Mr. Pramod Chaudhari, Executive Chairman, Praj Industries Limited
“Our Objective is to invest in strategic acquisitions to enhance new capabilities in new business areas to diversify our revenue streams and to successfully complete buy-back of shares.”
In Sept 2009, Mr. Chaudhari was invited to attend and speak at the UN Leadership Forum on Climate Change. He attended COP15 Conference on Climate Change at Copenhagen (Dec 2009) as one of the Business Leaders.
Praj Industries is a global Indian company that offers innovative solutions to add significant value to bioethanol facilities, brewery plants, water & wastewater treatment systems as well as process engineering, plant & equipment for customers worldwide. With over 500 references across five continents, Praj is a leading Ethanol Technology & Plant supplier with a strong focus on second generation bioethanol process development. Praj Matrix - the innovation center, is the R & D Center of Praj Industries. Praj is a knowledge-based company with expertise and experience in bioprocesses and engineering. It delivers know-how, license, engineering design, plant & equipment, project management, commissioning and customer care, and turnkey projects. Led by an accomplished and caring leadership, Praj is a socially responsible corporate citizen.
Replying to Yash Ved of IIFL, Pramod Chaudhari says “Our Objective is to invest in strategic acquisitions to enhance new capabilities in new business areas to diversify our revenue streams and to successfully complete buy-back of shares.”
Comment on your Q4 / FY12 Performance?
We had two key objectives for FY12. One was to invest in strategic acquisitions to enhance new capabilities in new business areas to diversify our revenue streams and to successfully complete buy-back of shares. We have delivered on both. We acquired stake in Neela Systems, a niche player in pure water segment for pharma, life sciences, f&b, cosmetics applications. This strengthens our water play.
During the year, Praj completed buy back of 7,313,644 shares at an avg. price of Rs. 76.58 per share. These shares have been extinguished. We are pleased to have made progress on both initiatives.
We are also heartened by our financial performance as we have reported healthy growth. FY10 and FY11 were challenging years for us given the effects in the global economy. Through strategic initiatives to diversify our business model, we have now been able to bring our performance at par with the pre-2008 level. We hope to get back on growth path. Despite uncertainty, India remains the main market for us.
Among International markets, the regions of South Africa, Central America and South East Asia looks strong, while Argentina and Philippines are leading the change.
In our industry verticals Refinery, Chemicals, Pharma, and sugar beverage sector are showing strong growth.
In the domestic Ethanol business, there is more focus on beverage alcohol production plants, while in the international business greater focus is more on non-ethanol production.
We are confident that Praj, with a controlled focus, value added products and healthy balance sheet is well placed to counter these difficult times.
What is your revenue mix?
About 86% of our revenue comes from ethanol business and remaining 14% of our revenue comes from non-ethanol activities.
Comment on your Capex plans?
Our Board has approved Rs. 300 mn Capex for FY13.
Brief us about your Q4 financials?
Income from operations stood at Rs. 2.68bn (Rs. 2.02bn). This has been the highest revenue achieved.
The EBITDA (excluding other income) was at Rs. 277.7mn in Q4 FY2012 when compared to Rs. 201.8mn in Q4 FY2011. EBIDTA increased 37% over corresponding quarter in previous fiscal.
PBT was Rs. 419.7mn (Rs. 224.1mn) for the period at a margin of 14.61% recording a growth of 87%.
What is your order backlog?
The consolidated order backlog as on date is Rs. 8 bn with 52% from domestic customers and 48% from international customers. During the quarter, Praj received additional orders amounting to Rs. 2 bn.
The Company recently commissioned a large 400,000 litres per day ethanol plant in northern Peru for Maple Ethanol Company. Praj provided the technology, engineering, equipment and systems and process integration for the sugarcane juice to ethanol plant which will enable Maple to serve the domestic and international fuel ethanol market. The Plant is based on the fundamentals of lower energy cost and low water intake. The plant is designed to meet the highest EU standards.
Praj has successfully commissioned the first evaporation based wastewater treatment system for a textile CETP at Tirupur. This successfully demonstrates Praj’s capabilities of handling complex effluent treatment solutions.
Briefly update on your buyback?
Last quarter the Board approved the proposal to buyback equity shares at a maximum price of Rs. 90 per share resulting in an aggregate amount not exceeding Rs. 558.639 million. The buyback was concluded on April 24, 2012. The total number of shares bought back under the buyback was 7,313,644 which stand extinguished. Shares were bought back at an average price of Rs. 76.38 per equity share. The total amount utilized in the buyback of equity shares is Rs. 558.638 mn.
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