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Praj Industries Ltd
Earnings Call Analysis
Q1-2025 Analysis
Praj Industries Ltd
Praj Industries Limited has kicked off the first quarter of FY 2025 with a consolidated income from operations of INR 6.99 billion, representing a slight dip from the INR 7.36 billion in Q1 FY '24. Despite this decrease in revenue, the company recorded a profit before tax (PBT) of INR 788.8 million, marginally up from INR 777.03 million year-over-year, indicating strong underlying operational performance.
Notably, the profit after tax surged to INR 841.81 million from INR 586.72 million in Q1 FY '24, benefiting significantly from an exceptional gain related to a land sale, which contributed to an after-tax profit for this period. With 72% of revenue comprising Bio-Energy, 20% from Engineering, and 8% from Praj Hipurity, the diversified revenue streams demonstrate solid business resilience.
The company achieved a commendable 24% increase in export revenue compared to the same quarter last year, accounting for 23% of total revenue. This reflects Praj's growing international footprint and ability to tap into global markets effectively, enhancing overall margins.
The EBITDA margin improved significantly by 291 basis points over the previous year, driven by moderation in input costs and favorable revenue composition. The company saw an uptick in margins largely due to transitioning projects from higher-cost to lower-cost materials, showcasing prudent operational management.
The order intake for the quarter stood at INR 8.88 billion, with 68% emerging from domestic orders. The current order backlog is robust at INR 40-44 billion, with 67% of these orders being domestic. Notably, 52% of the new orders stemmed from the Bio-Energy segment, highlighting prevailing demand in this area.
Looking forward, Praj anticipates improvement in domestic Bio-Energy activities as regulatory challenges resolve, particularly regarding feedstock approvals. The firm remains confident in achieving growth targets, indicating it is well-positioned to meet the increasing transition to renewable energy solutions.
For capital expenditures, Praj plans to allocate approximately INR 75-100 crores this fiscal year, focusing on ramping up operations at its GenX facility in Bangalore to improve production capabilities. The management expressed optimism about revamping operations, with revenue generation from this facility expected to normalize in the latter half of FY '25.
Management conveyed that current market conditions, including delays related to national elections and feedstock availability, have hindered faster order execution. However, they expect to see clarity and a return to normalized operations as the year progresses, with market conditions improving substantially.
Praj Industries portrays a strong outlook fueled by innovative projects, strategic geographic expansion, and an enhanced order pipeline. The firm remains committed to diversifying its offerings across the Bio-Energy and Engineering sectors, forecasting substantial opportunities to enhance revenue streams over the coming years, reaffirming its commitment to a significant scale-up by 2030.
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Ladies and gentlemen, good day, and welcome to Praj Industries Limited Q1 FY '25 Earnings Conference Call. [Operator Instructions] I now hand the conference over to Mr. Anuj Sonpal from Valorem Advisors. Thank you, and over to you, sir.
Thank you. Good morning, everybody, and a very warm welcome to you all. Sorry, good afternoon now. My name is Anuj Sonpal from Valorem Advisors. We represent the Investor Relations of Praj Industries Limited. On behalf of the company, I'd like to thank you all for participating in the company's earnings conference call for the first quarter of financial year 2025.
Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings conference call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions.
The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review.
Now let me introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We firstly have with us Mr. Shishir Joshipura, CEO and Managing Director; and Mr. Sachin Raole, CFO and Director of Resources.
Without any further delay, I request Mr. Shishir Joshipura, to start with his opening remarks. Thank you, and over to you, sir.
Thank you, Anuj. Good day, everyone. I welcome you to Praj Industries Earnings Call for quarter 1 FY '25. I trust all of you had the opportunity to go through our results for the quarter that ended 30 June 2024.
Earlier this week, our honorable finance minister presented the union budget, where a specific policies outlined indicating appropriate pathways for energy transition to support Indian and Energy security. The budget strongly supports the agri industry ecosystem, which will help address feedstock units, challenges and those by manufacturing.
National cooperation policy for systemic quarterly and all around development on the cooperative sector, we inspire biofuels industry stakeholders to favorably consider long-term investments. Our financing plan for private sector driven commercially scaled research and innovation is a positive test for development of biometric technology in the country. Further, a taxonomy for climate finance for enhancing the availability of capital for climate adaptation and mitigation will support achievement of the country's climate commitments and transition. Prime Minister's special package for skilling program will help feed the employment demand penetrate the propagation of the Bio-Energy projects.
Coming to business performance. This quarter's performance reflects the changing dimensions of our business dynamics. We are witnessing a healthy build of opportunity in key strategic areas of the company's business. Our continued focus on innovation at the leading edge of technology will enable us to deliver healthy performance going forward.
Coming to domestic Bio-Energy business. The quarter witnessed a slowdown of activities mainly from the unresolved feedstock situation, as also the central election. The prospective customers await for a clear long-term direction to emerge on clearance to use molasses B syrup at feedstocks and also the renewal of embargo on issue of rights from FCI for ethanol production. This will enable the new projects to be planned and existing projects to move forward with execution.
We continue to see new capacity buildup dominated by starchy feedstocks with over 75% of our domestic order book coming from starchy feedstocks based plants.
On International Bio-Energy front, we received a very interesting order for production of low-carbon ethanol using lactose as feedstocks, which is separated from milk, from a U.S.-based customer. As stated during last earnings call, grain-based ethanol projects are gaining increasing acceptance in the Brazilian market. We have several strong leads and dialogue for ethanol projects based on grain and we are in jadvanced stage of negotiating several potential customers for strategic technology solutions.
On the GBA front, India is set to be the global headquarters for the alliance. The working committee has framed a work plan for finalization of the charter for the GBA. As we move forward, GBA will open several opportunities for Bio-Energy projects in many parts of the world. Our service business saw a healthy growth in order book and revenue in this quarter, both in domestic as well as international markets. We continue to see increasing traction for our offering, which is expected to drive future growth in this business.
[ Bio-Chemistry auto texture ] is also increasingly finding higher interest, and we now have contract one from Thailand and Zambia. p
On 2G front, IOCL plant recommissioning is progressing as per plan. We are working closely with IOCL team to resolve the unique situation and ramp up production in gradual manner. We have commenced feasibility study for a straw-based ethanol plant in Spain for the Spanish multinationals.
On CGD front, the inquiry pipeline is developing in a healthy way that is expected to [ transform ] business as we progress through the year. We are setting up a pilot plant in the United States for testing R&D generation from waste streams in a grain to ethanol project in collaboration with the U.S. based [indiscernible].
Once the trials are successfully completed, it will open a new waste stream to R&D application in grain to ethanol segment for us globally. On the biopolymer front, Praj is the first Indian company to indigenously develop technology for lactic acid and lactide. We have produced the first batch of [ lactic acid ] 90% at our newly set up demonstration plant in Brazil. This is a milestone development in the biomanufacturing domain.
Understanding the importance of feedstock in Bio-Energy development, Praj has established a center of excellence in innovation with Vasantdada Sugar Institute for the integration of farm to fuel model. The CoEI will focus on developing alternate feedstocks through intercropping model, for example, the feedstock of sugarcane made [indiscernible].
Moving on to Engineering businesses. On the ATC front, we have completed manufacturing of our first equipment from the GenX facility in Bangalore. We have since shipped this containment as well. We have received a significant engineering order for complete modernization of a [ SaaS ] project in the United States on ATC pathway. We have received another contract for motorized solution of carbon capture for a blue hydrogen project in Europe.
Our zero liquid discharge business is also gaining momentum and with increasing acceptance of our modularized solutions for our customers, we had received an important contract for modularized systems from Indonesia. We have completed the installation of IOCL [indiscernible] project, and we are in the process of handing over the plant.
Our PHS business continued to deliver consistent performance and have seen strong traction from our high capacity fermented offerings. PHS is setting up a very large fermentation complex for a very reputed pharma company in Southern India.
With this, I will now hand over to Sachin for his comments on the financial performance.
Thank you, Shishir. The consolidated income from operations stood at INR 6.99 billion in Q1 FY '25, compared to INR 7.36 billion in Q1 FY'24. PBT before exceptional items for the quarter stood at INR 788.8 million as compared to INR 777.03 million in the corresponding period for the last year.
PBT after exceptional item is INR 1.07 billion. The exceptional item is pertaining to the sale of a land. Profit after tax stood at INR 841.81 million in Q1 FY '25 as compared to INR 586.72 million in Q1 of FY '24.
Of the total revenue, 72% is from Bio-Energy; 20% is from Engineering; and 8% from Praj Hipurity business.
Export revenues accounted for 23% of Q1 FY '25, showing 24% increase in corresponding quarter of last year. EBITDA margin has also seen an improvement of 291 basis points over corresponding quarter of the last year. This improvement is on account of moderation in input cost and also the composition of revenue. The order intake during the quarter was INR 8.88 billion, with 68% from domestic market.
Of the total order intake, 52% came from Bio-Energy, 38% from Engineering and the balance 10% from Praj Hipurity. The order backlog as of 30 June 2024 is at INR [ 40..44 ] billion, comprising 67% of domestic orders.
Cash in hand as of June 30, '24, is INR 8.3 billion. In yesterday, AGM shareholders have approved the payment of final dividend of 300% per share.
I now conclude my remarks, and I would like to thank you all for joining us on this call. We would now be ready to discuss any questions, comments or suggestions you may have. Thank you.
[Operator Instructions] The first question is from the line of Mohit Kumar from ICICI Securities.
My first question is, how has been the inquiry in the last couple of months on the...
We can't hear you well, sir.
Can you hear me now, sir?
No, we could not hear. Could you please speak again?
Sorry to interrupt sir, but I request you to use the handset, please.
I'm using the handset. It is better now.
Let's try. Please go ahead.
My question is on the how has been the inquiry in last few months on 1G. And how do you see the order inflow moving over the next few quarters? Can we expect the growth in order inflow in this year compared to last year?
Okay. So let me just paraphrase the questions that we know that we understood you well, that audio connection was not good. You're asking how is the inquiry pipeline building up for the ethanol 1G business. And do we expect the year-end to be better on the booking performance than previous year. Is that the question?
Yes. Yes, absolutely right, sir.
So if you look at the ethanol -- domestic ethanol business, especially, it is what as I said in my statement as well, there was a policy intervention around feedstock application that was allowed and permitted and that needs to get normalized, and that is what has actually impacted because 2 major feedstock streams molasses B syrup on one end and right issue from FCI on other end. Both of these were taken off the list as permissible feedstocks, which has led to a situation, a, there are inquiries, there are dialogues with customers, but we are not able to take the final step for finalization of a new job. .
On the other hand, there are also projects in execution that have come to halt because obviously, the feedstock is not resolved. There is no way we can move forward with the project. So we expect as the entire industry that as we move forward through the year, we will see a resolution of this and a more permanent long-term solution will be provided, at least to address the situation today.
I think on a long-term basis, we also have to think alternative feedstock, and we -- that is where I was referring to the CoEI we established with Vasantdada Institute to look at intercropping and what can be done. But broadly speaking, we expect -- we have a pretty healthy pipeline of the 1G domestic ethanol, and we also have reasonable visibility for the year-end order booking, which is likely to be higher than our core business.
Understood. My second question is, sir, what would be the 1G services contribution to the total revenues in Q1?
Sorry, we don't actually have a segmental kind of number. Unfortunately, I will not be able to give you a specific number for services business.
Understood, sir. My last question is can I talk about the [ generality ] and its potential in near term. And what kind of revenue contribution one can see over the next few years?
So as I was mentioning, the development is extremely huge. There is no other company in India or anywhere near about, which has even been able to develop on demands of this technology. So we are right now at a stage where we have built a demonstration plant. Obviously, we have tested within a pilot scale systems and R&D and now we've built a demo plant where we started to run the process, and we have built what I would call it the first production of lactic acid 90%.
There are steps to be covered beyond this step as well. And as we go through this development cycle, we will speak about it at an appropriate time. What is sufficient for me to say right now is that this is a huge step forward to herald an era of biopolymer, bioplastic manufacturing in the country using indigenous feedstocks and indigenous technology.
The next question is from the line of Amit Anwani from PL Capital.
First question on Brazil things. So you highlighted that the pipeline for grain-based plant is also developing there, and I think we won some order also. So I wanted more color on the Brazil pipeline. One is, is there any competition and suddenly, we're getting the grain plants there? Are we -- are we not beating there? And second, how are the payment terms and size of each plant and what kind of pipeline we can see FY '25, FY '26 from Brazil?
So as Brazil market is concerned, predominantly, it has been a sugarcane to ethanol market. But over a period of time after the sugarcane to ethanol market where [ it sort of reached its peak, ] a clear realization in Brazil as was here in India as well, where we realized that sugarcane ethanol has obviously get the ticket to the states of locations and geographies where we are producing sugarcane. .
Similar situation also existed in Brazil, for example, you will be surprised to know in Southern Brazil, there is no blending taking place for ethanol as well. I mean it's a dead end from a country, which is a 27% lending at the minimum. So there in those parts of the country, Southern Brazil, other parts Central Brazil, there is a clear push now to say what can we do with using starchy feedstocks. And that is where we stepped in and we established the first project with -- and commissioned it now so. Obviously, now there is a proof on the ground of our technology and its performance, which is helping us a great deal.
The BE8 contract that we mentioned has helped us a great deal because BE8 is an opinion leader in the region. And that particular project for whom we have become the engineering now, will help us to actually establish our credential even further. Just the fact that we are working for them has also opened a further doors apart from the fact that we've also been making independent marketing efforts in the region to establish our technology because in other countries in Southern Africa and South America, we have definitely established our performance on grain-based system. So that was -- therefore, [if we see ] now also in Brazil. We have seen several, several leads to open up. There are several dialogues. There are Engineering contracts getting from them where the model is a little different.
Usually, one would expect that you'll get a full contract to on day 1. That's not the way Brazil works. So they would like to go through steps of first engineering, finish the engineering and then get a firm grip on the overall project cost and then move forward with the establishment of the project cycle, extends a little bit differently. Overall, cycle times remain the same, maybe a month here or there. But we are very, very positive of the dialogues that are developing in Brazil. And as we go through the year, we'll talk about it more.
Sure. Secondly, on -- any update on the ultra-low carbon USA? I think the things have slow past 3, 4 months. So any expectations for this year for ultra-low carbon plants in U.S.
So for the U.S. market, we had talked about low carbon ethanol opportunity, not ultra-low-carbon opportunity to start with. This was essentially about our solutions to the existing [indiscernible] ethanol projects, to drive them, to achieve a lower carbon index number intensity number for their current operations.
As we had spoken about, the first project is under execution right now, which will come up maybe this time next year in terms of it running on the ground and commissioning. So we're still a year away from committing the first project in the United States.
What's also happening is that very clearly as the movement moves forward on SaaS production, there is a clear need for low carbon ethanol to meet the demand. And we are in dialogue with companies to see how that could move forward. There is an important consideration from the IRS perspective for notifying the 45Z applicability that sometimes break legal requirement and that is still not clarified, and we are -- everybody including the industries are waiting the clarification of 45Z. Once that is available, I think it will provide further [ impetus to the agreement ].
Sure. Lastly, sir, on...
[Operator Instructions] The next question is from the line of Vikram Suryavanshi from PhillipCapital (India) Pvt Limited.
So basically, on this straw-based ethanol order in Spain, what will be our scope of operation? Or is it like a similar to 2G project what we have done for IOCL?
So Vikram, that is the order for first feasibility engineering. So that we are [ strongly ] away from the project yet. As the feasibility study is done and we established the feasibility of the project, then probably we'll be able to answer your question better. But it will -- it is for a 2G project in Spain.
Okay. And actually, I was hoping some announcement for bioplastic because there were comments in the interim budget on giving some support for bioplastic products. But I think there was no announcement in this budget. So how would be our road map going ahead? You explained a bit, but is there any something else which government is waiting for?
So Vikram, even during the interim budget, the government had laid out a very ambitious plan of pushing biomanufacturing in the country, and that was a very clear direction set. We have no reason to believe that, that is changing. In terms of specifics of the policy, I think we have seen several announcements which are, I would say, more long term, but more sustainable in terms of pushing R&D in biomanufacturing, getting [ everything ] aligned to it because feedstock is a major issue that has been understood by everybody. So I would call this as a [indiscernible] ecosystem moves that will happen in the project. So we are very, very bullish about the fact that as we move forward, biomanufacturing, will continue to occupy its space in the sun.
Next question is from the line of Shailesh Kanani from Centrum Broking.
Sir, my first question is with respect to numbers per se. So revenue booking was down and we had higher other manufacturing expenses as well. So if you can throw some light how we should model in for the whole year? And how would that other manufacturing expenses move out? I understand this quarter, maybe we have booked some expenses for Bangalore facility, but if you can throw some light on that?
Okay. On the revenue, yes, there is a little bit late execution during this quarter, even the supply activities were on a little lesser side as compared to what we generally do in the first quarter and the site activities were on the higher side. And that's what has actually added into our other expenses. .
Your observation is right. The additional manufacturing expenses, which are happening under the other expenses, this is account of expenses which we are entering in our [ new detailed ] manual.
Going forward, we believe that yes, Bangalore facility is in a phase of getting ramped up. It has just started. First supply order has only got this much very small order, but at least from the -- establishing the factory from all the approvals point of view is getting established now. The expenses will continue to happen. And we believe that starting from second quarter or second half of this year onwards, we will see the revenue generation will start from this facility. There is some kind of a delay because of the approvals and all that, those were not in place, which we were expecting to happen in the first quarter, which are actually falling in place now and the revenue ramp-up will start happening from the H2 for GenX, and that will normalize the expenses, which we are seeing in the first quarter.
That's helpful. Sir, just continuation with that point, are there any one-offs in terms of GM. This time the gross margin seems to be very impressive at 53%. And also, if you can mention some percentage of order book, which is slow moving or kind of pending for execution?
Okay. So the gross margin, if you think -- I think partially, I reply to your question by saying that the revenue has some site-related activities for which the expenses are sitting in my other expenses. So in the procurement, the margin, the way which we are looking at, has the element of sales from side, but expenses are sitting in other expenses. If you add these 2 and figure it out the contribution margin, then there is an improvement of almost 4% improvement in our contribution margin. .
Out of that 4%, around 2% is because of the softening of the input costs. So we are still executing some old projects where the contract price is at the old price and we are now getting a benefit of that softening of the input cost. So there is around 2% benefit of that. And almost 1.5% to 2% is because of the composition of the orders, the way which [indiscernible] executed during this quarter.
Export is on a higher side, engineering orders are a little on the higher side. And that's what has contributed in the higher contribution margin. If you ask from -- going forward point of view, we believe that the positive, which we have received on the softening of input costs will continue for some time till we execute the entire old orders, which were pegged at the old material cost and the benefit of more engineering orders coming into future, which will definitely give a better margin on the bottom line point of view.
And sir, slow-moving orders in our order book?
I will not call it as a slow moving per se, but because of the -- actually into first quarter for all the manufacturing companies are seeing some kind of a slowness generally on account of the national elections and all, so that has impacted to some extent. Some clarity from the syrup [ study ] and B molasses that will expedite the execution of the orders, I don't think more than 5% of our order book will be -- can be considered as the slow moving in that sense, maybe INR 200 crores to INR 250 crores order book.
Sir, just last question from my side...
I request you to come back to a follow-up question. The next question is from the line of Deepesh Agarwal from UTI MF.
Sir, my first question is on the Engineering side. We have seen an uptick in the order inflow since the last few quarters. So have we started booking the major orders for manual facility or that is yet to come back?
So Deepesh, as [ we are explaining ] the Bangalore facilities just now getting fully functional. So we probably see in second half of the year, order execution from there. In this particular business, the facility has to be preapproved by the customers that in the contract, they say you can make it here. So obviously, since the facility was not ready, we could not get that into 100 contract, which have to be an engineered and then taken up for execution. But as we start to book new orders now, we are at that stage that we can start getting this specified as customers have approved the facility, the facility itself has obtained the necessary certifications that we will be able to take contract. So maybe towards the end of this year, end of this calendar year, we'll start to see an actual production start rolling out of the factory. In the next financial year, you will see its full force, but till that time, we'll have to see gradual build up.
And how long it will take us to go to a potential of that facility? I guess in the past, you've highlighted INR 2,000, INR 2,500 is the revenue potential. How long it would take us to that 70%, 80% of that potential?
That could easily be a 2-year kind of time frame from the time we start rolling out production.
[indiscernible] for us to build, then we have to get the engineering done and then execution. So we're looking at -- and those are not short-cycle projects. So we're looking at a 2-year kind of time line.
Okay. And sir, can you help us in terms of the pipeline, which is there for the CBG and grain based and even 2G ethanol in the domestic market for the next 3 quarters?
So for CBG, as I mentioned, as the ecosystem starts to come around, we will see gradual traction. There is -- there are issues to be resolved on the ecosystem side. At the same time, now the lending [indiscernible] becoming compulsory in about 18 months' time frame. We'll -- projects will have to start moving especially in the second half of the year. So we are already seeing an increase in activity level, inquiry level, people wanting to set up projects and discuss around those. So that's the positive development that we have seen.
It's not very smooth growing business, yes, because of different ecosystem elements that also fall in the place. But I think as we go through the year, we'll start seeing CBG develop positively as well.
Sure. And grain base and 2G ethanol, how the traction [ is sided ] in the market now?
Grain based ethanol, as I mentioned, already 25% of order book is -- out of grain based. One in [indiscernible] sale on domestic grain based ethanol will definitely be what happens to the FCI right, and I think that's a good indicator. But also, there is a clear directive unmet direction to say it has to be more of maize-based production, and we are seeing reports and from our customers as well that maize availability starting to improve. So again, these are the ecosystem elements that have to come into equilibrium with the demand on the ground. And as that starts to happen, we'll start to see. But clearly, path forward will improve a significant portion from [ stock-based ] feedstock.
Recognizing this very challenge that we have faced on the side of feedstock, I think that is where I mentioned earlier as well that our central excellence that we established with Vasantdada Institute for intercropping model that will go a long way and help you in that something that is progressing very, very rapidly.
Sure. And [ PGI ] inquiries will -- are you seeing in the market now, this inguiry?
Yes. So as I mentioned, so there is an inquiry out of Spain that we mentioned earlier in the call, on which we are working right now. There are -- but the key issue is -- and that we've already stated that everyone including us [indiscernible], happen but the IOCL project commissioning is critical for that and we are going through the steps right now to commission it full scale by the end of this calendar year.
[Operator Instructions] The next question is from the line of Prathamesh Sawant from Mirae Asset Capital Markets.
I had one question, which is [ nipped ] to our Engineering segment. So this Engineering segment, when we are catering to the ETCA, so is it just we are catering to ETCA -- is that is green hydrogen and blue hydrogen projects via carbon capture? Or do we have some other critical process equipment offering also for them?
No. ETCA is a very large segment, Prathamesh. Hydrogen is just one of them. So blue hydrogen, carbon capture, green hydrogen is one part of the segment. There is waste to energy, which is completely different. There is energy efficiency program that, so ETCA is a large umbrella of applications, including on the debt side, the whole CNG applications that is happening now in the United States, et cetera. So it is a very large portfolio of applications with [ 2 ] energy, green energy and when I say green, this is not conversion energy, this is also about energy -- enhanced energy recovery in traditional oil systems, energy system.
It is about the hydrogen systems green, blue and it is about industrial gases. So ammonia there are many, many dimensions to [ turn into ] transition. Essentially, what we're saying is the current molecules come from a carbon-intensive way and the new molecules that this segment is addressing, will some from less carbon [ intensive way ]. And that's a very broad way to understand anything that falls in that category will be catered to by this business.
Okay. So is it fair enough to understand that it will be cannibalizing some part of our earlier engineering businesses, which were earlier considered as engineering businesses that we are considering now in the ETCA segment?
No, the ETCA segment is distinctly different from that even given [indiscernible] continues. There is no let up on that. So oil and gas, chemicals, those segments where we were offering services that will continue. However, this one is very clearly a very new segment, where, as I said, high carbon intensity manufacturing or molecules shifting to low carbon intensity molecules. And that's a very broad [ project ] it is hydrogen, it is ammonia. It is the color of the hydrogen. It is green chemicals, waste energy projects, [ single ] projects . There are a whole host of [ demos of ] applications where this is open. But ETCA very different, carbon sequestration very, very different compared to the previous business. The growth will continue independently.
Okay. Okay. And sir, our offerings in this segment would be...
Sir, I request you to come back for a follow-up question.
It is a connection to this. So is it product offerings that we have are more of solution based? Or is there more modular physical products that we'll be doing? Or is it [ interim ] solutions?
So it's a mix that. It's a mix there. In the sense there are equipment that have made [indiscernible] and columns and reactors, et cetera. And then they go and sit on a [indiscernible] module. And then the module gets built around it. So it's both.
The next question is from the line of Aditya Mongia from Kotak Securities.
Congratulations on a heavy set of results. I had 2 questions from my side. The first 1 being this comment that was made by the management that the overseas orders fetch higher margins versus domestic orders. Could you give us some more color as to why would that be happening? Is it a function of competitive intensity, value creation, some more color would be useful. And what would be the forward trajectory in the [indiscernible] of these 2 margin would be useful to know?
So in the export orders, generally, we -- and let's take engineering, technology and the supply equipment, and we don't take -- undertake the construction activity, which is generally forming a part of ETCA activity, which generally happens in a domestic order. And that segment don't carry a great margin as compared to these other segments. That's the major reason because the component of our export orders is only related to technology and equipment. That's the major difference for having the difference in the margin. .
From a margin point of view, as your question is talking about or asking from the future point of view, our endeavor is to shift to more international order as compared to domestic order in a larger pie, which is definitely from the overall margin perspective, it is going to be margin accretive.
Understood. And the second question was also on margins on the -- I was trying to get a sense, and I know your business test, but there has been volatility on account of input price pressures in the past, potentially reflective of the [ EBP ] nature. Is there something that we as a company can do to kind of moderate in this [ town? ] Or will this be a continuing element of our margins and cost structure?
The nature of our contracts is mainly on the fixed price contract. So there is no mechanism of passing on any negative or a positive impact of input costs to our customers. So naturally, this element technically will continue. We have seen a very different phase 2 years back and continued almost for 1.5, 2 years of higher input cost, and we have seen our margin getting affected to the extent of almost 2%, 2.5% during those years. But now the reversal has happened. Material prices are more or less looks like to be in the range.
The future projections from all the experts are also giving that kind of an indication. So we don't see any kind of impact coming up because of the input costs going forward.
The next question is from the line of [ Siddanth ] an Individual Investor.
My question is on the line of SAF. Is there any visibility on the -- on our MOU with [indiscernible]? And do we see anything in the future in FY '25 or FY '26?
Could you please speak a little slow, the line is not very clear. We could only get that you are asking something on SAF, but later on, we couldn't get what you're asking, sir.
No, I'm asking on -- yes, is there any visibility for FY '25 or FY '26 from the SAF area?
As I mentioned in my opening remarks, we have -- we are now been awarded a contract for full scale engineering and modulation of a SAF project in the United States. That's going to be a full large-scale commercial ATK project. And being the size of the project, we could -- the engineering time itself could be over 6 to 8 months. So that is what we have undertaken this now.
Once the engineering -- once we are closer to the engineering model completion, we'll get a full view of what is the likely cost of the project. We have done the preliminary study and looks like very positive. But as we go through this process and maybe another 6 months' time, we'll get a better visibility. And there are several projects cross SAF that have been topped out right now. And we are looking at addressing the need that are emerging out of those projects. We are in dialogue with at least half a dozen SAF projects now across the world to offer our services to them.
Okay. Anything on domestic front, I mean anything on the domestic front? No?
On the domestic front as well, I think we have two -- there are 2 dimensions to it. One is that there is -- we know for sure that from January '27, the [indiscernible] agreement will kick in, under which 1% lending will be mandatory for all investors live. So there's a clear demand. So solidly -- and given the 18-month -- 18 to 20, 24 months kind of time cycle required for the project -- for the SAF project to come alive. You probably see activity, we are already in dialogue, but we will probably see major traction build up towards end of this calendar year.
The next question is from the line of Ankita Shah from Elara Capital.
Congratulations on good performance. Given that sir, you mentioned that you had got good inquiries in the engineering side and also on the export side. So should we see continuity in the margins that we are seeing right now or in the similar range?
So Ankita, yes, the export, we have stated as part of our strategy that we would like to improve the share of pie for our international business. And that is what we are witnessing. We have been working at it for some time, but we are not going to see results. And current pipeline also makes me believe that we are -- we have no reason to believe that will be anything other than that. So from that perspective, yes. And as Sachin already explaining, the international business for us happens to be higher margin [indiscernible] compared to domestic business. So all those indicators are yes. The exact numbers, time will tell how they will exactly play out, there are multiple interplays, but directionally speaking, yes.
Okay. Okay. And on the PVC side, I think the question was already asked, but I wanted to understand if there was more orders that were there in the pipeline, which was supposed to come in, so when is that expected?
Yes. So as I mentioned to you earlier, that there is a clear mandate now to blend CBG into the CDG networks. So that was -- that's a very, very, very welcome step, which takes care of a very, what I would call, as a major issue of where do I sell my gas? Your pipeline network becomes that much easy. Having said that, there's still -- as CBG business there, several elements on the ecosystem side are continuously being resolved. And as they get resolved, we move forward. So as I was saying, it's not a very regular smooth growing business like ethanol. It's not at that stage because the ecosystem is still under development. It tends to be a little lumpy here and there, but overall, moving in the right direction. So as we go through the year, maybe in the second half of the year, we start seeing activity build up on the CBG space.
Got it. Sir, lastly, if I can take on the exceptional items of this land sale. What is this? And are there any more that is planned in the near term? That's it from me.
We are not speaking on a land bank because the land, which was available with us, and which we believe that we would not be able to utilize it. Earlier it was planned that we did take a land -- again, we will build up a factory over there. But as we have moved to Mangalore, and we realize that this land will not get utilized for any factory kind of a thing. That's the reason why we have sold it, which is the only piece of land, which we had as an excess land you can call it. I'm not expecting any more exceptional item like this going forward.
The next question is from the line of Sai Siddhartha from Kotak Securities.
I just wanted to understand what's the low carbon, ethanol opportunities that is available for us in U.S.?
Sorry, sorry, your voice is very weak, we are not able to hear you.
Can you hear me well now?
Yes. Yes. Now it is okay.
Yes. I was just asking the opportunity that is available for us in low carbon ethanol in U.S?
Okay. So here the broad numbers on the U.S. So the low carbon ethanol stands strong. The demand of SAF, so by 2030, United States government has given a plan under the Inflation Reduction Act for 3 billion gallons of SAF to be produced in the country. The first 1.6 billion SAF will come out of a process called HEPA that doesn't involve ethanol. But after that, because there is no more feedstock left for HEPA, the expectation is that [indiscernible] to get our ATJ pathway will become the de facto pathway, which means a further 1 billion odd capacity or between now and 2030 will have to be built using ATJ pathway. I was mentioning about the last leading order that we're executing it is for the same pathway.
So -- and all of these -- so if it's 1 billion gallons of SAF, it will need 2 billion gallons of ethanol. That's the equation. So 2 billion gallons of ethanol will have to be become low carbon ethanol in the United States existing plants. And now that's a fairly big opportunity because on an average, we can take 100 million gallons capacity of one plant.
So at least 20%, if not more, we'll have to convert over the next 4 to -- 4 years or so to low carbon ethanol. And each of them, depending on what they are currently and where they can present opportunity to us, ranging from $10 million to $30 million per plant. So, we have to see how that goes.
The next question is from the line of Dhaval Shah from [indiscernible].
I could remember, we had mentioned that we had taken a CBG order from a large conglomerate. I couldn't see their name in presentation this time around. And I remember they had given us an order on a turnkey basis, which was new thing for us. And since now, I assume that we have executed that order. And that conglomerate has plans of establishing 50-odd plants in the coming 2 years. So how was our experience in executing those orders? And how are we positioned to going ahead and capturing that opportunity?
Great question, Dhaval. So yes, the good news is that we have executed the -- we have executed now two contracts for them, one in there headquarters, manufacturing headquarters, not in headquarters, headquarters, and the other one -- in fact, on 1st of August, the large inauguration that has been planned for the plant by the management of our customers. So -- and we are very -- and this is from whatever we know. They have indicated to us that they are extremely happy with the execution and the performance of the plant so far. And we do hope that as we move forward, the performance will move -- will help us to actually win even more contracts.
We're building a few more for them, but they are still away from committing that probably about sometime beginning of next calendar year. So that is under execution right now. But what we have built for them and it has already started to produce gas, it's worked very well, and will work well for us. We only received positive news. And I do hope that this will translate to more business as we go forward.
And one more question about PLA. Since we have now got some breakthrough on PLA, what would be the addressable market going down the line, say, in 5 years?
I think, Dhaval Bhai that we are the first company to have indigenously developed technology that uses local feedstocks and can convert this -- the critical step is to convert that to lactic acid 90%. That is the full name, Lactic Acid 90%. And we have now achieved that. But for the first step, we still need to do this on a consistent basis. We still need to focus to our customers. So already, several dialogues with customers are beginning to open. And as we move forward, we will see how that develops. It's probably a little early for me to say any numbers around what business will happen. We are very bullish that, overall, the world needs to move to biomanufacturing because that's the most sustainable way of living. We said this for 40 years for ethanol and only last 5 has seen them convert. So we'll have to see how that works. It was slow conversion, but CBG didn't take that long. It probably took more faster off, so we expect that as we move forward and we develop a little better understanding of sustainability. These things will come into world.
Great. Since we have so many opportunities coming up in so many segments. I just wish and hope in next 2, 3 years, all of them converge together, and we are executing all of them in a great way, and I wish you all the best for the future endeavors.
Thank you. Thank you, so much. In fact, that exact dialogue I had with my Chairman 2 days ago, and we are saying how we're going to be prepare if such a thing happens. And we said, yes, we are cognizant of what we need to do, and thank you very much for your good wishes.
The next question is from the line of [indiscernible].
Sir, my question is what is your future outlook for various segments? Or what are the projected percentage contribution for each segment?
Sorry, the question what is our understanding of future of EV?
Outlook for the [indiscernible]. Yes, sir.
Okay. So we are not a vehicle manufacturer, so we don't know. But from what you are there, we see that -- I think what we have to understand is that every technology will have a role or a place in the overall car park, if I can use that word, that's the terminology, which automotive companies use. So in the overall car park, which includes 2-wheeler, 4-wheeler everything, there will be a definitive place for different technologies to emerge. What we have to understand is that as a country, what works for me and what works for me better? You think like this, if it is an ICE engine, which is the current engine in the cars that we use, that uses biofuel as an input energy source.
Much larger part of my country gets involved, my farmers are happy, my industry is happy. I create employment for the youth. My supply chains remain understocked on the automotive side because it's still making the similar cars and vehicles. On the retail side of network, again, we can use the same one that is used for liquid fuels, again, for liquid [indiscernible] and we use as well right now because they're blended. So there are -- it's says foreign currency for me, it keep nations [indiscernible]. It ensures that we will have lower carbon emissions. So everything is on the positive side, right? There's a full value circle. It's a closed, what I would call a circular economy and that has the country.
On EV, not all of these benefits accrue, there are some other benefits that one can get. So we'll have to decide what work for us in the country. God has given us sun, God has given us agricultural land and a very hard working farming community. That's what we have. We don't have those fancy minerals that are required to make that. So unless that technology changes, we love to see differently. I personally believe both will have place in the sun. For India, ICE is a better option.
The next question is from the line of Rahil Shah from Crown Capital.
Sir, why there has been a reduction in order intake? You have given a graph on page 10, so quarter-on-quarter basis, like specifically for this quarter, what went wrong? And any outlook ahead, how is the pipeline looking?
So first of all, let me submit from a number perspective, it is not looking -- it did not look good and it should have looked. On the other hand, we don't think anything went wrong. In the sense that we have not lost any market share, the market potential is still there, all the strategy that we have played out are playing. But of course, there were 3 major -- 4 major factors that actually impacted, and that's where I want to draw attention.
First and foremost, first quarter with central elections in our business, which is agri industry, policy-driven, too many factors that played for a central election quarter to actually prefer 2 months were lost in a manner of speaking, that's number one. Number two, prior to the election, there was a, what I would call as a reprioritization of the feedstock for the industry, as I said in my opening remarks as well, which led to a situation that people were not able to decide on setting up new projects because the old was given for a temporary period, but it is still not removed. So they are waiting for it to be removed. All the bankers will not give money for the project if there is uncertainity on the feedstocks.
Prior to that, there was on the [indiscernible] feedstocks as well in the domestic market. So a lot of our buildup was around domestic business that was happening. However, we had also recognized that maybe we need to prepare ourselves better. And that is what we have been doing. And that is how we see our order book significantly change in this direction; a, the export component going up; b, the engineering and pH section. So we are now at about 52:48 ratio. If you've seen our past numbers, they'll be more like 80:20 put together, but now it's more like 52:48. And also our export business is almost 42% of our order book.
So some of the steps that we have taken, not that we've taken them in a rush, but then in a very sort of thought-through session and they will help us to bridge the gap. There is some time lag between the two. But as I was answering earlier as well, as far as the year-end is concerned, we stay very positive that we will do better than the year went by as far the order booking numbers are concerned. It's just a little bit of timing difference plus these factors that I told you. I think as you move through the year, you'll start to see the improvement.
Okay. And secondly, just any revenue broadcast guidance. That's all from me.
Sorry to disappoint you. We don't give revenue number guidance. When you talk revenue guidance, my CFO forgets his mathematics. He otherwise is a brilliant guy, but he forgets.
But directionally, we can expect much better results than last year?
Yes [indiscernible].
The next question is from the line of Faisal Zubair Hawa from H.G Hawa and Company.
This is like a previous participant also pointed out and you also talked with your Chairman. This is a problem of plenty, and we are rightly placed in so many segments. And it's all the result of the brilliant R&D that we have done 2 decades ago. So my -- I want to see some kind of change taking place in the overall senior management or where you actually recognize that you can actually double or triple revenue every few years without even deploying much capital. And where is that change coming from? Or will it -- how will that change of mind take place where you so far, like you have been batting at a steady state and now you have the opportunity because of the foundation to really build up strong on that. We would like -- to me, it's looking like the last 20 overs of a 1-day match then you have just lost 2 or 3 wickets.
Well, I think you've done a great analysis, let me compliment you on that. I think we're bang on target when you say that the R&D work that we've been -- we have done over a period of time is actually come to good stead for us now. And it is actually prepared a platform for us to actually launch and address this material activity. That's exactly the way we see it, that we are beginning to see opening out of difference. So we are no longer dependent on a single molecule in a single market. We are now multiple markets, multiple molecules, multiple positions, multiple capabilities that we can get paid for.
So very different, what I would call as the canvas for the company. That's exactly the way we are thinking. In fact, I think somebody has asked me right at the beginning of this call that would you actually achieve the guidance that you gave of 3x growth by 2030? And I said, yes, we are on track. There is no reason for us to be otherwise. But as we all learned, we should stay true to the strategy that we have sort of defined for ourselves, make sure that we continuously align ourselves should there be changes in the external environment and keep working hard and keep going at it. And I have no reason to believe that if we do all of that stuff and things remain normal, we have all learned in 2022, what happened. So subject to that kind of a thing not happening, yes, we are on track.
The next question is from the line of Sagar Dhawan from Valuequest.
Sir, my question is on the execution time line of the current order book. So could you just tell us what is the execution time line for the engineering part of the order book and is it different from the kind of Bio-Energy execution time line?
See, engineering orders right now, we are having a mix of orders because they are not typical orders. Some are for the longish period, especially the one, which we have received for engineering of SAF thing. So the engineering order itself will get executed over a period of at least from 8 months to 15 months kind of a period. Because the scope is pretty, pretty large for those engineering orders. All other orders, which are non-engineering, they will get executed over a period of 12 to 15 months.
Understood, sir. Okay. And the second part -- second question was on the capital allocation plan. What is the CapEx plan going ahead for this year as well as FY '26? And in the light of the opportunities which are [indiscernible] for example, IOCL JV or renewable chemicals in the longer term, what are the broader CapEx plan from the near to medium term point of view?
So currently, our capital will get a little bit on the two sides from the fixed assets or the capital expenditure point of view, one on the GenX -- I mean the entire CapEx is not yet done. Some CapEx will happen during this year also. There is something which will be happening on the PLA side and the pilot plants which we are thinking at in the R&D. So there is another one. Third one, which we are not yet fully, fully finalized, but there will be some allocation which will be happening for the IOCL JV, as you rightly mentioned, depending on how many projects are going to kick start in this year.
Next year, naturally, it will be little bit on a higher side because if it is CBG plus SAF plant, which we are thinking of and which is on the [indiscernible] in any case, then the capital allocation will be a little on a higher side. To find this, we are looking at different avenues and not necessarily that it has to be completely and entirely funded from our side. So we are looking at different avenues to fund that. So one, on the capital expenditure side or allocation side, and on the funding of that capital allocation, the way which we are looking at. I have two things which are going on parallelly right now.
Understood, sir. Any CapEx number for FY '25?
It should be in a range of around INR 75 crores to INR 100 crores.
The next question is from the line of Shyam Maheshwari from AB Capital.
Wanted to understand how are our payment terms on export orders? Are these largely FOB or CIF? And how should the working capital move with more export orders in our order book?
It's actually a combination. I will not say that everything is FOB or everything is CIF. It's a combination of both, depending on how the customer is looking at. I mean if they are having their own arrangement of lifting the goods, then those are basically on FOB basis. If they don't have, then they generally ask for CIF from our side. Your second question was related to working capital?
Yes.
So working capital, we don't see any, what I can say, pressure on working capital per se, even if we see in the future, the revenue to grow. The working capital will remain in more or less similar kind of number of days, what we have seen in the last year.
Understood. And sir, secondly, I wanted to understand a little bit more on the low carbon ethanol opportunity. I believe there were some great framework that was released earlier in the year, which kind of enabled a different way to look at how carbon intensity had to be calculated. So are you seeing more traction in the low-carbon ethanol opportunity in the U.S. because of the change in framework? Are there still status quo because of the 45Z notification? Is there anything that is moved there?
So 45Z gives an additional incentive for people. There is some clarification that is required to come, where as every ethanol producer who does this LCE conversion gets it or only those that get used for [indiscernible] that many of these dimensions are being one of them that sort of get there. So first -- the two things, one the SAF quantity will drive LCE demand, that's a given, there is no question. And we are saying that, as I've mentioned back in time, if I remember on that correctly what I have said earlier, roughly 20-odd plants will have to convert between now and next 4 years to LCE projects. Each of them between $10 million, $20 million, depending on what they're currently we are at kind of opportunity. So it does present a very definitive segment of market for us to address. We have the technology and the solutions to do that, and that's what we're looking at right now.
Interesting. And is it possible to do it -- do low carbon ethanol without carbon capture? Because I think that is how we are targeting that.
That's exactly what our offering is that if you cannot do CCS, we will still be able to get you down by nearly 30 points on the CSK.
Okay. And that is established? I mean, we have a proven technology there?
Yes, that is proved, yes.
The next question is from the line of [indiscernible] from PL Capital.
My question is on CBG. So, in your opening remarks, you spoke about setting up a pilot plant in U.S. So I just want to get a sense of what the opportunity is for CBG in international markets? And if you could maybe quantify the pipeline to give some more color on the international opportunities in CBG?
So what -- I mean I'll just connect you to the answer that I already gave. So the low carbon intensity of the molecule is becoming a big driver. So far -- right now, everything was around the volumes and the cost, but I think the new dimension that is coming in to this biomolecule is the carbon intensity of the molecule. And therefore, when people are now setting up projects, especially in that part of the world, when they've been grain-based ethanol, which is the large application there, they are saying, how do I go about reducing the grain-based ethanol carbon intensity.
There are different levers that you push, intercropping is one of them using [indiscernible] and another one modern farming practice is another one, the whole supply chain and the delivery chain. And in between the process plant itself, they are saying, what can I do to actually reduce the carbon intensity. And for that purpose, using a waste stream for generation of gas is a very, very what I call is very high potential and high-value carbon intensity reduction technique. It has its own issues that need to be addressed, but this is very much doable, and that is the one that I alluded to. So right now, we are putting a pilot plant to understand after we have generated the gas how do we manage the affluent that is left off. That is what the whole experiment is about. And we are working with the U.S. company to make it compatible with the local fertilizer laws there. And if we can achieve that, and we have no reason to believe otherwise, but if we can achieve that as and when we achieve that, that will open up this whole settlement for this application.
Okay. I understand. So would this classify from a segmental classification, does this come under your ETCA offerings? Or would it be a part of your Bio-Energy offering just to get a [indiscernible]?
It is Bio-Energy.
It is a Bio-Energy offering. And similarly, for the SAF opportunity where you've got an order right now for the complete modularization of a SAF project for ATJ, which is you mentioned as part of the overall opportunity of low-carbon ethanol in SAF. So again, just to understand, are we considering this whole low-carbon opportunity is to drive your Engineering business? Or will it be with your 1G international? And could you give some clarification on that?
That depends on what we're offering, right? What is my offering? If my offering is only about engineering and modularizing then it's part of the EPCA platform. If it is about producing low carbon ethanol and then converting that, then there is a technology element to that, then it's part of the Bio-Energy business.
Okay. So it's flexible from that sense, this overall 20 parts we converted it could fall under either category depending on your offering, from that perspective. Is that the right understanding?
Yes, that's right. That's right. So depending on the component, if there is a technology agreement, then naturally it comes under the Bio-Energy segment. If there is no technology element, and if it is the modularization solution, irrestrictive of the application within ETCA, it will come under ETCA segmets.
Okay. Okay. That's much clearer now. And lastly, on CBG, just to get a sense of at least at the domestic market. Out of -- we've heard reports of 750 CBG plants to be set up at INR 37,500 crores opportunity size. So is that the opportunity -- addressable opportunity specifically for Praj or what is Praj's share in that overall pie of 750 plants, INR 37,500 crores?
So CBG space, yes, I mean, the operative is even bigger than that. So that's not a limiting factor, as I was mentioning earlier as well, the development of the ecosystem around that takes the offtake side -- there are multiple offtake points in this one. There's a liquid fertilizer, soil fertilizer, there is gas itself. I have been on the supply chain side [indiscernible] feedstock. So the ecosystem elements are gradually coming into place also the -- what I would call as the user points. So there are more and more, I think, as you probably have seen the ads that I've seen about CNG vehicles being pushed by major manufacturers because that is another one.
So I think some of these elements have their own speed at which they start to sort of become part of an overall system. That's what we are seeing right now. And if the -- as the whole thing plays out on the CBG side, I think we will be able to see the full CBG play even at a much larger scale because [indiscernible] much larger outlay for the program. So we are not right now limited by x number or y. I think much more -- the question is much more broader right now.
The next follow-up question is from the line of Shailesh Kanani from Centrum Broking.
So my other questions are answered. Only one question. Sir we have mentioned about an order for production of low carbon ethanol using lactose separated from milk from a U.S.-based customer. Can you throw some light in terms of size or opportunity out there?
It's an interesting one because this is actually, Shailesh, this qualifies as a low-carbon ethanol, very low carbon intensity score. So this is low carbon ethanol, which is a very potent source low carbon ethanol. So in fact, maybe next quarter, we'll talk about it. We are speaking to this customer with whom we are setting in the first project in Michigan.
On the storage side, you know that Amul launched the milk in the United States. And the same dairy will also be the production point for them in United States for their brands. So that's just a small story on the side. But give me some time, this looks like to be promising, especially large dairy concentrated areas. It's a niche application, but a very interesting one.
Just to clarify, is this the first of its kind this we are doing? Or -- because I have not read it earlier in our reports or any where?
Yes, that is correct. Yes, Shailesh, that is right. This is for the first time it's happening.
The next follow-up question is from the line of Prathamesh Sawant from [indiscernible] Asset Capital Markets.
Just two questions. So one is, when we looked at the domestic [indiscernible] ethanol plant, so typically, we had 30% to 35% of that as our engineering component of the plant. So when we have looking at this U.S. plants, where they have been converted in to low carbon and you said you have $10 million to $20 million opportunity across 20 plants. So what is -- is this entirely our target opportunity? Or do we consider 30%, 40% of this opportunity again?
No, this is our target.
Okay. So directly, so we can expect $300 million kind of revenue over a span of next 2 to 3 years from this?
[Foreign Language]
If we get all of this, yes.
Assuming like if we have $15 million across 20 plants, that's how I can. Yes. And sir, secondly, sir, what percentage of the domestic ethanol capacity do we -- capacity is yet to be built of that INR 1,000 crores that was supposed to be built for the 20% blending, what percentage of the [indiscernible]?
So if I look at my inquiry pipeline, it's equally healthy. So we don't see any letup in the development of the inquiry pipeline for the domestic ethanol market. So if that's an indicator, then there is still a lot to be done. And I'll tell you why because there are some imbalances that sort of crept in, one, because of the feedstock situation, this is permitted and that is not permitted [indiscernible]. This did not happen. Go in to this particular zone and not in that zone. So I think there are multitudes of factors that are at the place. So we still believe that we are not run out of the EBP20 program. Of course, one fine day we will reach that capacity. We are committing, as Sachin mentioned to you that last quarter, there was a lot of construction activity that underwent [indiscernible] come into play.
We still have 2 major feedstock on 3. So we need to see [indiscernible]. Difficult to answer it just now, but that's where we are. So we do see, yes, it is not at this [indiscernible] level of capacity creation, but it is still there [indiscernible].
So a ballpark figure of 200 crores to 300 crores liters are left, can you keep that way, because the 500 crores liters, 4 quarters back?
Yes. Yes.
The next follow-up question is from the line of Faisal Zubair Hawa from H.G Hawa and Company.
Sir, did you say that the engineering contracts which are already with us will take around 3 years to complete?
No. As of now, [indiscernible] engineering orders with engineering and supplier modularization, they can be a little longish depending on the size of an order. But if it is only engineering, if it is only a survey, then I was mentioning that it can range between 8 months and go up to 12 months and so depending on the size of engineering order.
Any plans of getting a very good international guy to head our sales function and who continues to travel across the board in U.S., Europe and kind of a lot of exhibitions and a lot of lobbying with even governments to really get this going, because now some size emerging for us, we can probably afford that and make the company go to large banks, like how Hitachi has done or how large U.S. MMCs have also emerged?
So Faisal, thank you, we are not at Hitachi level yet, but we are definitely participating in forums where we need to be heard, where we can present our solutions, where we can build. We are part of what I call platforms where they bring industry players together and then create a consensus view. So those we are taking definitely taking participation in. I mentioned about GBA that's going to be a major platform and we are playing our role as actively as we can. There are other platforms also where we are very [indiscernible] multiple platforms to which we participate in both in United States and Europe and now Brazil as well.
And we -- in our current understanding that is sufficient given our size and scope and what we can manage. And wherever required, we'll take the help of external agencies as well.
And that's right what Shishir said, our current leadership pipeline is good enough to take care of whatever is happening in the market, especially the international market, which you are referring, we have very dedicated people who are concentrating on the different segments of businesses to understand what is going on there. A couple of guys are actually positioned there and the people, the Senior Leadership team from India office very often travels to these markets and definitely does the required business development cost for this business.
And we are building a team, which is local in nature, okay? So we look [indiscernible] and all the people on the ground now that we are building are local people. [indiscernible], natives of that place Obviously, they are much, what are they much closer to the culture and the reality compared to a sitting here 9,000 of mines away. So we are taking what our concrete steps to ensure that we are not [indiscernible] on this dimension.
Sir, I know for the fact that the promoter is not very active with day-to-day activities of the company. But even at his end is there any kind of succession plan for his holdings and how things will pan out?
I think that's a question you need to put to him, not to us. However, let me tell you. So Dr. Chaudhari is very much involved in strategic direction of the company, what we do on the technology front, how we are developing technology, how we are prioritizing ourselves. And that's the whole idea that over a period of time, [indiscernible] he is trying to ensure that the Praj's management become professionals that's how many of us are having our jobs here. So we are doing what we can. He is doing what we can. I think together, it's a good [indiscernible]. Of course, the board construction, you'll see there are multitude of elements that sort of get played out on the side, the board constitution, his own thinking, his involvement, professional management planning. So there are multiple elements, and we have no reason to believe that there is any gap right now in terms of what we require at least over the next 5 years.
And I must tell you that this Praj remains, always the best con-call addressed by management with in-depth answers and we are able to always have better understanding of the company after the con-call. I cannot appreciate enough.
[indiscernible]
Ladies and gentlemen, we'll take this as the last question. And I hand the conference over to the management from Praj Industries Limited for closing comments.
So thank you, everyone, for your time today. In case you have questions, please write to us at info@praj.net. Once again, thanks a lot for your time today, and have a great day.
Thank you. On behalf of Praj Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.