We attended the conference call hosted by Jiya Eco Products Ltd (JEPL), on 10th August, to discuss their Q1FY19 results.
JEPL is the only listed Indian manufacturer of bio fuels i.e., briquettes and pellets, from agri waste. With a manufacturing capacity of ~80k tpa of briquettes and pellets each, the current plant at Bhavnagar (Gujarat) supplies bio-fuel to industrial users in several cities in Gujarat.
While you may want to refer to the attached note for more details, hereunder is the gist of the call:
- Their products are green substitutes for users of Coal, LPG, Diesel, LDO etc, offering significant cost benefits
- Currently cater to largely industrial users based in Gujarat i.e. textiles, pharma, food, dairy etc
- Internal R&D helps increase rated capacity, at the present location, by ~25% at minimal costs
- The management sees current facility reaching peak utilisation, mid FY19, and hence have scheduled capex at a new location in Gujarat, @ Gandhidham. This facility would increase their present rated capacity by more than 2X
- All future capex intended to only increase pellet capacity. Higher margins and (relatively) lower receivable cycles in this segment responsible for this decision.
- The management intends adopting the B2C model incrementally, by catering to large retail users of fuel like Bakeries, Fursan, Namkeen, Bhujiya manufacturers etc. This is to diversify their client concentration risk, widen the user industry and bring receivable days even lower incrementally
Read the attached note for more details: