Praj Industries Q1 FY27 earnings call

The domestic first-generation ethanol business experienced a slowdown in greenfield projects, with inquiries primarily from ethanol-deficit states. This is attributed to policy uncertainty regarding higher blending mandates. Funding-related issues and supply-demand imbalances have extended project execution cycles and impacted backlog conversion to revenues. However, the company sees increasing demand for Brownfield solutions focusing on operational efficiency and value-added co-products like Distillers Corn Oil (DCO), and strong demand for greenfield ENA plants where Praj holds a technological edge.

Praj GenX has secured a significant global supply agreement as an engineering and manufacturing partner for critical modular infrastructure for hyperscale data centers. This agreement guarantees a minimum business volume of USD 50 million over the next two and a half years, with potential upside. This marks a strategic diversification into a high-growth global engineering market, leveraging Praj's mega manufacturing capacity at Mangaluru. The company expects this segment to become a sustainable vertical, with first project deliveries anticipated in Q2, Q3, and Q4 FY27, and aims for EBITDA break-even by the end of the current fiscal year.

The Union Cabinet approved the GOBARdhan scheme, a National Circular Bioenergy Scheme, with an outlay of over ₹23,000 crores for FY 2026-2027 to FY 2035-2036. This scheme aims to scale domestic Compressed Bio-Gas (CBG) production tenfold, mobilize private investments, and build a vibrant circular bioeconomy. Praj offers end-to-end solutions for CBG plants, from digestion to gas cleaning and delivery, and is well-positioned to leverage this opportunity, especially with state governments also announcing supportive policies.

Praj received an order to set up India's first commercial-scale demo plant for Bio-Isobutanol (Bio-IBA), with construction expected to be completed by December 2026. A 2% blending mandate for Bio-IBA in diesel could create a ₹3,000 crore project opportunity. Additionally, Praj received an order for detailed engineering for an ethanol-to-Sustainable Aviation Fuel (SAF) plant from an international customer. The International Civil Aviation Organization (ICAO) has officially approved sugarcane-to-jet pathways for SAF, validating Praj's alcohol-to-jet technology.

Praj secured an order for a greenfield grain-to-ethanol plant in Brazil, a corn-to-ethanol project with a capacity of approximately 800 KLPD, which will serve as a marquee reference in the region. The company is also closely monitoring developments in the U.S.A. market, where E15 (15% ethanol blending in gasoline) has been announced. Engagement with potential customers is ongoing in Indonesia, Vietnam, Kenya, Panama, Argentina, Guatemala, Costa Rica, and Bolivia, driven by increasing biofuel mandates for energy security and cost.

For Q1 FY27, consolidated income from operations was ₹716 crores, an 11.88% increase YoY. PBT before exceptional items^📎 rose to ₹21.05 crores, up 119.07% YoY, and PAT stood at ₹11.61 crores, a 117.42% YoY increase. Bioenergy contributed 66% of total revenue, engineering 22%, and Praj HiPurity Systems 12%. Export revenues accounted for 25% of Q1 FY27. Order intake for the quarter was ₹1000 crores, with 57% from the domestic market. The order backlog as of June 30, 2026, was ₹4590 crores, with 63% domestic orders, and cash in hand was ₹616 crores.