for a particular state was to be met by the availability within that state. It was an unfair ground for states like Karnataka, Maharashtra or Bihar, where there is abundant food crops available. They have done away with that. Now, irrespective of states, we can supply to any places. The basis for allocation they have considered is 81 working days in a quarter.
Vijay Nirani: For 81 and in a few quarters, it is 83 working days. That multiplied by your consent to operate capacity, will become your eligible volume to place your bids. Based on that, for us, TruAlt Bioenergy, we have an installed capacity of about 2,000 KLPD. That into 81 into two and 83 days into two quarters. That should give us somewhere about I haven't done that number. Nitinji, you could do that number, sir.
Nitin Awasthi: Okay, so 2,000 KL into 81 into 4.
Vijay Nirani: 83 days for 2 quarters.
Nitin Awasthi: Okay, 83 days for 2 quarters. So 83 into 2, and 81 into 2, and that is your bid eligibility. Correct?
Vijay Nirani: That is correct. We expect higher allocations for this ethanol supply year. Out of about 500 ethanol plants, about 220, 230 odd plants, which are mono-based, will not be operating to capacity. For example, last year, syrup and B heavy alone, there was a supply of almost about INR 380 odd crores of ethanol. That is almost about 30%, 38% of the last year's supplies. This year, that has almost become zero. There is 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. That should give us better opportunity to operate also.
Nitin Awasthi: Just did the calculation, sir. Back of the hand calculation, that means you can bid for about 66 crore liters.
Vijay Nirani: Correct, sir.
Nitin Awasthi: Okay, understood. 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 are hovering at INR 28 to INR 30. One more price was your C heavy molasses-based ENA, 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.
Vijay Nirani: Right, sir. Usually, the price of ENA, there is not much of a difference between grain or molasses-based. Of course, it depends on the premium of the plant and the consumption pattern for the potable alcohol manufacturers. But they are very cost-conscious in the end, right? A lot of people, irrespective of whether it is sourced from maize or grain, the priority is on price. But post that, for certain companies like Diageo and certain large companies also have preference on the base of ENA. But the key driver would always be the price. So for us, we expect a better price of ENA for the current year because prices of raw material that is syrup and B heavy will not be diverted because the sugar prices have gone up really high. So it is about INR 45, INR 48 of price of sugar right now.
Vijay Nirani: So it does not make any sense to divert B heavy or sugarcane juice for ENA. There is a huge chunk of capacity that will not be participating in the supply of alcohol. That leaves us opportunity for the grain-based plants. Considering the demand of 1,100 crore liters in the current tender for OMCs and about 280 crore liters of average potable alcohol consumption, there is a crunch in the capacity available, so prices of ENA should improve.
Nitin Awasthi: Okay, so I should rather see this as a total price increase rather than differentiate between different routes.
Vijay Nirani: Okay.
Nitin Awasthi: For industrial alcohol, similar pattern?
Vijay Nirani: For industrial alcohol, again, the price of international ethanol also, earlier there used to be a lot of RS imports that used to happen. Now the price of RS has already reached about, if my memory serves me right, it is at about INR 58 to INR 60 a liter. Earlier, that used to be at around INR 47 to INR 48 a liter, landed into the country. Considering that jump in price, of course, there are different reasons for it. We see that there is a lot more opportunity for the Indian ethanol manufacturers to cater to this industrial alcohol demand also.
Nitin Awasthi: Understood. So, and similar figure, if you could provide the demand for this in India, like you said, for alcohol, it is about 280 to 300.
Vijay Nirani: The-
Nitin Awasthi: crore liters, the demand.
Vijay Nirani: For the chemical industry?
Nitin Awasthi: Yeah.
Vijay Nirani: Yeah, for the chemical industry, it is about 250 to 300 crore liters is the demand right now. We expect that at least about 40% to 50% of it, I am saying with confidence, would be catered by the Indian manufacturers.
Nitin Awasthi: Understood. Is my understanding correct that these three things weaving in together is pushing up the price of ENA?
Vijay Nirani: That is correct, sir.
Nitin Awasthi: Understood. Thank you, sir.
Operator: 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 Mr. Vijay Nirani for his closing comments. Over to you, sir.
Vijay Nirani: Thank you so much, ma'am. I thank all our shareholders for the trust and the faith that you have placed in us and at 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 with the support and the confidence that you have shown in 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.
Operator: 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.
