Praj’s BIOSYRUP® to enable year-round production of ethanol to boost to the sugar sector.
Very informative write-up indeed !
Apart from 1G Ethanol , potential for 2G is very high…
Apart from 1G/ 2G Ethanol, I had seen some articles on a couple of new business initiative that Praj has taken up which looks very futuristic with great future business potential.
(1) CBG- Compressed Bio Gas which is nothing but Methane i.e natural Gas or CNG…this is made from Bio-mass discarded by House holds- industries such as kitchen waste , Agri waste , Cow dung , Bio waste …since these are plenty on the earth and considered renewable sources of energy as there is no dearth of Bio mass on this planet …it is never going to be exhausted as long as we human beings live on this earth and the bio waste disposal is a big issue all over.
(2) Bio-plastic which is Bio-degradable and recyclable which is going to replace single use plastic.
I was looking for Progress and order book position !
Few articles that appeared in the recent past- links given below
Discl: It is a new addition in my portfolio during recent dips …
Does Praj get royalty if the manufacturers adopt its technology? I mean beyond the regular EPC contracts, how does Praj generate value from the R&D that it is doing? For eg: if sugar cos are adopting its bio syrup technology, how does Praj benefit beyond the one time implementation revenue which I guess would be in the nature of EPC.
How so? Any practical experience? How will Praj continuously generate revenue and how predictable would be those revenues? It’s not like a SaaS model operating on an annual subscription per user right?
D - Tracking. Not invested yet.
To partly answer your question, they will start generating maintenance revenue at the ethanol/biogas plants that they have setup.
Thanks. Would be helpful to understand more about the revenue model. There’s little doubt abt the IP / capability in my mind. The maintenance revenue that you refer to are like fixed annual payments that Praj would derive? How does it really work?
Their main business model is praj matrix, the green chemicals & sustainable chemicals will take over conventional one in coming decades, their technology creates max yield with 0 waste with ZLD & add lot of value added product which brings down opex, also coming gas economy & ethanol will give it a huge edge with incremental revenue cash flow, as biotechnology takes over their revenue will enlarge with time, but this model will take time, can’t expect a hockey stick growth but great future a ahead
That didn’t answer my question around how the revenue stream would work out and how predictable those streams would be. The issue is not scope of application for their IP but more on how exactly is the IP monetised beyond the usual EPC contract revenue?
Praj industries business is usually a seasonal one as major part of its revenue is from biotechnology and sugar industry is a seasonal play.
That’s why Praj’s Q1 is weakest and Q4 is the strongest.
But this seasonality will be changing now because of two reasons:
- More focus on grain based ethanol which is not a seasonal business.Target is to procure ethanol for blending from grains and sugar equally.
- Praj’s patented technology BIOSYRUP ® makes sure that ethanol can be made from sugarcane juice round the clock.
Can you answer my above questions, please? I’m still trying to understand how does Praj monetise all its process innovations? Does it get capex orders or it gets some royalty too? If capex, what is the annuity business in the form of annual O&M from plants as a % of the plant capex?
The capex order is majorly a one time income. But the plant O & M is a recurring business.
No clue of they get any royalty income.
But I feel for their BIOSYRUP ® they will be charging a royalty for the innovation.
Will have to see more of this in their next concall.
In one of the concall or AR 1/2 years back I read about their strategy to focus on increasing consultancy/fees/AMC base revenues going forward. Though no quantitative data was discussed or projected. No recent reading on this. Ethenol is priced in. Next trigger is CBG.
Why Praj has not made any declaration to the exchange on receiving such a big order…