BORORENEWNSEFebruary 21, 2025

BOROSIL RENEWABLES LIMITED

7,900words
146turns
15analyst exchanges
5executives
Management on call
P.K. Kheruka
EXECUTIVE CHAIRMAN – BOROSIL RENEWABLES LIMITED
Ashok Jain
WHOLE-TIME DIRECTOR – BOROSIL RENEWABLES LIMITED
Sunil Roongta
WHOLE-TIME DIRECTOR AND
Balesh Talapady
VICE PRESIDENT, INVESTOR
Rohan Gheewala
AXIS CAPITAL LIMITED
Key numbers — 40 extracted
14%
onsolidated basis. The total sales during the third quarter of the current financial year grew by 14% in volume over the previous quarter, but could achieve only a growth of about 3.6% by value from
3.6%
al year grew by 14% in volume over the previous quarter, but could achieve only a growth of about 3.6% by value from -- to INR275.28 crores, up from INR265.61 crores in the preceding quarter. The pric
INR275.28 crore
me over the previous quarter, but could achieve only a growth of about 3.6% by value from -- to INR275.28 crores, up from INR265.61 crores in the preceding quarter. The price pressure came from a steep decline
INR265.61 crore
rter, but could achieve only a growth of about 3.6% by value from -- to INR275.28 crores, up from INR265.61 crores in the preceding quarter. The price pressure came from a steep decline in average ex-factory pri
INR105
e ex-factory prices driven by increased Chinese dumping at ever lower prices. These fell to about INR105 per millimeter per square meter, which would correspond to about INR42,000 per ton, down from the
INR42,000
ices. These fell to about INR105 per millimeter per square meter, which would correspond to about INR42,000 per ton, down from the preceding quarter's average selling price of INR115 per millimeter per squa
INR115
correspond to about INR42,000 per ton, down from the preceding quarter's average selling price of INR115 per millimeter per square meter, which would work out to about INR46,000 a ton. The EBITDA stood r
INR46,000
's average selling price of INR115 per millimeter per square meter, which would work out to about INR46,000 a ton. The EBITDA stood reduced at INR20.89 crores as against INR52.88 crores in the preceding q
INR20.89 crore
eter per square meter, which would work out to about INR46,000 a ton. The EBITDA stood reduced at INR20.89 crores as against INR52.88 crores in the preceding quarter. The imposition of a 10% basic customs duty
INR52.88 crore
h would work out to about INR46,000 a ton. The EBITDA stood reduced at INR20.89 crores as against INR52.88 crores in the preceding quarter. The imposition of a 10% basic customs duty on imports from 1st October
10%
duced at INR20.89 crores as against INR52.88 crores in the preceding quarter. The imposition of a 10% basic customs duty on imports from 1st October last year failed to make any impact on the landed
18%
act on the landed prices of the imported glass because the Chinese cut their export FOB prices by 18%.This decline in the landed price of imported glass was compounded by a drop in ocean freight duri
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Guidance — 20 items
P.K. Kheruka
opening
“This rate of installation is expected to speed up in the coming years, and we may expect to see installations rising to 40 to 50 gigawatts annually going forward.”
P.K. Kheruka
opening
“We expect the new government to implement this policy.”
P.K. Kheruka
opening
“Our stand-alone results are expected to show a marked improvement in profitability in the ensuing quarters on the back of better selling prices going forward.”
P.K. Kheruka
opening
“The allotment of shares warrants was done on Friday, the proceeds of INR517.66 crores including the promoters' applications will be utilized in due course as per the objects of the issue.”
P.K. Kheruka
opening
“We still work on the expansion, 500 tons per day has started and we shall firm up the project cost and take steps to place orders for long lead items over the next few months.”
P.K. Kheruka
opening
“We expect to commission the new facility by September 2026.”
Ashok Jain
qa
“And out of that, certain amount out of these proceeds will be used for funding capex and balance will be funded from accruals and bank loans.”
Ashok Jain
qa
“So we expect certain pushback from the customers who would potentially be importing from Malaysia, but we have more customers to sell our goods to.”
Ashok Jain
qa
“So from that perspective, we should expect this decision to be in the beginning of May, at the most at the latest.”
Ashok Jain
qa
“So by September '26, we will be able to commission the plant.”
Risks & concerns — 9 flagged
The price pressure came from a steep decline in average ex-factory prices driven by increased Chinese dumping at ever lower prices.
— P.K. Kheruka
The imposition of a 10% basic customs duty on imports from 1st October last year failed to make any impact on the landed prices of the imported glass because the Chinese cut their export FOB prices by 18%.This decline in the landed price of imported glass was compounded by a drop in ocean freight during the quarter.
— P.K. Kheruka
The decline in EBITDA has led to the company posting a post-tax loss of INR8.64 crores in the third quarter '24-'25 compared to a profit after tax of INR12.62 crores in the previous quarter and a post-tax loss of INR11.04 crores in the corresponding quarter in the last year.
— P.K. Kheruka
Landed prices of imported glass reflected the full value -- reflected the full impact of the duties immediately with effect from 4 December 2024.
— P.K. Kheruka
The impact of the improved prices will get reflected in the company's financial performance with effect from the beginning of January and are expected to move near the level of the reference price during the quarter.
— P.K. Kheruka
The considerable decline in EBITDA has arisen from the lower profitability of Indian operations, mainly due to the lower selling prices, as discussed earlier.
— P.K. Kheruka
So the existing players, since there are huge entry barriers in this -- the existing players need to ramp up the capacity further to take the challenge of '27 and '28.
— Bajrang Bafna
So it is difficult to say that how much percentage will come.
— Ashok Jain
So at this moment, it would be very difficult for them to bypass it.
— P.K. Kheruka
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Q&A — 15 exchanges
Q
Sir, I have a question regarding -- you have recently raised INR 517 crores on the -- including promoter and non-promoter. So what is the capex outlook for 500 tons, how much amount to fund the capex?
Ashok Jain
So the capex on the 500 ton furnace was initially estimated at INR 675 crores. And out of that, certain amount out of these proceeds will be used for funding capex and balance will be funded from accruals and bank loans. Sir, I have a follow-up question. You have canceled the rights issue of INR450 crores and raised around INR517 crores. Out of which, INR100 crores has been issued given by promoter as well. Why not you raised INR450 crores from the minority shareholder and used all that amount for the capex which was INR675 crores? Can you repeat your question, please? Sir, actually your origi
Q
Your voice is very low. Can you be louder, please?
Management
Q
Am I audible, sir?
Ashok Jain
Yes, please go -- better. Sir, your original plan was to raise INR450 crores to do rights issue. However, you choose to raise the fund using preferential issue, in which INR100 crores was driven by promoter and rest INR417 crores was driven by non-promoter. Why not raise the INR450 crores from the existing rights issue to use for the capex of INR350 crores? See, the right issue was going on. And in the meantime, we were approached by some investors that they can put in money by way of a preferential issue and the amount could be larger. And around that time, this duty -- antidumping announceme
Q
Sir, am I audible?
Management
Q
Am I audible, sir?
Management
Q
Sir, while I see that antidumping duty effectively -- with effect from 5 December '24. In the past, we have seen that China used Malaysia for dumping the product via Malaysia to India. Are we seeing that in present scenario also?
Ashok Jain
See, until the time the duty was imposed on China and Vietnam, the imports from Malaysia will barely anything. But as you rightly pointed out, when the situation changes, the duties get changed, the Chinese use their other territories to export to India. So there are exports which will come from Malaysia. But what we feel is that all the exports cannot come from Malaysia, first of all. And all the customers are not in a position to get material from Malaysia. So there is a tremendous demand in India. And even if some customers want to import from Malaysia, it is possible that it will come at a
Q
Sir, really wish you all the very best for the antidumping duty that has been put up by the government and which will definitely change the fortunes of this industry. So just to get a sense, sir, we see there are multiple vendors or the multiple competition, which is going on aggressively in India as far as modules are concerned or maybe the sales are concerned. We are getting a figures of next 2, 3 years will have the capacity to the tune of 150 gigawatt for the modules and close to 70 to 80 gigawatts for cells. But when we see the similar thing for glass where we are active, even you have co
Ashok Jain
So you're right, the capacities of module manufacturing would or are expected to rise to 150 gigawatts. But when we talk of that capacity, it is a nameplate capacity. The actual utilization, what we have seen is that it is close to 45%, 50%. So we can assume that the actual utilization is not likely to exceed 65, 70 gigawatt in that sense. And similarly, the solar cell capacity, if it is at 70, 80, it will match with the module production and the requirement of solar cells. But in the case of glass, actually, the industry is heavy capital- intensive industry and the time to commission the proj
Q
So my question is, is there any fund raise company is planning in the coming future?
P.K. Kheruka
Ashok? No. Currently, we have just completed the fund raise. So currently, there is no plan. But in case there is some planning at a later stage, we will, of course, come back to the investors and shareholders. For the expansion, which we are currently taking on hand, we don't think further funds may be raised from the equity, but it's all subject to Board taking a call depending on the situation. Okay. My last question is how much budget the company has parked for R&D in coming FY '25? So we have a complete R&D center, which is headed by a very senior technical person and with a strong team a
Q
So in anticipation of this ADD, is it possible that the module manufacturers might have slightly stocked up in the previous months?
P.K. Kheruka
Yes, there is every possibility that they might have done it except that you see the duty has already been applicable from the 5th of December. So any further imports that have been cleared, the imports might have been made earlier, but if they are cleared from customs after 5th December, they would have had to pay the additional duty. So therefore, under the circumstances, it is not likely that anybody would be spending money to just stock up for no good reason. Because there will be no advantage. Got it, sir. That's all from my side.
Q
Firstly sir, what are our utilization levels currently for this quarter and for the 9 months?
P.K. Kheruka
We are running at a production rate of about 950 tons against our 1,000 ton capacity, and we are trying to ramp up production even more. So let us see what happens in the current quarter, we could be improving on the levels that we achieved in the last quarter. And sir, what are the key components of the other income? And if you could give the color on the same? Ashok? Sorry, can you repeat the question, please? My question is, sir, what are the key components of the other income? Other income for this quarter was at INR15 crores. So other income comprises of certain incentives, which we get f
Q
My questions have been answered.
Management
Q
My questions regarding this you mentioned that your turnover will grow up by around INR60 crores if the current price is maintained and you improved the utilization. So can we expect the entire at least 60% to 70% will come to the bottom line in this fourth quarter?
Ashok Jain
See, we are trying to raise the prices towards the reference price, which is say INR140 or say INR56,000. But as of now, we have not reached there. So it is difficult to say that how much percentage will come. But whatever number we are saying is about INR60 crores or so, we are aiming to reach that level very soon. Maybe it will happen on a monthly basis from March. But on an average January to March, it cannot reach the exact number. Okay. But currently, in January, have you seen this development in our financials? Or it is still early to say something on this? No, it's already happening. As
Q
Sir, my first question is, can you sort of highlight the current capacity that is there of Indian manufacturers in India? I think you sort of mentioned that we might see addition of 11 to 12 gigawatts. I was under the assumption, we were at around 15, 16 gigawatts currently. Then when you said that we go to 41 gigawatts, I just wanted to understand the math here.
P.K. Kheruka
Ashok, you answer. Sorry. The current capacity is 15 gigawatt and another 15 are getting added in this calendar year. After that, another 11.2 gigawatt is under implementation from Vishakha and ourselves. So that will commission in 2026. So at the end of 2026, we expect this to be at, at least 41 gigawatts, that's the current status. If there is any other announcement which comes in, in between, that will also get added. Understood, sir. Sir, this 15 gigawatt that you're saying the first level, that is going to come in this particular year, right? Yes, this calendar year. Okay. Okay. And then
Q
Sir, my question is, do we take the complete solar power project?
P.K. Kheruka
No. We just manufacture the glass, and we sell to the people who manufacture the modules. I'm sorry, we are not engaged in solar power. Nothing like in further this forward integration? At this moment, it's not there. But everything is open in business, you know that. Right now, we are focusing on just expanding the production of glass. Why I'm asking is that there is an ample scope in solar project in India, and the industry is also booming. So might be -- my question was, we can think of that also. Thank you so much. Thank you for your suggestion. We'll definitely look into it. So who are ou
Q
Thank you. I thank all the participants for all the questions that they have asked. I'm very happy to see a reasonably good turnout in the number of people who have joined this conference. I just would like to close by saying that we have gone through a rather challenging period in the last several -- the last couple of years. But there are fair wins ahead, and we can see already from the 1st of January, there's been an improvement in our performance. And I'm sure that when we have our next earnings call in May, it would be with better results, and we all feel happy with your investments in ou
Management
Speaking time
Ashok Jain
36
P.K. Kheruka
31
Moderator
17
Rabindra Nayak
14
Sunny
12
Saket Kapoor
9
Nikhil Gada
9
Bajrang Bafna
5
Lalit
5
Rikin Shah
3
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Opening remarks
Rohan Gheewala
Thank you. Good evening, everyone. On behalf of Axis Capital, I'm pleased to welcome you all for the Q3 FY '25 Earnings Conference Call of Borosil Renewables Limited. We have with us the management represented by Mr. P.K. Kheruka, Executive Chairman; Mr. Ashok Jain, Whole-Time Director; Mr. Sunil Roongta, Whole-Time Director and Chief Financial Officer; and Mr. Balesh Talapady, VP, Investor Relations. We thank the management for giving us the opportunity to host the call. We will begin with the opening remarks from the management followed by an interactive Q&A session. Thank you, and over to you, sir.
P.K. Kheruka
Good afternoon, and welcome to the Borosil Renewables Quarter 3 Financial Year '24-'25 Investor Call. This is Pradeep Kheruka, Chairman. On the 14th of February, the Board of Borosil Renewables approved the company's financial results for the third quarter of the current financial year. Our results and an updated presentation have been sent to the stock exchanges and have all been uploaded on the company's website. We will discuss the operations of the company on a stand-alone basis as well as on a consolidated basis. The total sales during the third quarter of the current financial year grew by 14% in volume over the previous quarter, but could achieve only a growth of about 3.6% by value from -- to INR275.28 crores, up from INR265.61 crores in the preceding quarter. The price pressure came from a steep decline in average ex-factory prices driven by increased Chinese dumping at ever lower prices. These fell to about INR105 per millimeter per square meter, which would correspond to abo
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