TruAlt Bioenergy is betting on sustainable aviation fuel (SAF) as it looks to diversify beyond ethanol and address a key challenge that emerged during FY26 — low capacity utilisation.
The company plans to invest up to ₹2,250 crore in an ethanol-to-SAF project in Andhra Pradesh. The move is part of a broader strategy to build an integrated biofuels platform spanning ethanol, compressed biogas (CBG), aviation fuel and retail fuel outlets.
Why an ethanol company is entering aviation fuel
The proposed project is not a standalone diversification.
Management has linked the SAF business directly to its existing ethanol operations.
During FY26, TruAlt said it had ethanol production capacity of around 55 crore to 60 crore litres based on a 300-330 operating day cycle.
However, utilisation remained well below capacity.
FY26 ethanol allocations
For the 2025-26 ethanol supply year, the company bid for around 72 crore litres.
Actual allocations were much lower.
Allocation details:
- Around 26 crore litres from public sector oil marketing companies.
- Around 8 crore litres from private players Reliance and Nayara.
- Planned sales of around 6 crore litres of extra neutral alcohol.
Management said monthly ethanol sales stood at about 2.2 crore litres, against production capacity of roughly 6 crore litres a month.
That implied utilisation of less than 35 percent.
How SAF could solve the utilisation problem
TruAlt said the aviation fuel project could consume about 20 crore litres of ethanol from its existing capacity.
This would provide a second demand channel and reduce reliance on allocations from oil marketing companies.
Management has said SAF could help the company operate its ethanol plants closer to full capacity.
Details of the Andhra Pradesh project
The company has signed an MoU with the Government of Andhra Pradesh to set up a 10 crore litre per annum SAF plant.
The proposed investment is up to ₹2,250 crore.
According to management, the location offers logistical advantages.
The site is:
- About 8 km from a seaport with a liquid terminal.
- Around 110 km from IOCL’s Paradip refinery.
- Around 130 km from HPCL’s Vizag refinery.
- About 60 km from the upcoming Bhogapuram International Airport.
Rail connectivity through railway rakes is also available.
Technology and customer tie-ups
TruAlt has signed a technology transfer agreement with Honeywell UOP.
Front-end engineering work is in advanced stages.
The company is also working on long-term offtake agreements with:
- Airline carriers.
- Aircraft manufacturers.
- Oil and gas companies.
Management said the final investment decision will be taken after pricing and long-term contracts are finalised.
Commercial production timeline
During Q3FY26, management indicated that commercial production could begin between July and October 2027.
SAF revenue is expected to start in FY28.
Pricing expectations
Management said policy clarity is still awaited.
Based on its assessment, the company estimates:
- SAF price: ₹180-₹200 per litre.
- EBITDA margin: 20-25 percent.
Global SAF prices are currently higher than conventional air turbine fuel, according to management.
Ethanol business becoming more flexible
TruAlt currently operates five ethanol distilleries.
All five plants were commissioned during FY26.
The company has shifted three of them from mono-feed operations to dual-feed operations.
This allows the use of both:
- Sugar-based feedstock.
- Grain-based feedstock.
Management said the shift provides greater flexibility and helps extend operating periods.
Product portfolio
TruAlt’s existing and planned businesses include:
Current products
- Ethanol.
- Compressed biogas (CBG).
- DDGS.
- Extra neutral alcohol.
- CO₂.
- Fermented organic manure.
- Liquid fermented organic manure.
- Biofuel dispensing stations.
Planned products
- Sustainable aviation fuel.
- Second-generation ethanol.
- Mevalonic acid.
- Other high-value by-products.
CBG business showing strong margins
The compressed biogas segment delivered strong profitability during FY26.
H1FY26
- Revenue rose to ₹20.71 crore, from ₹12.53 crore in H1FY25.
- EBITDA margin stood at 68.29 percent.
- PAT reached ₹10.13 crore.
Nine months ended December 2025
By Q3FY26, the CBG business reported:
- 63 percent EBITDA margin.
- 43 percent PAT margin.
Expansion through partnerships
TruAlt is scaling up CBG capacity with strategic partners.
Key partnerships:
- Sumitomo Corporation owns a 49 percent stake in TruAlt Gas.
- GAIL holds 49 percent in Leafiniti Bioenergy after infusing equity.
The company aims to raise CBG production capacity from 10 tonnes per day to 162 tonnes per day.
Retail fuel business
TruAlt has also entered fuel retailing.
The company has obtained oil marketing company status and has commissioned seven outlets under a franchise model.
No capital expenditure has been made on these outlets, according to management.
Retail business snapshot:
- Seven outlets operational.
- Four more under commissioning.
- Revenue exceeds ₹100 crore.
- EBITDA margin of around 5 percent.
- Seventy-six additional locations shortlisted.
Expansion is being paced carefully because of crude oil price volatility.
Why the SAF bet matters
The ₹2,250 crore project is aimed at creating another growth engine rather than relying solely on ethanol blending demand.
If executed successfully, management expects four businesses to support growth:
- Ethanol.
- Compressed biogas.
- Sustainable aviation fuel.
- Retail fuel outlets.
The project still requires a final investment decision, customer agreements, policy clarity, funding and execution.
TL;DR:
TruAlt Bioenergy plans to invest ₹2,250 crore in a sustainable aviation fuel plant in Andhra Pradesh. The project could consume 20 crore litres of ethanol, improve utilisation and reduce dependence on oil marketing company allocations.
AI summary
- TruAlt plans a ₹2,250 crore SAF project in Andhra Pradesh.
- The plant will have capacity of 10 crore litres a year.
- Management sees SAF as a second demand source for ethanol.
- Commercial production is expected around July-October 2027.
- CBG and retail fuel businesses are also expanding.
