Bcl Industries Limited — Q4 FY26

BCL Industries Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=_gMyHBcQQJ4 Published: 3 weeks ago

0:01 1 second Ladies and gentlemen, good day and welcome to BCL Industries Q4 and full year FI26 earnings conference call 0:08 8 seconds hosted by Enquire Equities. This conference call may contain forward-looking statements about the company which are based on the beliefs, 0:16 16 seconds opinions and expectations of the company as on the date of this call. 0:23 23 seconds These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant 0:32 32 seconds lines will be in the listener only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance 0:40 40 seconds during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please 0:48 48 seconds note that this conference is being recorded. I now hand the conference over to Mr. Nitani from Encur equities. Thank you sir. 0:58 58 seconds Thank you. From BCL Industries we have their MD Mr. Rajendra Mittal and their CEO Mr. Vun Gupta. Also from Go India 1:07 1 minute, 7 seconds Advisers their we have Priya Sen. I would now like to invite the management to initiate the opening proceedings 1:15 1 minute, 15 seconds post which we shall open the floor for a Q&A session. Thank you and over to you sir. 1:23 1 minute, 23 seconds Thank you Mr. Ai. Good morning everyone and a warm welcome to BCL Industries Limited quarter 4 in FY26 earnings 1:30 1 minute, 30 seconds conference call. Thank you for joining us today. Let me begin with a brief overview on the industry environment. 1:36 1 minute, 36 seconds Indust India's ethanol blending program has emerged as a strategic priority for the government particularly amid the ongoing geopolitical tensions and 1:43 1 minute, 43 seconds conflicts in West Asia. The need for security, the need for energy security has never been as crucial as in the present situation. Against this 1:51 1 minute, 51 seconds backdrop, several authorities have commenced key policy discussions surrounding the possibility of moving beyond E20 mandate. Various government 1:59 1 minute, 59 seconds bodies including ARI and API are evaluating higher ethnol blends and flexible adoption which we believe will 2:07 2 minutes, 7 seconds continue to support long-term demand for boflu and ethno. The government is laying the groundwork for moving beyond E20 mandate by evaluating higher 2:15 2 minutes, 15 seconds threshold blend standards such as E30 under BIS norm along with proposed amendments to central motor vehicle rules to formally incorporate E85 and 2:24 2 minutes, 24 seconds Eric ethanol blended enabling flexible vehicle adoption. These initiatives are expected to significantly strengthen 2:32 2 minutes, 32 seconds ethanol demand from OMC's over medium to long term. That said, even with the low and expected ethanol allocations, BPM 2:39 2 minutes, 39 seconds industries was able to maintain near full capacity utilization by leveraging its integrated and flexible displaying operations across ENA, SDS and ethanol 2:48 2 minutes, 48 seconds production. However, as more of production was diverted towards ENA and SDS, realization remained under pressure 2:56 2 minutes, 56 seconds due to the highly competitive pricing environment in the market. Despite this environment, BCL Industries delivered a resilient operational performance during 3:04 3 minutes, 4 seconds FI26 supported by strong execution, efficient operations and continued focus on capacity expansion. A major milestone 3:12 3 minutes, 12 seconds during the quarter is the completion of the additional 150 KFC grain distill unit at Benda. We have received all the clearances and approval and the plant is 3:20 3 minutes, 20 seconds under testing phase. By the end of this quarter, we hope to commence production at the rated capacity. With this, our total installed capacity would stand at 3:28 3 minutes, 28 seconds 900 KP. This expansion strengthens our position against the leading grain based display players in India and enhances 3:36 3 minutes, 36 seconds our ability to capitalize on future industry tailwind. 3:40 3 minutes, 40 seconds We are continuously investing on our costsaving measures and enhancing our operational efficiency. We are one of the few distilleries in India to have 3:47 3 minutes, 47 seconds adopted the use of Freddy Straw as a fuel source. To that extent, we have installed another 55 tons per hour very strong boiler that have enabled us to 3:56 3 minutes, 56 seconds meet 100% of our steam and power requirement, further strengthening our operating market. 4:02 4 minutes, 2 seconds This year also marked a significant step for the company towards strengthening product offerings within the PML category. We launched Punjab special 4:10 4 minutes, 10 seconds whiskey in glass bottle giving it a premium look enhancing the brand's overall appeal and positioning. Further we also launched the Punjab Raspberry a 4:18 4 minutes, 18 seconds new addition to our products portfolio in this segment. We have s we have sold almost four and a half lakh cases in 4:24 4 minutes, 24 seconds quarter 4 SI26 which is up by 20% yearon year. We are seeing healthy demand of the product and we are optimistic about 4:31 4 minutes, 31 seconds the performance of this segment going forward. Let me now touch upon the edible oil business. [clears throat] This financial year we have exited from the packaged edible oil business. 4:40 4 minutes, 40 seconds However, we continue to operate the soft oil refinary and the trading businesses. 4:45 4 minutes, 45 seconds Despite the exit from the package oil business, FI26 revenue has remained largely in line with FI25 levels. This 4:53 4 minutes, 53 seconds is attributed to the fact that we have generated decent topics from the soft oil refinary and the trading business and the sustained growth of this business. 5:02 5 minutes, 2 seconds Going forward, DCL continues to evaluate further growth opportunity. will remain on track for proposed additional 250 KPG 5:08 5 minutes, 8 seconds display expansion uh at our Patabad plant in Hariana which would be undertaken in line with the evolving industry landscape and policy 5:17 5 minutes, 17 seconds implementation. It would take uh it would take nearly two years to commission and by that time favorable policies would be implemented. 5:25 5 minutes, 25 seconds Further the acquisition of the remaining 25% stake in Swaksha display is getting executed as per the planned timeline and is expected to be completed by the end 5:33 5 minutes, 33 seconds of June 2026 following which will become a wholly owned subsidiary of diesel industries limited. Now moving on to the financial results for FY26. 5:43 5 minutes, 43 seconds Diesel Industries reported total revenue of rupes 2913 crores. Aida stood at rupes 251 cr up by 18% yearon year with 5:52 5 minutes, 52 seconds a bita margin improving by 130 basis points yearon year to 8.6%. 5:58 5 minutes, 58 seconds PAT for the quarter came in at rupes 126 crores up by 23% yearon year with a pack margin of 4.3%. On the operational 6:06 6 minutes, 6 seconds front, EMA and SDS volume for FI26 increased sharply by nearly 74% yearonear to 53,000 K primarily driven 6:14 6 minutes, 14 seconds by higher diversion towards ENA production amid lower ethanol allocation. Ethanol volume stood at 6:21 6 minutes, 21 seconds almost 1 lakh 90,000 KL in FY26 while our display margin improved to 11.03% 6:28 6 minutes, 28 seconds supported by better cost efficiency and operational flexibility. The refinary business reported revenue of 749 crores with a bida margin of 3.74% in FI26. 6:39 6 minutes, 39 seconds Overall we believe industries remain well position supported by its strategic capacity expansion and continued focus on efficiency and backward integration. 6:49 6 minutes, 49 seconds Thank you. So are we open for question and answer? 7:02 7 minutes, 2 seconds Yes. 7:03 7 minutes, 3 seconds Thank you very much. We will now begin the question and answer session. 7:07 7 minutes, 7 seconds Anyone who wishes to ask a question may press star and one on the touchstone telephone. 7:13 7 minutes, 13 seconds If you wish to remove yourselves from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. 7:23 7 minutes, 23 seconds Ladies and gentlemen, we will wait for a moment while the question cue assembles. 7:43 7 minutes, 43 seconds The first question is from the line of Harshett from Robo Capital. Please go ahead. Uh hello. Thank you for the opportunity. 7:51 7 minutes, 51 seconds Am I audible? Yes. Uh yes. 7:57 7 minutes, 57 seconds want to understand like what is the revenue and a beta outlook for FI 27 and 28 8:06 8 minutes, 6 seconds revenue for FI 27 and 28 you are asking so we are expecting to you know uh see the growth in revenue uh with the coming 8:14 8 minutes, 14 seconds uh uh coming new uh additional capacity of 150 KPD so uh from that you know if we run that at 100% utilization so we 8:22 8 minutes, 22 seconds are expecting somewhere around 300 course from that 150 K uh right then and aida margins 8:31 8 minutes, 31 seconds abita margins will try to maintain the same similar margins because with this additional 150 kp unit uh uh our 8:38 8 minutes, 38 seconds overhead would remain the same and profitability would increase so uh so yes we are seeing the similar bit 8:46 8 minutes, 46 seconds margins going forward rather there would be improvement in the beta margin right so the 150 capacity that we have 8:54 8 minutes, 54 seconds put up so what is a utilization expectation for you know [clears throat] uh like would we be able to utilize 100% in the forest itself or how would it go? 9:04 9 minutes, 4 seconds No you see that the 150 KPD capacity will not be utilized fully to the extent 9:11 9 minutes, 11 seconds that we have been operating this 400 KPD plant unstopp about four five years. So 9:18 9 minutes, 18 seconds we did not have any time to you can say uh in for yearly maintenance. So with this commissioning on that that will 9:26 9 minutes, 26 seconds help us that there will be no drop in the production and we'll able to meet the market demand also uh the additional demand is also coming from the overseas 9:35 9 minutes, 35 seconds and other private players with the increase in the crude prices. Earlier the national branding was not so much profitable for the it was just a binding 9:44 9 minutes, 44 seconds upon them. Now they are using it with a pleasure because they are earning you can say substantial amount as compared with the increase in the crude prices. 9:54 9 minutes, 54 seconds So our expectation is that we'll be able to at least utilize the 75% of the capacity starting from the uh second 10:02 10 minutes, 2 seconds quarter starting from the sorry second quarter from the second quarter. 10:09 10 minutes, 9 seconds So by by June I think our testing period is going on and another 15 days trial production will commence and we should 10:16 10 minutes, 16 seconds be able to commence the uh to operate the plant at the rate by first week of July. 10:26 10 minutes, 26 seconds Right. Understood. And my second question is regarding EITA. Right. So in a distillery business, we did an EIT of 11.8% in quarter. 10:36 10 minutes, 36 seconds So uh is it something that we uh you know think that we would be able to maintain this margin or you know how do you see the AITA going forward for a distill business? 10:46 10 minutes, 46 seconds uh show that uh this beta margins will not go down as per our expectations but can't you can say you cannot commit 10:54 10 minutes, 54 seconds anything it's agro based commodity market and commodity are subject to various risk like going on up and down 11:01 11 minutes, 1 second but see that we have shielded our company to have this constant a bit margins as mentioned in the opening 11:09 11 minutes, 9 seconds speech of uh putting up a rice pro boiler where we uh we are shielded from this high fuel cost as of now the other 11:18 11 minutes, 18 seconds factories are having. So and with the increase in the capacity our overhead still remains the same and with the you 11:26 11 minutes, 26 seconds can say consolidation of this vegetable oil business from one unit to this present unit where the we have got power 11:33 11 minutes, 33 seconds and steam in hand with the overhead coming down the the finance cost coming down I think we will be able to maintain 11:42 11 minutes, 42 seconds or rather improve the bit margin of 11.8 Look all understood because one of the peer was saying key you know ethanol business 11:50 11 minutes, 50 seconds they'll do 12 to 15% a better so was just you know getting some clarity on that that's all 11:57 11 minutes, 57 seconds you you see that uh they might be right if we we got the 100% allocation then 12:04 12 minutes, 4 seconds this could be as high as 15% as the PF were indicating to you but as we mentioned that over 50% of the capacity 12:13 12 minutes, 13 seconds of the flexible capacity is on account of ENA and the special denature spirit we are catching the farm 12:20 12 minutes, 20 seconds and uh demand where the the prices are subject to the uh raw material prices so we don't get that kind of a fixed margin 12:29 12 minutes, 29 seconds and this ethanol business you sometimes lose that the grain prices or the raw milk prices goes up you cannot pass it 12:36 12 minutes, 36 seconds on that increase to the OMC whereas in ethanol the and the other spirit market if the prices of the motor comes down 12:45 12 minutes, 45 seconds you have to pass on to the consumer that if the prices goes up then you have to recover from the consumer. So this is a 12:52 12 minutes, 52 seconds stable and very few distur licensing. I think uh our business will be much more stable as compared to the standard control. 13:04 13 minutes, 4 seconds All right sir. Understood. Thank you. That's all from us. I joined by this. Thank you. 13:12 13 minutes, 12 seconds Thank you. 13:13 13 minutes, 13 seconds Next question is from the line of Vikram Kotek from KCP Limited. Please go ahead. Yeah. Hi. Hi sir. I'm audible. 13:22 13 minutes, 22 seconds Yes, you are audible. 13:23 13 minutes, 23 seconds Yeah. So, sir, you know, accept my ignorance. I'm attending this call for first time. So, pardon me if I ask some question which are very basic. So, sir, 13:32 13 minutes, 32 seconds I was seeing your website and a few of the business like distillary, bio, diesel, edible oil, real estate. Now you said edible oil you kind of exited and 13:40 13 minutes, 40 seconds you are looking at I see very small turn over there but uh you know you are in align businesses as far as distillery or 13:47 13 minutes, 47 seconds IML IM country liquor biodeiesel why real estate is it is it uh you know synergetic to your overall requirement 13:55 13 minutes, 55 seconds or is just because you are spare land and now you're building up there just just help me out with that no you see that if you go uh towards the 14:04 14 minutes, 4 seconds financial reserve the real estate business is as old as 15 years back. We are not having any fresh project. All 14:12 14 minutes, 12 seconds the only the projects which were taken up in 2005 to 10 had been completed and whatever we stock that in the shape of 14:21 14 minutes, 21 seconds properties coming in the shape of cash in the company. So we do not have any exposure for for the last 15 years in the real. 14:30 14 minutes, 30 seconds No. So no real estate only the vegetable oil the biol and the 14:40 14 minutes, 40 seconds punjab medium liquor and the right so so no further I said no no no not much edible oil so you'll focus on the 14:47 14 minutes, 47 seconds no no edible oils will be there edible oils will be there because we have got a solvent extraction plant vegetable oils 14:56 14 minutes, 56 seconds will be there but not in a packed farm we are only catering to the bulk demand in the shape of a bulk supply. So that 15:03 15 minutes, 3 seconds revenue will always be there about 7 to 800 crores per okay. Okay. And the second question, 15:12 15 minutes, 12 seconds where do you see the company next five years in terms of strategic direction? 15:15 15 minutes, 15 seconds I'm not asking for revenue numbers or something, but how do you see yourself from here to five year later? What will be your area of focus? What will be your 15:24 15 minutes, 24 seconds biggest business in the overall category? How do you see the you know scenario business scenario and your and your internal capacity in terms of team 15:32 15 minutes, 32 seconds and and the leadership and the overall business model just want to understand a little bit three to five year vision of your company. So sure uh you see that at 15:42 15 minutes, 42 seconds present our we are focusing on bofuel first of all we uh we will be having the 15:50 15 minutes, 50 seconds current you can say in about two years we'll be putting up another you can say small plant to get into the pio at 30 15:57 15 minutes, 57 seconds which the work has already started and we hope to commission that plant uh within one and a half year two years so that will take the overall capacity of 16:06 16 minutes, 6 seconds the company from 900k to 1150 50k that's a substantially good quantity and further we will be you can say focusing 16:15 16 minutes, 15 seconds on a CVG uh from uh you can say that also this from biomass we we plan to 16:23 16 minutes, 23 seconds have the long-term vision of putting up a CVG plant also and later on you see that this this sector is going to cater 16:32 16 minutes, 32 seconds to the sustainable aviation fuel market also. So we we see that in the coming four five years you will see a lot of 16:39 16 minutes, 39 seconds change in this bofuel market and with this present energy crisis and the environmental angle you see that we have 16:46 16 minutes, 46 seconds to feed the 140 cr people. So we have to give the job. 16:51 16 minutes, 51 seconds So the the main focus of the government of the entire nation is on the account of having a cleaner environment. 17:00 17 minutes Secondly to reduce the import dependence. Thirdly to you can say increase the farmers income and so on. 17:09 17 minutes, 9 seconds So state formation. So by 2003 you must have been reading in the news since by 2030 the Europe has come and mandate 17:18 17 minutes, 18 seconds that the all the you can say aviation sector will be using about 30% of the sustainable emission fuel generated from 17:27 17 minutes, 27 seconds this farm energy not only fossil fuels part of it. So we see a green future in our company as this bofuel and other 17:36 17 minutes, 36 seconds things coming in and we have positioned ourselves within five years we should be a total detary company from which we are 17:45 17 minutes, 45 seconds focusing also which we have been you must have noticed for our financial results the financial cost is coming down year to year and with the 17:53 17 minutes, 53 seconds relaxation of our this relative variable inventory which is like in various dealers and other parts for out of which 18:01 18 minutes, 1 second the substantial amount has already been realized and we hope to realize with four to five months or 6 months the entire inventory part of it. So that 18:10 18 minutes, 10 seconds will add to the uh cash consolidate the cash portion of the right sir. 18:15 18 minutes, 15 seconds In five years we see a great future and further after this we will be entering to the CBG section and the sustainable 18:23 18 minutes, 23 seconds section and plus the there are technologies coming up blending this in the diesel also. 18:30 18 minutes, 30 seconds Yeah. 18:32 18 minutes, 32 seconds Yeah. So last question from my side is you know you also are the EMA supplier to many large uh you know liquor 18:39 18 minutes, 39 seconds companies and also you are on side you're also building your own brand portfolio on the liquor brand as well as IMF. So where do you see what kind of 18:47 18 minutes, 47 seconds size you want to build in uh you know liquor brand and sorry in in in country liquor and also in IML what kind of size 18:55 18 minutes, 55 seconds you're looking next five years and why this is around Punjab only why not it is India so I just want that's another curious question 19:02 19 minutes, 2 seconds uh so which this PML Punjab medium we are only authorized to sell it in Punjab only the next segment we propose to 19:10 19 minutes, 10 seconds enter in the coming years is IMF Indian made for lea yeah so we are taking various steps and soon we'll be 19:19 19 minutes, 19 seconds coming up with various brand and with IMF entering to the north India then to the prime so we do have that brand first 19:28 19 minutes, 28 seconds we wanted to consolidate our portion have a good amount of cash with the company because this IMF business first 19:34 19 minutes, 34 seconds we'll take away about it's about 100 in the pocket you you for the launching of 19:41 19 minutes, 41 seconds this IMF brand on basis so first you wanted to have the expansion all the expansion completed have a handsome you 19:49 19 minutes, 49 seconds can say margins with the company cash with the company we don't want to borrow money and launch this uh IMF business 19:56 19 minutes, 56 seconds plan in India because that will be a very high cost for the company or maybe this high risk for that coming years we 20:04 20 minutes, 4 seconds do have a plan to have this business launch in first then sure so and what% 20:14 20 minutes, 14 seconds this market is growing at 12% and this PMR market we are also uh growing at about 18 to 20%. 20:23 20 minutes, 23 seconds Right. Right. And sir what is the current debt level net debt level on the balance sheet as on March 26 20:29 20 minutes, 29 seconds about 300 cr 35 cr including fund based and non fund based 20:36 20 minutes, 36 seconds thank you thank you so much about 120 cr is on interest of a venture that's paying for 4 4.25% 25% of the rate of return. 20:45 20 minutes, 45 seconds Okay. So, what's the average cost of interest for us? 6 7% roughly. Less than 7%. 20:52 20 minutes, 52 seconds Okay. Less than seven. Okay. So, all the best and have a great future. Thank you for answering all the questions in a detail. Thank you, sir. Thank you. 21:02 21 minutes, 2 seconds Thank you ladies and gentlemen. In order to ensure that the management is able to address questions from all the participants in the conference, kindly 21:11 21 minutes, 11 seconds limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. We will take our next question from the line of Trrenit from SJ Investments. 21:21 21 minutes, 21 seconds Please go ahead. 21:23 21 minutes, 23 seconds Uh hi management. Uh thank you for giving me the opportunity. So one thing I wanted to understand in terms of our oil business, you mentioned that we're 21:31 21 minutes, 31 seconds only going to do bulk sales. Is there any specific reason behind it? I understand you want to focus on the other things but is it in terms of 21:38 21 minutes, 38 seconds margins is it better could you just explain what's the strategy behind that uh adop business of the company is as 21:48 21 minutes, 48 seconds old as uh we are in the business for last 45 years so we have attained some of expertise in that the the unit which 21:57 21 minutes, 57 seconds was situated within the city was to be shut down because of the various uh government uh you can restriction as 22:05 22 minutes, 5 seconds regard having a red category unit in the density of the thickly populated area. 22:11 22 minutes, 11 seconds So we have to shift that production capacity at uh you can say our present distite we are having which where we are 22:19 22 minutes, 19 seconds having a you can say cheap power the same infrastructure and the cost of production has come down to compete with the you can say package industry as of 22:28 22 minutes, 28 seconds now will be difficult for us as they sited quite far away uh from the port. 22:33 22 minutes, 33 seconds So bringing the raw material from the poor side and again spending it pan India uh throughout India uh the logistics does not work of that count. 22:43 22 minutes, 43 seconds So we just want to remain our presence and just like to just for your information the the focus of uh the you 22:53 22 minutes, 53 seconds can say policy makers of the government is on the reducing the import dependence on the vegetable oil. At present the 23:00 23 minutes vegetable oil is the third largest foreign exchange labor in the country. 23:05 23 minutes, 5 seconds The first is the crude oil, the second is the gold and third is the vegetable oil. So with the you can say government 23:12 23 minutes, 12 seconds taking step for crop diversification spaces in the state of Punjab and Hana and Ratan for encouraging the farmers in 23:22 23 minutes, 22 seconds growing oil field. So we want to be present there and when the time comes because earlier we were what we were doing is we were buying oil seed and selling the final product in the market. 23:33 23 minutes, 33 seconds So we had margins at every state. Now with the simply bringing crude oil and just refining it does not give us so 23:41 23 minutes, 41 seconds much margin so that we are able to compete with the old based refinery or MNC. So we want to position ourselves 23:48 23 minutes, 48 seconds when the opportunity come we can again uh you can say uh scale up on business with that 23:57 23 minutes, 57 seconds understood. So and was shifting of the plant expensive and what did we end up doing with the land because did we just relocate existing plant or did we have to invest more into it? 24:07 24 minutes, 7 seconds So uh it's a right question the about uh say 25 to 30% the machines 24:15 24 minutes, 15 seconds which were working in workable condition and which were not taking over the backward we have already shifted to this and those are the commission that 24:24 24 minutes, 24 seconds started the production. Rest of the machines have been uh sold in the market and we are getting the uh you can say of 24:32 24 minutes, 32 seconds the primary machinery by selling it and the land person we have put it for sale. 24:38 24 minutes, 38 seconds So we we hope to realize the better value for the product and that will be uh putting back into the cash which will 24:45 24 minutes, 45 seconds further consolidated the cash portion of the company in uh you can say putting up the further expansion. 24:52 24 minutes, 52 seconds We are looking for a uh land deal in the near future. 24:57 24 minutes, 57 seconds What is the tenative signs of this uh land deal sir? 25:00 25 minutes Uh about 80 acres of uh land in the city. 25:07 25 minutes, 7 seconds Uh what could be the value in the particular city? 25:10 25 minutes, 10 seconds Uh value as of now very difficult to say but we should be able to realize the uh close to about 30 30 crores of this of that part. 25:22 25 minutes, 22 seconds understood sir and coming to a liquor business I understand that you have been doing a lot of business near with less allocations from the overseas I was just 25:30 25 minutes, 30 seconds wondering in terms of branding what is the strategy and how are we going about it to go to market like in terms of investments in advertising or let's say 25:38 25 minutes, 38 seconds hiring a team for it could you just explain strategy beyond developing our our proprietary liquor brand 25:45 25 minutes, 45 seconds yes uh you see that we have uh basically we are situated at a remote site in the state of Punjab Ashinda where the 25:54 25 minutes, 54 seconds connectivity and the other issues are there for that we have already uh you can say metalize our corporate office at 26:01 26 minutes, 1 second Chigar which has started functioning and slowly we'll be shifting our uh you can 26:07 26 minutes, 7 seconds say the activities there from where we we plan to have the expertise and the 26:14 26 minutes, 14 seconds brand launching so we can see it's not a you can say very short-term vision it has to be very long-term with the 26:22 26 minutes, 22 seconds sustainable cash flows with you. So we'll we have putting all our efforts uh to cater to that IMF segment from our 26:29 26 minutes, 29 seconds corporate office. So already we have only job. So we have had experts other people for this entering into MFB and 26:39 26 minutes, 39 seconds regarding EMA sales not only the EMA sales this is the you can say that we are catering to the farmer sector we are 26:47 26 minutes, 47 seconds selling industrial alcohol we are selling special denature spirit to cater to the various industries. 26:55 26 minutes, 55 seconds So this we have this this is the benefit of a flexible you can say having a dual lensing otherwise with 400 KPD plant if 27:04 27 minutes, 4 seconds the allocation was about 220 K per day our 80 KP would have been lying idle and the company would have been in trouble. 27:13 27 minutes, 13 seconds So this is the most benefit our company has and the entry barrier to EMA business is very tough and takes it's a 27:21 27 minutes, 21 seconds very long time takes long time public hearing does not get through. So that kind of a thing to we we hope to have 27:28 27 minutes, 28 seconds this better business of EMA because MFL market in India is growing at about 12 to 13%. 27:38 27 minutes, 38 seconds Got it. But could you give some perspective on the interrupt you have joined the back thank you. 27:48 27 minutes, 48 seconds A reminder to all the participants kindly restrict yourselves to two questions. We will take our next question from the line of Sachi Mittal 27:56 27 minutes, 56 seconds from concept invest 12. Please go ahead. Uh am I audible? 28:04 28 minutes, 4 seconds Yes. Yes. Yes ma'am. 28:06 28 minutes, 6 seconds My first question is in FI26 operating cash flows improve sharply crankly aiding please please 28:16 28 minutes, 16 seconds speak loudly and clearly we are not we are not fully audible 28:23 28 minutes, 23 seconds am I audible now yes better uh in file in financial year 2026 28:31 28 minutes, 31 seconds operating cash flows improved sharply primarily aided by working capital release. Is the improvement sustainable 28:39 28 minutes, 39 seconds or primary a one-off benefit arising from the liquidation of edible oil inventory? 28:46 28 minutes, 46 seconds Now you see that from this year that we have grown that the profits of the company has gone up by 18 20%. And there 28:54 28 minutes, 54 seconds is no capex at present. Earlier every year there was a capex the cash flow the working capital requirement was more 29:01 29 minutes, 1 second because of the this factors and secondly with the ENA business and this special data spread business is on cash and 29:09 29 minutes, 9 seconds carry basis whereas we had a huge outstanding if you operate the plant 100% on ethanol. So there is a 29:16 29 minutes, 16 seconds outstanding of 21 days from the OMC side. So that cycle has also come down and it's a it's a totally not temporary 29:24 29 minutes, 24 seconds business. The company has sufficient cash flow there has uh you can say those some you can say liquidation of edible 29:31 29 minutes, 31 seconds oil inventory is helping us but we are having a sustained cash flow wherein the entire inventory of this this working 29:40 29 minutes, 40 seconds capital you can see utilization of the working capital has come down further coming down in the coming year. 29:48 29 minutes, 48 seconds Thank you sir. My second question is can you help me understand the sensitivity of aa margins to fluctuations in key raw 29:56 29 minutes, 56 seconds material prices such as me and margins will you say that the business 30:04 30 minutes, 4 seconds we should have a constant margins because the increase or decrease of the 30:11 30 minutes, 11 seconds raw material cost is being passed to the buyer only the fixed fixed prices of ethanol so 50% % business uh is on 30:20 30 minutes, 20 seconds account of the variable cost if penny is being passed to the you can say consumer. So the we hope to maintain 30:29 30 minutes, 29 seconds same kind of market rather we'll have some improvement with the in capacity as mentioned earlier of 100 KPD with that 30:38 30 minutes, 38 seconds our you can say the overhead cost or the finance cost has been coming. 30:47 30 minutes, 47 seconds All right sir thank you. 30:51 30 minutes, 51 seconds Thank you. Next question is from the line of Himmanu Basani from Pinpoint X Capital. Please go ahead. 31:00 31 minutes Um hi sir, thanks for the opportunity. 31:02 31 minutes, 2 seconds So my line of questions are more on the green energy side and the new ventures. 31:06 31 minutes, 6 seconds Um sir on the biodeiesel viability um with all the geopolitical scenarios and the rise in uh diesel prices are we 31:14 31 minutes, 14 seconds seeing some uh price recent policy uh you know price evasions that is going on and if that is happening how are we 31:22 31 minutes, 22 seconds looking to participate in that with our 75 KPD capacity. 31:27 31 minutes, 27 seconds You see that the biological capacity of our company is 75 K LP per day but at present we are not able to manufacture 31:34 31 minutes, 34 seconds because of the there has not been any price invision or the price uh pricing policy or the mandate actually you see 31:42 31 minutes, 42 seconds that earlier the biodiesel was being purchased by OMC at 100 108 rupees a liter but with the with the in the 31:50 31 minutes, 50 seconds absence of mandate so they reduce the prices according to the crude uh you can say the crude viability 31:57 31 minutes, 57 seconds crude derives from the crude. So there was no green energy in the bio section. 32:03 32 minutes, 3 seconds So we we planned our plant in a such a way either we could use it as a vegetable oil refinery or we can use it 32:10 32 minutes, 10 seconds as a bio plant. So at present we are operating that of a plant on a vegetable oil refinery. So whenever there is a you 32:19 32 minutes, 19 seconds can say a vision or the pulse region of the biodeiesel race we'll be able to participate and we are already enrolled 32:27 32 minutes, 27 seconds as a uh you can say bodies supplier with all the so so just on that so are we seeing some 32:36 32 minutes, 36 seconds on ground inflctions with the rising price of diesel and everything you see that this is a government policy 32:44 32 minutes, 44 seconds better to buy the we buy diesel and these rates or just keep away and concentrate more on patrol. They may not 32:52 32 minutes, 52 seconds be thinking that the file is lying with the PMO office. So can't say can't comment upon anything as to what what is 32:59 32 minutes, 59 seconds in their mind and how the they will react. But certainly these are the positive indications that the crude price has gone up substantially high and 33:07 33 minutes, 7 seconds the cost of biodeiesel should be revised by the OMC but they're taking their own time so can't comment. So we did our 33:16 33 minutes, 16 seconds practical while putting our plant so that our plant our capacity does not remain idle. So we are using our 33:22 33 minutes, 22 seconds capacity uh for the the defined vegetable section. So that's also giving almost as the same margin as we would be getting for the biod. 33:34 33 minutes, 34 seconds Understood. And sir on the biog um we were evaluating a 20 megat 20 mtp 33:42 33 minutes, 42 seconds plant right. Um how are things right now? What is the process and how are you looking at things right now? 33:49 33 minutes, 49 seconds Uh you see that as mentioned that our 100 KNPD plant has been commissioned at Matilda and is under testing. So we did 33:57 33 minutes, 57 seconds not have the intention to engage another team to put up this plant of Satyabad where 250 KPD uh this ethanol plant and 34:07 34 minutes, 7 seconds 20 tons GBG plant has been planned. So that site is ready now activated. We are moving forward and we should be able to 34:16 34 minutes, 16 seconds commence the uh you can say close the close books schooling. 34:21 34 minutes, 21 seconds uh close the books by the uh next month and we should be able to start the construction and within two years we will be able to uh commission our 200 K 34:30 34 minutes, 30 seconds LPD plant of you can say ethanol and after the commissioning of that plant another one year we'll be take taking 34:38 34 minutes, 38 seconds from putting up 200 20 uh CBD okay so it is almost like from 3 years 34:46 34 minutes, 46 seconds from now can we say that yes because we want to base TBG raw material and rice crop the 34:53 34 minutes, 53 seconds biomass where there is a little uh technological problem at present but that is being solved and number of pilot 35:00 35 minutes plants have been commissioned by the various suppliers. So we are you can say uh constantly watching that the 35:08 35 minutes, 8 seconds developments as far as the technology part of it and the commissioning of this because we have already procured brought the land and this that's the part of the 35:17 35 minutes, 17 seconds extension program within two three years. 35:21 35 minutes, 21 seconds Okay unders and sir on the I'm sorry to interrupt him please rejoin the queue for followup question. 35:27 35 minutes, 27 seconds Sure. Thank you ladies and gentlemen. We will take due to time constant we will take our last question from the line of pashil from VA system private limited. 35:37 35 minutes, 37 seconds Please go ahead. 35:40 35 minutes, 40 seconds Good afternoon sir. My question is uh regarding the land as the promoters have got such a good experience in real 35:48 35 minutes, 48 seconds estate development. Why should the company not develop this real estate instead of selling it out? 35:54 35 minutes, 54 seconds Uh it's a very good question. You see that at present uh the as a management as a 36:02 36 minutes, 2 seconds promoter we are focusing ourself on the green energy and other parts of it. So we require fund for that and developing 36:09 36 minutes, 9 seconds a real project and selling it takes a long time. It's not a metro city. It's a 36:16 36 minutes, 16 seconds free time city where the the the migration is not to that extent that we could develop that into a real estate 36:23 36 minutes, 23 seconds project of housing or commercial project. So realization and the uh theation period is quite high. So let 36:32 36 minutes, 32 seconds the local people have the profit from other things and we have a we concentrate towards our poor business. 36:40 36 minutes, 40 seconds So it's not the core business of the company to enter into a uh real estate as of now. It's a very very long process 36:47 36 minutes, 47 seconds to get the sanctions and and get the development then and again sell to the various prospective buyers. So we don't 36:55 36 minutes, 55 seconds want to waste our time. We just want to get the cash and put the same into the business reduce our kind of cost and achieve our expansion plan. 37:05 37 minutes, 5 seconds I appreciate that. But I think to have such a big land pass in the heart of the city and to sell it for I think you say 30 crores doesn't really make any sense. 37:16 37 minutes, 16 seconds No, it's here the rates are such only that's only about less than 2 cr acre 37:24 37 minutes, 24 seconds which is the the cost of buying of this land is 10,000 rupees per acre and uh we 37:30 37 minutes, 30 seconds are we will be able to get 200% after that. So in the you don't compare this 37:37 37 minutes, 37 seconds to Bombay or something like that. No but I would have 37:45 37 minutes, 45 seconds it's a very price uh to get this kind of I don't know I would say in such a case we should be given the first right of refusal. 37:57 37 minutes, 57 seconds We'll definitely contact you when we when we have the final definitely keep in mind your offer and contact. 38:07 38 minutes, 7 seconds Please do that. Thank you. 38:13 38 minutes, 13 seconds Thank you ladies and gentlemen. That concludes our question and answer session. On behalf of Enquire Equities, that concludes this conference. Thank 38:22 38 minutes, 22 seconds you all for joining us today and you may now disconnect your lines.