Praj Industries Limited Q3 FY26 Earnings Call Summary

Summary

Praj Industries Limited - Q3 FY26 Earnings Call Summary Friday, February 13, 2026 4:00 PM IST

Event Participants

Executives 2 Ashish Gaikwad (Managing Director), Sachin Raole (CFO & Director of Resources)

Analysts 6 Aditya Mongia, Amit Agicha, Amit Anwani, Binesh Jain, Sani Vishe, Shailesh Kanani

Financials & KPIs

Geographic & Segment Commentary

• Bio-Energy: This segment faced a slowdown in domestic Greenfield projects due to a supply-demand imbalance and funding challenges for customers. Management is shifting focus toward Brownfield efficiency improvements, Distillers Corn Oil (DCO) additions, and international markets like Latin America where blending mandates are increasing.
• Engineering & GenX: Segment saw a breakthrough with a CCUS skid order from a global oil major under a framework agreement. The GenX facility at Mangalore is pivotally shifting from climate action (ETCA) to traditional energy and data center components to improve capacity utilization.
• PHS & Brewery: Secured a significant precision fermentation order under the National BioE3 Policy and a ₹100 crore+ Greenfield brewery contract. The ZLD (Zero Liquid Discharge) business also bagged a major municipal/industrial order exceeding ₹100 crores from a metal major.

Company-Specific & Strategic Commentary

• Energy Transition & CCUS: Praj secured its first breakthrough order for Carbon Capture, Utilization, and Storage (CCUS) skids. Management has established 4 framework agreements and 12 plant audits to drive future volumes in this segment.
• Sustainable Aviation Fuel (SAF): The company is completing detailed engineering for a US-based ethanol-to-jet SAF plant by end-FY26. Technology readiness was showcased with an integrated demo plant at the Matrix R&D center.
• Bio-Isobutanol (Bio-IBA): Successful technology development of Bio-IBA for diesel blending was announced. Management believes the technology is ready for commercial scale-up once the domestic policy framework is finalized.
• Labor Code Impact: A one-time exceptional charge of ₹334.4 crores was recognized following the new national labor code, impacting gratuity and leave liabilities.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

GenX & Mangalore Utilization

• Question: How is the pipeline for GenX looking after the initial slowdown? (Amit Anwani)
• Answer: We have reached 12 audits and 4 framework agreements. The first US order for CCUS skids has been received. We target ₹500 crores in order bookings for FY27 to hit the breakeven mark (Sachin Raole).

Strategic Focus & SAF

• Question: Why are competitors winning large bio-plastic and SAF projects over Praj? (Sandip Sabharwal)
• Answer: Every project has a commercial angle; we only bid where it makes sense for shareholders. We are technology-ready for SAF and bio-plastics and expect more opportunities as the market expands (Ashish Gaikwad/Sachin Raole).

Bio-IBA vs. Biodiesel

• Question: How does your work in Isobutanol differ from current biodiesel deliveries? (Binesh Jain)
• Answer: Biodiesel is made from oils; Bio-IBA is a molecule that can be blended directly into conventional diesel, similar to how ethanol is blended into petrol. It is a totally different pathway for decarbonizing the diesel segment (Ashish Gaikwad).

Margins & Export Mix

• Question: Why have margins taken a hit despite a stable backlog? (Aditya Mongia)
• Answer: The mix in Q3 favored African markets involving heavy construction work, which carries lower margins than pure equipment supply. Additionally, the Mangalore facility’s fixed costs are not yet fully absorbed (Sachin Raole).

Key Takeaway

Praj Industries reported a steady revenue performance of ₹841 crores in Q3 FY26, despite a challenging environment where domestic Greenfield ethanol projects have significantly slowed. The quarter’s profitability was severely impacted by a one-time exceptional charge of ₹334.4 crores due to revised labor codes, resulting in a net loss. Strategically, the company is successfully diversifying away from pure ethanol into High Purity Water, CCUS, and SAF (Sustainable Aviation Fuel), evidenced by a ₹914 crore order intake—a 12.4% sequential growth. Key breakthroughs include the first CCUS skid order for GenX and first-of-its-kind precision fermentation orders. While 1G ethanol remains subdued, management is pivoting toward Brownfield efficiency and international markets, targeting GenX breakeven in FY27. Investors should monitor the conversion of framework agreements into orders and the finalization of domestic SAF and Bio-IBA blending policies to drive long-term growth toward the vision of becoming a ₹10,000 crore company.