Praj Industries Ltd Q4 FY22 Earnings Conference Call Insights

Key highlights from Praj Industries Ltd (PRAJIND) Q4 FY22 Earnings Concall

Q&A Highlights:

• Gaurav Chopra from Union AMC asked if the company would be at double-digit EBITDA margins in FY23. Shishir Joshipura MD said that commodity prices have started showing little bit a downward trend, PRAJIND expects the pressure to start coming down and will see a reflection of that from 2Q23 onwards.

• Lokesh Maru of Nippon India AMC asked about the market share the company is maintaining. Shishir Joshipura MD said the company is maintaining its market share, as indicated in the past of around 60%. PRAJIND is not seeing any reason for any market share change to happen in the business as of now.

• Amish Kanani with JM Financial asked about the outlook on the international order book pipeline. Sachin Raole CFO said that for the whole year, PRAJIND had a 37% growth in the international business. The company is also seeing revival of economies. Brazil is beginning to open up. PRAJIND is going to commission its first plant in Brazil by end of 2022 and is positive that the company will look at even more positive times.

• Amish Kanani with JM Financial asked about domestic pipeline outlook. Sachin Raole CFO replied that it continues to be robust and is building positively from where it was. PRAJIND added that it will continue to see traction.

• Jayesh Shah from Capital PMS asked about the developments in the RCM division. Shishir Joshipura MD replied that the company has two important programs that have past the bench scale development and go to [better] scale now. It’s progressing as planned but not the commercialization stage yet.

• Prathamesh Sawant from Axis Securities asked about the impact of cap on sugar exports by govt. on PRAJIND. Shishir Joshipura MD answered that that the govt.’s decision is good for the industry, because looking at the results of any of these sugar companies as they have been announcing, for a much lower portion as a percentage of revenue, the contribution to the bottom line is disproportionately higher from ethanol to their businesses.

• Prathamesh Sawant from Axis Securities asked about any seasonality in order book. Shishir Joshipura MD answered that the seasonality has evened out which earlier was pretty sugar season based, which of course is a seasonal crop. But with starchy feedstock coming in there is no seasonality.

• Bharat Sheth with Quest Investment asked that on the CBG front, how many plants so far the company has installed. Shishir Joshipura MD replied that PRAJIND has commissioned two plants completely. They are fully running. Gas is being sold and retail outlets of respective OMCs that they’ve got tied up there. PRAJIND will be commissioning the rice straw plant in about three months.

• Bharat Sheth with Quest Investment asked about the outlook on the breweries business. Shishir Joshipura MD replied that the company is seeing the consumption beginning to pick up. Right now the capacities have all come to play and at current market response PRAJIND will start to look at planning capacity additions either in form of green or brownfield and will see the traction buildup on the brewery side.