In an interview to CNBC-TV18, Gajanan Nabar, CEO and MD at Praj Industries spoke about the financial performance of the company in the quarter gone by and the road ahead.
Below is the verbatim transcript of the interview:
Q: How does this development benefit Praj Industries? Is it possible to quantify it?
A: This is a step in right direction. It shows government resolve towards the blending program and towards ultimate ethanol sustainability program for the country. This would mean that the over all blending percentage which is hovering around two percent would go up as per the mandate closer to five percent. They have taken out some of the hurdles in the blending program; one is on the excise duty front so they have put a mechanism in place. Also they have given a price indicative which is attractive enough for all the ethanol producers so that they could supply to the oil companies. So, it is a very well taken step towards the right direction. The reason of that is a there would be demand on supply of ethanol for the capacity would be built in for both fuel as well as it would have some slow bowling effect on the beverage grade ethanol as well.
Q: Can you just tell us where does Praj Industries come into the entire value chain?
A: We have multi seed multi product plants so the industry which is making only beverage grade ethanol we could also provide technology to convert those plants into making multi products so including biofuels and also enhance their capacities in the bottleneck. So, overall we can work with the ethanol and sugar industry so that they can enhance their production, they can also optimise their supply and play between the two products. So, that is a very important position that we can play in this.
Reema: With a higher ethanol price it is quite likely that the demand for ethanol will go up. What were the capacities of Praj Industries currently stand at and would increase in demand necessitate in increase in capacity for your company?A: We have already mentioned in our past few calls that we are about 30 percent headroom to increase our supply of plant and machinery and overall capability of supply in technology as well. So we are good for the time being we will take a call as we see this demand really unfolding in the market. Ekta: Can you tell us what your order books stands at this point in time and what has the change been possible on a sequential basis? How much of a change do you expect in your order book on account of this?A: We need to wait for another one or two quarters before we see some momentum gaining on there. Last quarter we announced order book of Rs 730 crore and we are seeing some traction in order inflow but next one or two quarter would really be giving us further direction on that.Ekta: So when you say some traction in your order inflow where is this traction coming from primarily? Who are you servicing, who are you clients at this point in time?A: We are also into critical process equipments for oil and gas so we are getting some order from there. We are getting orders from our coal business which is ethanol and brewery and also from water and waste water. So, we are seeing all quarters we are getting some traction.
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