BCL Industries Ltd — Q3 FY26

BCL Industries Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=V-6n3398ESE Published: 3 months ago

0:01 1 second Good morning ladies and gentlemen and welcome to the BCL Industries earnings call for Q3 and 9month FY26 hosted by 0:10 10 seconds Incred Equities. As a reminder, all participant lines will be in the lesson on remote mode and there will be an 0:17 17 seconds opportunity for you to ask questions after the presentation concludes. 0:22 22 seconds Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. 0:34 34 seconds This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. 0:45 45 seconds These statements are not a guarantee of future performance and involve risk and uncertainties that are difficult to predict. 0:53 53 seconds I now hand the conference over to Mr. 0:55 55 seconds Nani for from Incred equities. Thank you and over to you sir. 1:01 1 minute, 1 second Thanks. I thank okay. 1:07 1 minute, 7 seconds Sorry to interrupt sir. Your voice is not audible. No sir. Is it audible? 1:16 1 minute, 16 seconds Yes, please proceed. 1:25 1 minute, 25 seconds Your voice is not audible. 1:39 1 minute, 39 seconds Hello. Can you hear us? Yes. 1:42 1 minute, 42 seconds Okay. Um so from BCL industries management today we have their joint managing director Mr. Kushal Metal the 1:49 1 minute, 49 seconds chief uh executive officer Mr. Warren Gupta. I would now like to invite Mr. 1:55 1 minute, 55 seconds Kushal Metal to initiate the proceedings with his opening remarks post which we'll shall open the floor for a Q&A session. Thank you and over to you sir. 2:05 2 minutes, 5 seconds Uh thank you Mr. Vasti. Good morning everyone and a warm welcome to BCL Industries Limited's quarter 3 and 9month FI26 earnings conference call. 2:15 2 minutes, 15 seconds Thank you for joining us today. 2:18 2 minutes, 18 seconds Let me begin with a brief discussion on the prevailing operating environment for ethanol followed by an update of strategic progress across the business 2:27 2 minutes, 27 seconds and the key key drivers for the quarter's performance. 2:30 2 minutes, 30 seconds India's ethnol blended program has reached a defining milestone during ESY 2425 blending levels have effectively 2:40 2 minutes, 40 seconds achieved the E20 target reported blending at 19.98%. 2:46 2 minutes, 46 seconds The program is now gradually transitioning to its next phase of evolution. Policy discussions are underway including deliberations by 2:54 2 minutes, 54 seconds relevant government committees and NITIO to explore pathways for flex fuel engines and other usages for ethnol beyond E20. 3:06 3 minutes, 6 seconds Looking ahead, cycle 2 tenders are expected in the near term. We are hoping for allocations to improve. There may be 3:13 3 minutes, 13 seconds a chance that the mix may be skewed towards FCI rise. 3:17 3 minutes, 17 seconds Volume visibility remains linked to policy clarity. Till then the company will continue to utilize uh its capacity through ENA production. 3:28 3 minutes, 28 seconds The industry has seen a growing shift towards grainbased ethanol with FCI rice and maze emerging as key feed stocks. 3:37 3 minutes, 37 seconds BCL operates a f flexible unit capable of processing multiple feed stocks, positioning BCL to insulate its operating performance from industry volatility during the quarter. 3:49 3 minutes, 49 seconds Maze prices have softened to around 20 to 21 rupees a kg which allows the company to compete aggressively in the ENA market. 4:00 4 minutes Let me now provide a strategic update on the company's ongoing transformation and growth in growth journey. 4:07 4 minutes, 7 seconds During the quarter we also announced uh to acquire the remaining 25% stake in Swaksha Dist Limited which is to be 4:15 4 minutes, 15 seconds completed by uh 30th of June 2026 after which Swakshshire Dist will be a wholly 4:22 4 minutes, 22 seconds owned subsidiary of BCL Industries Limited. 4:26 4 minutes, 26 seconds The total investment outlay for this acquisition is expected to be around 55 crores. 4:32 4 minutes, 32 seconds This strategic move will allow us to further consolidate controls, streamline operations and unlock synergies while significantly strengthening BCL's 4:40 4 minutes, 40 seconds leadership position in grainbased dist segment. 4:46 4 minutes, 46 seconds A key differentiate of BCL continues to be a state-of-art distary infrastructure which allows us to operate efficiently while seamlessly switching between ENA and ethanol when required. 4:57 4 minutes, 57 seconds In an environment where ethanol demand has remained substitute due to industrywide over supply and OMC allocations being lower than anticipated, this inherent flexibility 5:06 5 minutes, 6 seconds has enabled us to operate production, balance volumes and maintain stable operations. 5:15 5 minutes, 15 seconds I would like to highlight uh that Swaksha Distri has received all necessary approvals and licenses under 5:22 5 minutes, 22 seconds the no increase in pollution load scheme uh to for its production capacity to be 5:29 5 minutes, 29 seconds changed from 300 KPD to 350 KPD. In parallel, we continue to progress with our planned 150 KPD uh capacity 5:39 5 minutes, 39 seconds expansion at Batinda. Therefore, our comp capacity is set to be increased to 900 KPD by the end of FY26. 5:48 5 minutes, 48 seconds ENA continue to deliver good performance uh uh supported by healthy uptake from 5:54 5 minutes, 54 seconds our P&ML portfolio and consistent demand from leading bottlers across the country. During the quarter, the ENA 6:02 6 minutes, 2 seconds volumes increased by 60% yearonear to 15,330 KL, reflecting a sustained demand 6:09 6 minutes, 9 seconds momentum. PMIL saw a total sales of uh 4 lakh 888,000 boxes in Q3 F24. 6:19 6 minutes, 19 seconds We have further strengthened our present in the IML segment with the launch of spe Punjab special whiskey in glass bottles reflecting our intent to elevate 6:28 6 minutes, 28 seconds brand positioning and improve realizations. 6:31 6 minutes, 31 seconds This also marks an important step in our phased approach towards enter entering the IMFL segments supported by structural industry growth and 6:40 6 minutes, 40 seconds increasing custom custom consumer preference for premium offerings. 6:45 6 minutes, 45 seconds On the sustainability front, BCL remains amongst the few distillery players in India to use agriculture waste to meet 6:52 6 minutes, 52 seconds company's fuel requirement. We currently operate a 60 ton per hour patty straw based bo biomass boiler and plan to 7:01 7 minutes, 1 second commissioner commission an additional 55 ton per hour patty straw based boiler alongside at our botinda ethanol plant. 7:11 7 minutes, 11 seconds With these initiatives, we're on track to meet 100% of our steam and power requirement through Patty Straw, which 7:18 7 minutes, 18 seconds will uh provide the company with further cost savings. 7:25 7 minutes, 25 seconds With respect to our edible oil business, we have fully exited our packaged oil business operations with stock liquidation underway and expected to be completed by the end of financial year. 7:36 7 minutes, 36 seconds We continue to import crude edible oil in bulk for soft oil refining as that allows the company to fetch a better 7:44 7 minutes, 44 seconds price in the global market. However, BCL has now decided to report its oil trading business separately going 7:51 7 minutes, 51 seconds forward. This will further uh uh enhance the transparency in uh in the 7:59 7 minutes, 59 seconds results and will give uh more clearer insight to our investor and everyone in the market on the different segments of the company. 8:11 8 minutes, 11 seconds Our uh maze extraction unit at Suksha district is on track to be commissioned by Q4 FY26. 8:18 8 minutes, 18 seconds Now let me move on to the quarter's operational and financial results. Our dist segments delivered a robust volume 8:27 8 minutes, 27 seconds growth with ENA volumes maintaining strong momentum in both Q3 and 9 months rising 60% and 71% yearonear. 8:37 8 minutes, 37 seconds Ethanol volumes reached 47,420 KL in Q3. 8:43 8 minutes, 43 seconds Ibita for for this quarter from list segment stood at 60 crores up by 42% yearonear while refinary revenue came at 8:52 8 minutes, 52 seconds 153 crores for Q3 with evida margins of 5.23%. 9:00 9 minutes For Q3, BCL delivered a strong performance with a total revenue of 758 crores. IBIDA increasing by 41% 9:08 9 minutes, 8 seconds yearonear to 68 crores with with IBIDA margins expanding by 270 BIPS uh largely 9:17 9 minutes, 17 seconds driven by easing raw material prices and flexibility in using sources of energy that increases by 69% yearon year at 35 crores. 9:27 9 minutes, 27 seconds While the industry environment continues to face policy rel related uncertainties, BCL's core strength in grain procurement and processing sets its apart. 9:38 9 minutes, 38 seconds Although we anticipate tough market conditions in the times to come, we expect BCL to ride the waves confidently given our operational efficiency. Thank you. 9:52 9 minutes, 52 seconds So, shall we begin the question and answer session? 10:02 10 minutes, 2 seconds Thank you very much. We will now begin with the question and answer session. 10:07 10 minutes, 7 seconds Anyone who wishes to ask a question may press star and one on the touchstone telephone. 10:14 10 minutes, 14 seconds If you wish to remove yourself from the question queue, you may press star and two. 10:19 10 minutes, 19 seconds Participants are requested to use handsets while asking a question. 10:24 10 minutes, 24 seconds Ladies and gentlemen, we will wait for a moment while the question Q assembles. 10:37 10 minutes, 37 seconds We have the first question from the line of Bala Murali Krishna from Oman investment advisor. Please go ahead. 10:47 10 minutes, 47 seconds Good morning Krish. So the first question is regarding the um um archipex is going on stream. So in this quarter 10:55 10 minutes, 55 seconds we will commission 150 kpinda and also 25 of mal extraction structure. 11:08 11 minutes, 8 seconds Yes. Yeah. Okay. So and pertaining to margin. 11:14 11 minutes, 14 seconds So there is a correction in the uh nice prices to such a good extent but still there is 11:22 11 minutes, 22 seconds nothing is reflecting in the margins. So what could be the reason for this and going forward how we can see the margins 11:30 11 minutes, 30 seconds because the m prices are at a lower levels as of now also as we speak. 11:37 11 minutes, 37 seconds So as you may have noticed uh the company has uh tried to increase its ENA sales given the lower allocation of 11:45 11 minutes, 45 seconds ethanol and uh since uh uh the ENA market has become extremely competitive 11:52 11 minutes, 52 seconds uh the company has been very competitive in the market and ENA is now the prices are significantly lower as opposed to 12:00 12 minutes ethlon. Hence uh hence the company has to compete and uh 12:07 12 minutes, 7 seconds therefore ENA currently is uh has lower margins as to manufacturing ethanol. 12:15 12 minutes, 15 seconds Okay. 12:18 12 minutes, 18 seconds So for the next year what would be your capex plans? So uh 200 15 we can 12:25 12 minutes, 25 seconds understand better and uh next year what is the capex plan and also from the maj extraction unit what could be the revenue potential for the next year. 12:38 12 minutes, 38 seconds See um uh for now unless there is a clear uh policy in regards to the road 12:45 12 minutes, 45 seconds map of ethanol going forward uh beyond this 150 KPD uh the company will review its future capex plans again before making any final decisions. 12:57 12 minutes, 57 seconds Uh so for now our focus is toward the uh mol extraction and uh the 150 KPD. Uh 13:06 13 minutes, 6 seconds and sorry what was the second part of your question? 13:10 13 minutes, 10 seconds Um what is the revenue potential from this major extraction frequency? 13:15 13 minutes, 15 seconds The maze oil extraction and the refinery business uh will continue around the similar levels uh where we are uh 13:24 13 minutes, 24 seconds operating at. So I we did a revenue of around 150 odd crores uh this past quarter and uh the figures will be around that only. 13:37 13 minutes, 37 seconds Okay, understood. So finally on the um uh canal supply part so I think there's 13:45 13 minutes, 45 seconds a lot of gap between capacity and also the tenders which we from OMC. So even 13:52 13 minutes, 52 seconds if we divert some capacity to still maybe we need require some more orders to 14:00 14 minutes cater and this 150 KP also now getting added. So what could be the gap between 14:06 14 minutes, 6 seconds the orders and also uh our capacity and how we're going to plan that to run the plant at the 100% capacity utilization. 14:18 14 minutes, 18 seconds I'm sorry I couldn't understand the question. Uh yeah yeah yeah I I'll rephrase it. So because uh the OMC allocation is on 14:27 14 minutes, 27 seconds lower side for all players and we have a um ENA market also. So we are diverting some capacity to ENA but still uh when 150 KPD also get added to our capacity. 14:39 14 minutes, 39 seconds So there will be huge uh gap between the demand and our capacity. So how we going to plan to mitigate that gap? 14:51 14 minutes, 51 seconds See for now company will focus on maximizing ENA sales uh PML portfolio. 14:57 14 minutes, 57 seconds Yes, ethanol allocations are lower. Uh we are expecting a C2. Let's see what that is. uh that brings uh the company 15:05 15 minutes, 5 seconds will try to sell more ethanol to private uh companies being Reliance and Naira 15:11 15 minutes, 11 seconds and see how how much uh uh how we can bring our capacity utilization close to 15:18 15 minutes, 18 seconds 100. Uh it's a uh it's an ongoing situation and the company is trying its 15:25 15 minutes, 25 seconds best for now to uh uh you know maximize its utilization. 15:32 15 minutes, 32 seconds Okay. Lastly on maze price what is the current maze price in the last quarter and the current quarter? Can you please share this? 15:39 15 minutes, 39 seconds So maze prices have been around uh rupees 20 uh for uh for some time now. 15:47 15 minutes, 47 seconds So given 5% here and there. Okay. Okay. That's all. 15:58 15 minutes, 58 seconds Thank you. We will take the next question from the line of Pushkar Jan from Millie Capital. Please go ahead. 16:05 16 minutes, 5 seconds Hi sir. Am I audible? Hello. 16:12 16 minutes, 12 seconds Yeah about I wanted to ask about the allocations. Uh so uh like where are when are the next set of allocations 16:19 16 minutes, 19 seconds expected to be announced and what is our uh expectation that uh about the allocations like how things will move forward in ethanol? 16:30 16 minutes, 30 seconds See uh I'm not aware when the next cycle will come. Uh it's it's uh that depends on when OMC's 16:39 16 minutes, 39 seconds decide for it to come and exactly what quantity would it be of. So uh yes we are expecting some improvement in our 16:46 16 minutes, 46 seconds allocation post the cycle too but for now it uh it is uh not wise for me to comment on it uh with the limited information that I do have. 16:56 16 minutes, 56 seconds Okay. So it will depend on like OMC's whenever they want to do the next allocation. But sir my uh the second question is regarding uh because of the 17:04 17 minutes, 4 seconds four is there a risk that government would you know reduce the price of me these 17:10 17 minutes, 10 seconds death and all from 70 to in the next ESY uh because of the current margins like 17:18 17 minutes, 18 seconds currently some like less than rupees a beta. So do you foresee it as a risk? 17:28 17 minutes, 28 seconds Yes, it uh it it very well could be considered by the government. U I'm I'm sure they're aware of the current raw 17:34 17 minutes, 34 seconds material prices in the market and uh the prevailing situation of over capacity in 17:41 17 minutes, 41 seconds the industry. So yes, maybe uh they could make a decision on that. But again uh I'm not in the government so it's tough for me to comment uh on it. 17:54 17 minutes, 54 seconds Right. Thanks a lot. Thank you. 18:00 18 minutes Thank you. Next question from Yeah. Hi. Am I audible? 18:09 18 minutes, 9 seconds Yes. Yes. Yes. 18:11 18 minutes, 11 seconds Yeah. Uh hello Kush. Congratulations on a good set of numbers. uh we've observed a sharp increase in ENA volumes. Could 18:18 18 minutes, 18 seconds you elaborate the realization and the marginal difference margin difference between the ENA and ethanol? 18:25 18 minutes, 25 seconds Yes. So u for now there's a significant difference in the prices of ENA and ethanol because as mentioned earlier 18:34 18 minutes, 34 seconds we've had to sell more ENA and we're now even exploring markets outside of India 18:40 18 minutes, 40 seconds for ENA. uh prior to the uh ethanol policy a lot of our product used to be exported to Africa but we uh the Indian 18:49 18 minutes, 49 seconds market uh uh could not post the ethanol policy became too expensive again now we're exploring that market and other 18:56 18 minutes, 56 seconds industrial uses for ENA in the country so uh uh so prices of ENA are currently 19:02 19 minutes, 2 seconds around uh 59 to 60 rupees in the market uh so quite low as compared to ethanol 19:10 19 minutes, 10 seconds but giving the lower allocations the company has no choice but to uh sell mo and all this has been made from maze itself or are we using FCI rice also? 19:21 19 minutes, 21 seconds No no FCI rice is used for ethanol maze maize or damaged rice is being used for uh ENA 19:30 19 minutes, 30 seconds and out of it ENA total ENA capacity what is the proportion which is utilized for captive consumption by PML. 19:37 19 minutes, 37 seconds So PML is quite low as of uh today. So given my uh 19:47 19 minutes, 47 seconds about I'd say 10 to 15% of my batindas capacity is being used for my bottling unit. 19:56 19 minutes, 56 seconds Okay. So going ahead I mean what is the capacity utilization in this uh quarter and how do you see going forward with 20:04 20 minutes, 4 seconds the ethanol and I mean what is the future of ethanol according to you uh going ahead see for for this quarter 20:13 20 minutes, 13 seconds capacity utilization has been close to 100%. And we will try our best to uh keep it close to 100% uh in the coming 20:21 20 minutes, 21 seconds quarters as well. See the future of ethanol again I think is a very bright future. E20 is not uh the end. uh 20:30 20 minutes, 30 seconds ethanol uh blending policies are being introduced in uh in neighboring nations also as we speak and 20:40 20 minutes, 40 seconds flex fuel cars will be introduced in India and ethanol itself is a is a good product uh which can further be 20:47 20 minutes, 47 seconds converted into sustainable aviation fuel uh which I think has a very good future for India because uh given that uh uh we 20:56 20 minutes, 56 seconds are now uh operationally very strong as a country in producing ing and have a complete ecosystem with a lot of SAF 21:05 21 minutes, 5 seconds mandates coming into Europe and other nations starting from next year. SAF also I believe has a very good future. 21:11 21 minutes, 11 seconds So overall the ethanol policy has not just benefited companies like us. It has benefited the government in saving 21:19 21 minutes, 19 seconds forex. has mo mostly benefited the farmers as their produce has been uh you know selling at a good rate without them 21:28 21 minutes, 28 seconds having to worry about getting timely renumerations from uh companies. So ethanol has benefited the Indian economy 21:36 21 minutes, 36 seconds as a whole and I think uh the the future is bright. There are slight hiccups. It might take some time for uh policy to 21:44 21 minutes, 44 seconds formalize but uh overall we're optimistic. 21:49 21 minutes, 49 seconds The reason I'm asking is because we took uh the additional stake of SOA also. So uh are we seeing uh I mean green shoots 21:57 21 minutes, 57 seconds are we seeing uh I mean does that uh uh should I mean should it convert to the confidence of the promoters in ethanol business? 22:09 22 minutes, 9 seconds See, I'm not uh the promoters of this company are not in this for two, three years. We're in this for the long run. 22:15 22 minutes, 15 seconds Uh so uh uh we are quite confident that in the long run the business that we're in will continue to grow and flourish. 22:25 22 minutes, 25 seconds And uh of course just like any other business there are uh uh cycles that a business goes through uh of uh euphoria 22:33 22 minutes, 33 seconds then a slowdown and again uh of uh of stabilization and then again there is a 22:40 22 minutes, 40 seconds a good cycle. So uh we're quite hopeful that uh in the long run both ENA and 22:48 22 minutes, 48 seconds ethanol are uh are industries that will continue to grow. 22:53 22 minutes, 53 seconds Right. And besides perod record, Amrut ABD uh which are the other ENA supply uh other bottlers which we are supplying 23:02 23 minutes, 2 seconds ENA to because you mentioned that we are also exploring exports. 23:06 23 minutes, 6 seconds Yeah. So uh DI is also a big buyer from us from Kadakpur. Uh and then there various uh local butlers uh from 23:15 23 minutes, 15 seconds everywhere. Now from Mahinda we've also targeted uh perfumery companies uh who require alcohol for perfume uh 23:23 23 minutes, 23 seconds manufacturing and then there are various traders through which we can export this ENA to many African nations. 23:32 23 minutes, 32 seconds Okay. And ENA prices you think that they will they will stabilize here only because I remember ENA prices were much higher uh before. 23:42 23 minutes, 42 seconds So you think 5960 should be the bottom? 23:46 23 minutes, 46 seconds Yes, I I I believe so. Uh but uh again it's tough to make any comments, 23:53 23 minutes, 53 seconds right? What are the margins on margins on? 23:56 23 minutes, 56 seconds Okay, I'll come back in line. No problem. Thank you. 24:02 24 minutes, 2 seconds Thank you. We have the next question from the line of the Panchu Pandi from Solara Wealth. Please go ahead. 24:10 24 minutes, 10 seconds Hello. Am I audible? Yes, you're audible. 24:15 24 minutes, 15 seconds Okay. So, my question is regarding uh the demand for the Punjab uh whiskey which you have launched recently in 24:22 24 minutes, 22 seconds glass edition. So, how is the consumer response for that whiskey and what are the margin advantages which you are gaining on this glass edition 24:30 24 minutes, 30 seconds comparative the normal Punjab whiskey which you have launched earlier. Thank you. uh see the market response has been 24:38 24 minutes, 38 seconds uh positive so far. Uh of course everything takes time uh for a new product to come into the market but uh 24:46 24 minutes, 46 seconds overall the response has been positive and I think we'll continue with the product going forward. When we talk about the margins 24:54 24 minutes, 54 seconds since it's a new product we have to price it very aggressively uh and uh the packaging needs to look premium. Uh I think the margins are currently low 25:02 25 minutes, 2 seconds lower than our uh uh uh original offerings. Uh but uh this was a necessary step uh to increase our 25:10 25 minutes, 10 seconds portfolio. So we had to make this decision. 25:16 25 minutes, 16 seconds Okay. So do you see you see margins getting expanding in future obviously as the product will further grow? 25:26 25 minutes, 26 seconds Yes, that was the uh that was the thought behind it. Uh and also uh you 25:33 25 minutes, 33 seconds know if we want to uh increase our volumes and our product portfolio must grow along with it. 25:42 25 minutes, 42 seconds Okay, got it. Thank you and all the best in future. Thank you. 25:48 25 minutes, 48 seconds Thank you. We will take the next question from the line of Sakit Kapoor from Kapoor Co. Please go ahead. 25:56 25 minutes, 56 seconds Yeah, Namaskar. Sir, thank you for the opportunity. So, firstly, uh if you could just explain slightly in detail 26:03 26 minutes, 3 seconds the dynamics of the ENA industry currently and what has led to these uh these these uh lower trends in the 26:11 26 minutes, 11 seconds realization if you remember sir the average the averages for the prevailing uh few months were in the higher 70s 26:18 26 minutes, 18 seconds correctly there sir and your thought process? 26:22 26 minutes, 22 seconds I know prices of ENA few months ago were around uh 69 70 26:30 26 minutes, 30 seconds rupees a liter. Uh but uh you know uh with some companies like ours who have the flexibility between ENA and ethanol 26:39 26 minutes, 39 seconds also getting lower allocation for ethanol. uh there has been an increased supply of ENA in the market uh which was 26:47 26 minutes, 47 seconds expected uh and hence uh you know uh prices have come down with the increase 26:54 26 minutes, 54 seconds in supply. So that's why uh this current trend is playing out which we which I had also uh uh I mean my last earnings 27:03 27 minutes, 3 seconds call 3 months ago I had uh highlighted this fact that moving forward we expect the ENA market to be very competitive 27:10 27 minutes, 10 seconds and uh we will have to price our product accordingly. So the the management was aware that this trend will play out. 27:20 27 minutes, 20 seconds So, so to just to understand it is the incremental volume that has created uh the the price uh slump and also the RM 27:29 27 minutes, 29 seconds of uh falling that mean the our conversion margins are uh have improved or have have remained uh 27:36 27 minutes, 36 seconds yes of course uh with the raw material prices uh also decreasing it has helped us to uh decrease the uh ENA prices in 27:45 27 minutes, 45 seconds the market otherwise we would have been working at uh negative margins if the raw material prices had not decreased. 27:53 27 minutes, 53 seconds But uh you know with the uh raw material prices now going down and 28:00 28 minutes uh the rupri uh depreciating uh as opposed to the dollar uh in the last 3 4 months. Uh this opens up two markets for 28:09 28 minutes, 9 seconds us. one uh of ENA being exported out of India and secondly the potential of replacing uh the uh import of industrial 28:18 28 minutes, 18 seconds alcohol in the country uh from mainly from USA and Brazil uh for pharmaceutical companies. 28:28 28 minutes, 28 seconds So last point can you deliberate once again I just missed it. The export of the No. So with the 28:36 28 minutes, 36 seconds Yeah. So India currently imports a significant amount of uh uh industrial 28:44 28 minutes, 44 seconds alcohol uh for the use of pharma industry. So uh with the rupee also depreciating and the raw material prices 28:51 28 minutes, 51 seconds also uh decreasing we hope uh now to start competing with the imported alcohol also. 28:58 28 minutes, 58 seconds Okay sir are these grades different than what we are manufacturing since you are telling that a large quantity of 29:05 29 minutes, 5 seconds industrial alcohol is imported. So uh manufacturers like us uh do we product profile is different? 29:13 29 minutes, 13 seconds No product is same for anyone who has the flexibility for an ENA license can supply to uh to these companies. U 29:22 29 minutes, 22 seconds anyone who just has an ethanol license cannot but uh uh with the increase in prices in the domestic markets we were 29:30 29 minutes, 30 seconds not competitive uh with the import market in the past. 29:36 29 minutes, 36 seconds Okay. And sir, secondly on the purchase of stock and trade uh can you explain the nature sir in the P&L for this 29:45 29 minutes, 45 seconds quarter we have found a significant purchase of stock and trade to the tune of 83 K. What is this attributable to? 29:55 29 minutes, 55 seconds No, that is not PML. 29:58 29 minutes, 58 seconds That is PML. 29:59 29 minutes, 59 seconds I'm talking I'm talking about the profit and loss account in the profit and account. 30:04 30 minutes, 4 seconds Yeah. So, I think this figure that you're referring to is our oil trading business 83 crores revenue. Uh uh so 30:12 30 minutes, 12 seconds from now on we've decided to uh you know list our oil trading business separately. uh because we have always 30:19 30 minutes, 19 seconds imported uh oils in bulk uh uh throughout our past but earlier our refining capacity was a lot more. So 30:28 30 minutes, 28 seconds most of that oil used to come for our captive use but since our refining capacity has now decreased uh we to get 30:35 30 minutes, 35 seconds good prices in the global market for uh for oils. we continue to import in bulk and where it deems fit uh we decide to 30:43 30 minutes, 43 seconds sell this uh uh this product in high seas or bring it to India and sell it from the port. So for for greater 30:51 30 minutes, 51 seconds transparency and uh to uh uh to show our investors the different verticals we've decided to now uh list these numbers separately. 31:02 31 minutes, 2 seconds Right. A small point and join the queue. 31:04 31 minutes, 4 seconds Uh so is it the availability of our raw material that is made corn that is leading to these uh uh the lower price 31:14 31 minutes, 14 seconds trends and uh and there is also a ramp up in capacity across the country I think. of for the ENA but just to 31:22 31 minutes, 22 seconds understand the dynamics why have the realizations uh trended downward uh whether this is a growth in market or uh 31:31 31 minutes, 31 seconds growth in market along with growth in the output or uh if if you just could give final uh comments on that. Now as 31:40 31 minutes, 40 seconds explained earlier again Alexan of course maze prices have an impact in us allowing us to reduce the prices of 31:48 31 minutes, 48 seconds ENA. Uh I don't think there's significant ENA capacity coming in the country. Uh there has been a significant 31:56 31 minutes, 56 seconds expansion in the ethanol capacity in the country but not towards ENA as much. uh as explained earlier with uh a lot of 32:03 32 minutes, 3 seconds companies getting lower allocations for ethanol u the the ENA supply has increased in the market hence the decline in prices there two C factors 32:12 32 minutes, 12 seconds that have played this not just one right and this trend is continuing for the entrying quarter also nothing 32:20 32 minutes, 20 seconds there's no parameter that the real license will give an uptick uh for now prices are somewhat 32:27 32 minutes, 27 seconds stabilized let's see what uh the coming quarters and we are running at optimum utilization. 32:34 32 minutes, 34 seconds Yes, thank you sir. All the best. 32:39 32 minutes, 39 seconds Thank you. We will take the next question from the line of Hisha from Ahan Capital. Please go ahead. 32:46 32 minutes, 46 seconds Uh thank you for giving me this opportunity. My first question is what are the key drivers behind the 9% AITA 32:54 32 minutes, 54 seconds margin this quarter and uh sustainable do you believe it margin level is going to be forward 33:05 33 minutes, 5 seconds I think margins have been somewhat uh uh consistent uh given the nature of the 33:12 33 minutes, 12 seconds business raw material prices have decreased but so have ENA prices in the market uh the companies is running a 33:19 33 minutes, 19 seconds more efficient uh uh business now with the old edible oil unit closing down. So of course all those factors have played uh played a role in this. 33:30 33 minutes, 30 seconds Uh okay sir my next question is what kind of volume growth are we targeting for fi 26 and 27 and do we intend to 33:38 33 minutes, 38 seconds increase our increase shift towards ENA segment? 33:44 33 minutes, 44 seconds No the increase shift toward is happening as we speak. uh volume growth would be difficult uh uh for this uh 33:52 33 minutes, 52 seconds financial year because we're already operating at 100% capacity utilization. 33:58 33 minutes, 58 seconds Okay sir. And my last question is could you update uh on the progress towards entering IMF segment like what are the 34:06 34 minutes, 6 seconds expected timelines and targeted categories and your outlook on Punjab market? 34:14 34 minutes, 14 seconds uh see uh I can't give a set timeline as of yet. The company is working towards it and this new product in IML market is 34:24 34 minutes, 24 seconds a stepping stone. We've added two more products in the IML market and we're focusing on that uh in the coming uh 34:32 34 minutes, 32 seconds financial year aggressively and also working towards you know uh seeing 34:39 34 minutes, 39 seconds how to enter the Punjab market and not just Punjab if we entered IMFL we have to also enter the surrounding states uh so currently working on that strategy. 34:49 34 minutes, 49 seconds Uh okay so that's it from my side. Thank you. 34:55 34 minutes, 55 seconds Thank you. We will take the next question from the line of Majid Ahmed from Pinpoint X Capital. Please go ahead. 35:03 35 minutes, 3 seconds I'm audible sir. Yes. Yes. Yes sir. 35:08 35 minutes, 8 seconds Uh sir uh my first question is especially uh what were the DG uh GS prices during the quarter and how has the demand been sir? 35:20 35 minutes, 20 seconds Uh the demand for DDGS has been good. Uh the the prices for uh May's DDGS uh for 35:28 35 minutes, 28 seconds the quarter I think were around uh 21 rupees on an average. Uh 35:35 35 minutes, 35 seconds so the demand and the prices both have been good in the market. 35:40 35 minutes, 40 seconds Okay. And uh sir, what is the plan on the real estate uh part? 35:49 35 minutes, 49 seconds No. So, the real estate business um we've got some uh inventory left and it's taking its uh time to sell since 35:58 35 minutes, 58 seconds it's plotted uh inventory. Uh so prices have uh increased in the 36:04 36 minutes, 4 seconds market. So uh we're seeing a slightly lower demand but u we're not too 36:12 36 minutes, 12 seconds stressed about it. I think it it will sell it in at its own time at a good price. Okay. 36:19 36 minutes, 19 seconds Most of the stock has been liquidated in the past uh past few years. 36:26 36 minutes, 26 seconds And sir, what about the oil trading segments sir? Like what are we planning to do like currently like book you for any what type of revenue are we looking 36:34 36 minutes, 34 seconds at or no as as explained earlier during my call today? U oil trading is a part that was always a part of our business. 36:44 36 minutes, 44 seconds Earlier it was not uh shown separately because you know to uh to get oil for our refinery we have to uh buy from uh 36:53 36 minutes, 53 seconds overseas and to get a good price from the overseas market we have to buy in bulk. In the past uh since our captive consumption was a lot more in our 37:02 37 minutes, 2 seconds refinery uh most of the product was used and whatever uh the excess quantity was there was either sold high seas or uh 37:11 37 minutes, 11 seconds once it arrived at port in Kla uh now since our refinery capacity has decreased we're continuing to buy oils 37:18 37 minutes, 18 seconds in bulk oil in bulk in the global market to get good prices. uh hence we you know either decide to trade that uh in IC's 37:27 37 minutes, 27 seconds or at the port. So it's uh the these numbers are being reported separately from now on for just uh greater transparency uh for the market. 37:38 37 minutes, 38 seconds Okay sir unit is expected to commission the next quarter. What are the expected uh 37:46 37 minutes, 46 seconds revenue and margins? Uh sir and do you have any offer agreement? 37:53 37 minutes, 53 seconds No. So uh this oil can be sold in the market. Uh we don't expect our revenues to increase significantly because of it. 38:00 38 minutes Uh because uh you know uh what the oil that we sell in the market uh leads to a 38:09 38 minutes, 9 seconds decrease in the price of DDGS. But it it has an positive impact uh in our uh uh margins because this is a forward integration and nothing more. 38:24 38 minutes, 24 seconds And sir uh you also launched this Punjab special whiskey like what is the revenue per box and what type of volume growth and trajectory sir? 38:34 38 minutes, 34 seconds See for now the volumes are quite low uh because it's a new product that has been launched uh and uh the the margins also 38:44 38 minutes, 44 seconds as compared to our previous brands is lower because we're pricing it aggressively. 38:49 38 minutes, 49 seconds So uh but the posit we've heard we've gotten a good impact from the good feedback from 38:56 38 minutes, 56 seconds the market. So we expect uh hope and expect the uh sales to grow in the coming times. 39:04 39 minutes, 4 seconds Okay. Got it. Uh uh sir with 70 uh crition rate for 150 KPD expansion. What would 39:13 39 minutes, 13 seconds be your peak date level sir? And how much how comfortable are you with the interest coverage ratio? 39:21 39 minutes, 21 seconds I think the company's interest coverage ratio is very good around six uh or even greater 6.9 uh as far as I know. uh and 39:31 39 minutes, 31 seconds the debt levels are u uh you know uh as we speak u I would I think it should 39:39 39 minutes, 39 seconds with that peak debt and it will only go lower our working capac uh capital utilization as of today is very low uh 39:47 39 minutes, 47 seconds so uh I think we're quite comfortable where we are uh uh at the end of quarter 39:53 39 minutes, 53 seconds three our consolidated that was uh uh was 49 94 which includes working 40:01 40 minutes, 1 second capital and uh our long-term uh debt uh and I think it with the coming quarters it'll only come down lower than this. 40:13 40 minutes, 13 seconds Okay sir. Got it. Uh and what about the working capital cycle s like what are we expecting going forward sir? 40:22 40 minutes, 22 seconds I'm sorry. Any plans about the working capital cycle sir? Are we planning to improve it or how how are we targeting sir post FI26? 40:34 40 minutes, 34 seconds No, I think it will improve u with the times to come especially with the edible oil business uh major part of it being 40:40 40 minutes, 40 seconds closed uh which was very working capital heavy. So I think it will improve. 40:47 40 minutes, 47 seconds four any uh can you give me any like working capital range that we looking to improve 40:55 40 minutes, 55 seconds like that would be uh I I'm sorry what do you mean by working capital range 41:03 41 minutes, 3 seconds the days sir like uh like currently we have around working capital days around uh 40 to 50 days cash conversion on 70 41:11 41 minutes, 11 seconds like how are we then incrementally reducing it to sir that's what I'm trying to understand See, I can't I I'm sorry, but I don't 41:19 41 minutes, 19 seconds have uh an exact uh target that we set as a company. What we set as a company is, you know, utilizing the least amount 41:28 41 minutes, 28 seconds of working capital uh possible. Uh so as of today, our working capital limits 41:35 41 minutes, 35 seconds are mostly uh quite underutilized. So given that they're underutilized, I believe that our ratio will also improve 41:43 41 minutes, 43 seconds uh accordingly. But uh we don't have a set target. Okay, got it. That's all from my face. 41:50 41 minutes, 50 seconds So, thank you. 41:55 41 minutes, 55 seconds Thank you. We will take the next question from the line of Bhaves, an individual investor. Please go ahead. 42:02 42 minutes, 2 seconds Uh uh thank you for the opportunity. Uh good morning m uh Mr. Mittal. uh with respect to the proposed sale of the land parson could we clarify the total area 42:10 42 minutes, 10 seconds of the land in acres under consideration and additionally how does the management plan to utilize the proceeds from the sale would this primarily be directed 42:19 42 minutes, 19 seconds towards debt reduction acquisition of remaining stake in sua distillary poring into the IMF segment and distribution in 42:26 42 minutes, 26 seconds the form of dividends or any other strategic purposes. 42:30 42 minutes, 30 seconds Uh hi uh good morning thank you for that. Uh so uh the the land with the company was 42:38 42 minutes, 38 seconds close to 16 acres and uh uh some portion of it was from lease uh from the uh 42:46 42 minutes, 46 seconds Wakov board. So uh the the proceeds uh from uh from the sale of this land will mainly go towards the acquisition of the 42:55 42 minutes, 55 seconds 25% at Suka district but it's uh the the area is around 16 acres. So if I calculate uh the the cost 43:04 43 minutes, 4 seconds of the land uh value should be around 200 250 crores. 43:10 43 minutes, 10 seconds No no no no uh I don't think uh it's anywhere close to that in the market we're sitting. Maybe in Bombay it is uh 43:17 43 minutes, 17 seconds but not in Batinda Punjab. Uh I think it's the realistic value in today's market uh I think is anywhere close to 43:26 43 minutes, 26 seconds uh the realistic value is 45 crores. 45 that's very very low like uh it's a it's 43:34 43 minutes, 34 seconds a 16 acre land parcel so uh even if I calculate the lowest amount it should be around 100 110 crores 43:43 43 minutes, 43 seconds so what is the lowest amount you're taking per acre uh per acre I was taking around uh 3 to 43:50 43 minutes, 50 seconds 3,000 3,000 3,000 to 4,000 per per square ft sorry 43:58 43 minutes, 58 seconds n prices here I'm nowhere close to that Unfortunately, I wish they were. But but is it a uh redevelopment lands? 44:05 44 minutes, 5 seconds Is it a industrial land? What exactly it is? Like if the developer of the company purchase it, would would it be uh used 44:14 44 minutes, 14 seconds for uh for construction of residential property or some other property? 44:21 44 minutes, 21 seconds So currently it's passed as an industrial land but whoever wishes to p whoever purchases this uh will develop a 44:29 44 minutes, 29 seconds residential project there. Uh so the CNU can be changed but that's not an issue. 44:36 44 minutes, 36 seconds Okay. Uh so my next question is with respect to the 150 KPD capacity coming operational this quarter. What kind of incremental revenue contribution should we expect on a steady state basis? 44:47 44 minutes, 47 seconds see that mainly depends on if we are get getting any further uh ethanol allocation and what kind of numbers we 44:55 44 minutes, 55 seconds get from there. So uh currently as everyone is aware the allocations are lower than expectation and depend 45:03 45 minutes, 3 seconds depending on the next cycle by the OMC's and what allocations are given uh uh it really depends on that 45:11 45 minutes, 11 seconds but we will achieve the 3,000 cr mark this uh this financial year and with uh the pack growing 3540%. 45:19 45 minutes, 19 seconds because we have already achieved uh 20 uh around 23 22 2300 crores uh in the 9 45:27 45 minutes, 27 seconds months. So uh and and the pack has grown to 100 crores in the 9 months. So uh looking forward we can see 3,000 cr and 140 cr that's a 40% growth year on year. 45:40 45 minutes, 40 seconds We are we are trying for the same and uh we're working for it but as explained you know 45:48 45 minutes, 48 seconds we have had to increase our ENA sales given the current market situation and prices there have been very uh 45:55 45 minutes, 55 seconds competitive so uh yes although the management is trying to reach the magical 3,000 cr figure uh and I think 46:03 46 minutes, 3 seconds we should will be but uh biodeiesel also should contribute to this because you have already completed 46:11 46 minutes, 11 seconds the 75 KL construction. So uh when do you see the uh revenue flowing in? See 46:19 46 minutes, 19 seconds the biodeiesel prices offered by the OMC's uh were not viable. So hence the company did not partake in the tender 46:27 46 minutes, 27 seconds unless there is uh any revision in the prices of biodeiesel. it will be very difficult uh uh to uh to participate in 46:36 46 minutes, 36 seconds the current uh tenders the prices will fluctuate between 80 to 90 only that that's the trend going 46:45 46 minutes, 45 seconds forward I can see so the company won't participate so then why uh why will you 46:52 46 minutes, 52 seconds uh like what will you do with the uh plant then like say 25 kil how will you use it it's very difficult for uh to make a 47:00 47 minutes forward statement saying that the prices will remain at 80 to 90. Prices were much higher before that. Uh uh just last year the prices were around 124 rupees. 47:10 47 minutes, 10 seconds Uh so uh uh it's I I think it's a difficult call to make give a forward 47:17 47 minutes, 17 seconds statement that the prices will remain around 80 to 90. The biodeiesel sector across India is uh is uh struggling and 47:26 47 minutes, 26 seconds I believe the government is aware of that. uh uh so uh we expect that in the coming times uh on 47:35 47 minutes, 35 seconds the contrary that the policy uh will be improved uh so that uh the biodeiesel sector again becomes viable. 47:43 47 minutes, 43 seconds I hope so. Sir, I have just two suggestions, no more questions. So, first is regarding the uh your uh website. So, if you could update the 47:52 47 minutes, 52 seconds biodeiesel section with the latest pictures of the plant and replace the edible oil section with maze oil refinery and oil trading business, this 48:00 48 minutes will be one suggestion. And the other one, if you're if you're seeing good response to the launch of Punjab special whiskey in premium glass bottles, I 48:08 48 minutes, 8 seconds suggest launching green apple vodka in premium glass bottles as well with a bit of rebranding. So this could help elevate the brands and provide inside 48:16 48 minutes, 16 seconds entry areas for the improvement in future whiskey and vodka launches within the IMFL segment. Once you have done that, uh dedicate a separate slide of 48:25 48 minutes, 25 seconds premium offerings in your investor presentation and a separate page on your website to showcase the company's premium offerings. So, this could uh 48:33 48 minutes, 33 seconds help attract both current and potential investors. That's my two suggestions. 48:39 48 minutes, 39 seconds Oh, thank you. Uh thank you a lot. Uh suggestions taken very positively and uh we will work on it. But u just 48:49 48 minutes, 49 seconds thank you again for your suggestions. I think they were very good. Uh just uh the market demand for IMIL uh glass bottle and vodka is not there. 48:59 48 minutes, 59 seconds So uh in glass bottle and IML uh the there's only demand for whiskey but u okay but we are working towards increasing 49:08 49 minutes, 8 seconds the volume of our green apple vodka in uh in PML but other suggestions are all very good 49:15 49 minutes, 15 seconds and we'll work towards that. But uh you said that you have uh a couple of launches coming uh in the next financial 49:22 49 minutes, 22 seconds year like some somewhat I couldn't hear that uh apart from this uh one glass bottle you have launched or you're launching other two brands. 49:32 49 minutes, 32 seconds We we've launched two more products uh in the country liquor market uh but they're not in glass bottles uh they are in uh bottles. 49:41 49 minutes, 41 seconds Okay. So could you up upload that as well in the uh updated presentation if not in this presentation but in the uh Q4 presentation? 49:52 49 minutes, 52 seconds Sure, we'll do. 49:57 49 minutes, 57 seconds Thank you. We will take the next question from the line of Rahil S from Sapphire Capital. Please go ahead. 50:05 50 minutes, 5 seconds Yes. Uh good morning sir. So have we sort of given any guidance u for you know the margins going forward uh at what rate will you sustain in coming quarters? 50:18 50 minutes, 18 seconds uh I don't uh wish to give any uh focus on ebida margins because uh our 50:26 50 minutes, 26 seconds industry is uh going through a uh transitioning phase and same with our company uh uh so although raw material 50:35 50 minutes, 35 seconds prices are uh are at a good range uh uh so is uh the prices of ENA has decreased 50:44 50 minutes, 44 seconds uh so it would be very difficult for me to give any uh any forecast but yes the company is uh trying to sustain uh good 50:53 50 minutes, 53 seconds margins as you have done so in the past and uh with the new sort of capacities 51:00 51 minutes coming in when will we see the you know optimum benefit of it on our volumes and uh revenues 51:09 51 minutes, 9 seconds he's just explained to the last uh uh uh last few questions in the last two three questions I'll just explain this uh the 51:18 51 minutes, 18 seconds the uh revenue optimization um from this uh added capacity depends on 51:26 51 minutes, 26 seconds you know the next cycle from the OMC's and what kind of allocations that we get. So uh currently the allocations are 51:34 51 minutes, 34 seconds uh lower than expectations and uh only if they increase uh will we expect uh 51:42 51 minutes, 42 seconds volume or revenue addition from this added capacity. Oh, okay sir. Thank you. All the best. 51:54 51 minutes, 54 seconds Thank you. We have the next follow-up question from the line of Deep Sanjetti from Man Finance. Please go ahead. 52:02 52 minutes, 2 seconds Yes sir. Uh just wanted an update on uh the Goyel Distillery. What is our plan for the 250 KPD and uh going ahead uh 52:11 52 minutes, 11 seconds for the next two years, what is how is our capeex lined up? 52:16 52 minutes, 16 seconds So uh for now we've uh decided to hold on hold to the go industry uh 52:24 52 minutes, 24 seconds capacity expansion uh and uh you know any further expansions into the ethanol business 52:33 52 minutes, 33 seconds unless there is a clear set policy on the path forward. the the company, you 52:40 52 minutes, 40 seconds know, is now uh seeing that there will be some policy changes and uh needs to have uh uh cash 52:50 52 minutes, 50 seconds and limit uh and resources in hand for any further investments. Uh you know, one being sustainable aviation fuel uh 52:59 52 minutes, 59 seconds that would be a uh capex heavy project uh when there is a policy and the company needs to be prepared for that. 53:06 53 minutes, 6 seconds There are other products also that the company can look to invest in whether that is isobutinol uh or the company's also you know 53:14 53 minutes, 14 seconds actively looking uh and considering an investment in setting up a malt plant uh which would be a vertical uh addition to 53:22 53 minutes, 22 seconds our distillary business. So uh for now uh uh we're taking a pause on any further 53:30 53 minutes, 30 seconds ethanol uh capacity expansion uh which will depend on the future policies but uh the company is uh you know at the 53:40 53 minutes, 40 seconds meantime uh looking for uh various other avenues and where to invest and when the time is right to move fast uh on that front. 53:50 53 minutes, 50 seconds Right. And what is the average cost of debt uh if you can mention and is there any interest uh subvention which we have got in this quarter? 54:00 54 minutes No. Yes, of course. Uh for our uh but hinda units uh in in the long-term debt about 90 crores is under 54:09 54 minutes, 9 seconds interestion where the average interest cost is around 4.5%. 54:14 54 minutes, 14 seconds And even at uh the Swaksha district uh uh one of our loans of around uh I think 54:21 54 minutes, 21 seconds 50 odd crores is under under interest subvention. Besides that I think uh the average uh cost of debt uh would be 54:31 54 minutes, 31 seconds anywhere around uh u I think uh 8%. 54:39 54 minutes, 39 seconds or even lower I think 7.5 that is including all the subvention everything I think last time it was around no no that's excluding that's excluding 54:47 54 minutes, 47 seconds the uh excluding the intervention okay okay that's excluding right so just wanted to understand total 54:56 54 minutes, 56 seconds of our total capacity which we are having of ethanol and ENA how much is dedicated ethanol because that that is 55:03 55 minutes, 3 seconds what we have taken the loan on subvention so how much of it is that we cannot touch that and we cannot you know produce any ENA from there. 55:13 55 minutes, 13 seconds So for Batinda uh that's 350 now with the added uh uh addition and for Kurakur that's 150. 55:22 55 minutes, 22 seconds So total in 500 KBD we have to produce ethanol only. Yeah. 55:28 55 minutes, 28 seconds And rest of the capacity we can use it as ENA dedicated ENA. Yeah. Yeah. 55:34 55 minutes, 34 seconds Great. Great. That gives a lot of clarity sir. Thank you so much. Thank you. 55:41 55 minutes, 41 seconds Thank you very much ladies and gentlemen. Due to time constraint, we will take that as a last question for today's conference. And with that 55:50 55 minutes, 50 seconds concludes the question and answer session. 55:53 55 minutes, 53 seconds Thank you members of the management. On behalf of BCL Industries, that concludes this conference. Thank you all for joining us and you may now disconnect 56:01 56 minutes, 1 second your