On Friday, the stock was up on news that the Cabinet Committee of Economic Affairs (CCEA) has made it mandatory for oil marketing companies (OMCs) to blend 5% ethanol with petrol. CCEA has also approved market-based pricing of the biofuel, opening the market for ethanol producers – which is mostly sugar companies. The Ethanol Blending Programme (EBP) will require 105 crore litres of ethanol annually and will help OMCs to save cost by way of difference in the prices of ethanol and petrol. Praj is a big name in India Inc when it comes to ethanol blending and it is now building a commercial scale demonstration plant to produce ethanol—also called cellulosic ethanol—from biomass, which could be any form of agricultural waste, such as wheat and paddy waste, or wood chips. The capacity will be around 100 million litres of ethanol per year and 2013 will be a defining year for the company. Financially, for Q2FY13 its revenue was at Rs.188 crore and of this, 58% was domestic and 42% from international contracts. 

Ethanol plant business accounted for about 82% and non"ethanol 18%. Net profit at Rs.16 crore was down 20% (YoY) but sequentially, was up 33%. The company has acquired controlling stake in water treatment company, Neela Systems. It holds 60%and this came at a total cost of Rs.76.49 crore. The integration process is still ongoing as sales performance of this unit was down in first half and t hopes to absorb overheads when sales buildup. Cash on the book is Rs.239 crore. At end of Q2FY13, promoters stake was at 31.19%, Rakesh Jhunjhunwala holds 8.45% and Vinod Khosla holds 1.61%.