BOROSIL RENEWABLES LIMITED

Swapnil Walunj

HEAD OF MARKETING

Sumit Kishore

AXIS CAPITAL

INR169 crore

uired overseas subsidiaries. During Q2 FY'23, the company recorded net revenue from operations of INR169 crore, a growth of 5% over previous year corresponding quarter. Sales volumes were lower than in Q2 FY'

5%

. During Q2 FY'23, the company recorded net revenue from operations of INR169 crore, a growth of 5% over previous year corresponding quarter. Sales volumes were lower than in Q2 FY'22 by 11% basis

11%

owth of 5% over previous year corresponding quarter. Sales volumes were lower than in Q2 FY'22 by 11% basis Ind AS adjustments, though the actual decline was only about 2%, which was attributed to a l

2%

e lower than in Q2 FY'22 by 11% basis Ind AS adjustments, though the actual decline was only about 2%, which was attributed to a lower production in September this year. Overall, domestic demand for s

25%

domestic manufacturing of modules and consequently, the demand for solar glass was higher by about 25% to 30% in Q2 FY'23. This additional demand has been made currently through a surge in imports owi

30%

c manufacturing of modules and consequently, the demand for solar glass was higher by about 25% to 30% in Q2 FY'23. This additional demand has been made currently through a surge in imports owing to l

22%

y. Market share of Borosil Renewables in domestic volume sales has consequently come down to about 22%. Export sales during Q2 FY'23, including to customers in SEZ were INR47.9 crore, comprising of 2

INR47.9 crore

equently come down to about 22%. Export sales during Q2 FY'23, including to customers in SEZ were INR47.9 crore, comprising of 28.3% of the turnover. Average prices of solar tempered glass during Q2 FY'23 were

28.3%

%. Export sales during Q2 FY'23, including to customers in SEZ were INR47.9 crore, comprising of 28.3% of the turnover. Average prices of solar tempered glass during Q2 FY'23 were about INR139 per MM,

INR139

rising of 28.3% of the turnover. Average prices of solar tempered glass during Q2 FY'23 were about INR139 per MM, an increase of over 18% over Q2 FY'22. Average price for the quarter was flat at the levels

18%

erage prices of solar tempered glass during Q2 FY'23 were about INR139 per MM, an increase of over 18% over Q2 FY'22. Average price for the quarter was flat at the levels prevailing in Q1 FY'23. Howeve

rs,

nificantly in September '22. Apart from the lifting of the imposition of ADD on Chinese manufacturers, the lower-than-expected demand in China has led to a drop in FOB prices with a support of 13% expo

“Our 10-megawatt captive power plant of solar plus wind energy through an SPV in which BRL will be holding 31% is expected to be commissioned by next month, December 22, and BRL will be able to use this green power besides reducing the cost of electricity.”

“- - In a recent development, the union government has closed the project import route that would have helped to circumvent the basic custom duty on solar modules and cells by paying lower duties.”

“However, the projects bid out before March '21 will be exempted from this.”

“Global supply chain bottlenecks and heavy rains in Gujarat delayed commissioning of our expansion project.”

“We now expect to commence production from our third furnace, SG#3 in December 22.”

“Can we expect the EBITDA margin to go back to the earlier quarter as we go forward?”

“We do expect over FY'24, there will be more commissioning, but I think commissioning on the domestic side has been pretty low as of now?”

“So we may not expect much relief in these two costs.”

“There has been a certain amount of premium, which we command for being a local producer because of certain benefits which they expect from us like inventories, the working capital, just in time and flexibility in ordering and many other benefits.”

“So it will be hard for me to comment on 15% or whatever number you are saying.”

Ashok Jain

12

Anuj Upadhyay

4

Sumit Kishore

3

Moderator

2

Santosh Kucheria

2

Naysar Parikh

1

Sharan

1

Ashok Jain

Ladies and gentlemen, good day, and welcome to the Q2 FY'23 Earnings Conference Call of Borosil Renewables, hosted by Axis Capital Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing “*” then “0” on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sumit Kishore from Axis Capital. Thank you, and over to you, sir. Thank you, Stephen. On behalf of Axis Capital, I'm pleased to welcome you all to the Borosil Renewables Q2 FY'23 Earnings Conference Call. We have with us the management team of Borosil Renewables represented by Mr. Ashok Jain, Whole- Time Director; and Mr. Swapnil Walunj, Head of Marketing. We will begin with opening remarks from Mr. Jain, followed by an interactive Q&A session. Over to you, sir. Thank you.

Ashok Jain

November 10, 2022 Borosil Renewables Limited benchmark it against the import landed cost of solar glass and since that has gone down, the domestic prices also have gone down. There has been a certain amount of premium, which we command for being a local producer because of certain benefits which they expect from us like inventories, the working capital, just in time and flexibility in ordering and many other benefits. So there is some premium which we get as a local manufacturer. That premium is slightly higher today as compared to past, but we had to adjust our prices downwards because of the lower prices.

Ashok Jain

Well, in the past, it used to be on an average 5% or so. Currently, it may be about 10%. Okay. Got it. And you mentioned the margins could be lower. So if we assume the September prices to continue, are we looking at like 15% kind of margin range? Or assuming the September current prices continue, how should we think about margins? So while it is not easy to predict the margin like that because the prices keep changing depending on the demand-supply scenario, particularly in the Chinese solar manufacturing. We already see certain strengthening in the prices as we speak. So we cannot be sure of what kind of margins it will finally be in the next quarters. So it will be hard for me to comment on 15% or whatever number you are saying. Okay. So okay, got it. And how much is the price cut that we took after the China duty stopped like mid-August, September. What is the price cut we took from our earlier pricing? So 10% to 13% was generally the cut to which we had to go through because of th

Sharan

productivity at that plant level. All those synergies are what we have discussed, which continue to be on our focus. Okay. Can you name the products, apart from glass? What are the products you are planning to develop in near future? Remains the same, solar glass only, but there are various segments which are serviced from there or here, which may not be the case at the other location. Then there are say coatings or say, two-side coated glass or various glasses, but for the same segment. So we will essentially be in the same product ranges. But segments could be added or new products for those segments could be developed at the other location, taking advantage of the synergies. And recently I was listening to the interviews of GHCL and Tata Chemicals, and next couple of years, they are very confident about the high price for soda ash. Is that going to affect Borosil Renewables, whether will you be able to pass on the price to your end customers and maintain the margin levels or that wi

Ashok Jain

The next question is from the line of Sumit Kishore from Axis Capital. Please go ahead. Two questions from me. First, what proportion of your exports are to locations with anti-dumping against China? And how competitive are you really in areas where there is no duty? Well, we used to have 20% or thereabouts of exports out of our total revenue. Currently, it is higher because the prices have been better in export markets and local prices have decreased from September, as we all know, because of the antidumping having gone. There is an antidumping duty in Europe and also in Turkey against China. But against Malaysia and Vietnam, there are no anti-dumping duties in any of the countries like Turkey or Europe or U.S.A. We are competing with China, Malaysia and Vietnam as a combined force because Malaysia and Vietnam production is also owned by the Chinese major players only. We are effectively dealing with them in that sense without an antidumping duty because the exports are coming from Ma

Anuj Upadhyay

Yes, they have and against Malaysia and Vietnam, they don't have. Right. So the next question is related. So after removal of antidumping duty on imports from China in India, what is the net value proposition for your customers in India to buy from Borosil Renewables versus importing from China? What is the pricing differential? Or any other value that the customer will see from buying from Borosil. Could you quantify that? Yes. So value proposition is of a local supplier and supply chain-related issue which is quite important in this industry because there is a very very high working capital involvement in module making industry. Solar glass is only about 10% of the cost of the module and the customers would like to have an assured supply source for this 10%, which can affect or disrupt their manufacturing line for the entire value chain. So they would like to have an assured source of supply, which is what we offer from India. Then we offer benefits in terms of working capital or fle