Borosil Limited
Q1 FY26
Call date · August 18, 2025

1 · Management Commentary

Key Positives

  • Consolidated revenues from operations grew 5.2% YoY to INR 232.7 crores.
  • Operating EBITDA before investment income and one-time items rose 16.1% YoY to INR 40.2 crores; margin improved to 17.8% from 16%.
  • Profit after tax increased 87.4% YoY to INR 17.4 crores.
  • Non-glassware segment revenue up 10.7% YoY to INR 94.2 crores.
  • Cost control initiatives led to marketing spend reduction (INR 18 crores to INR 14.1 crores) and lower power/fuel costs (INR 20.4 crores to INR 17.5 crores).
  • Net debt as of June 30, 2025, at INR 5.1 crores.
  • Long-term revenue and EBITDA CAGR (FY18–FY25) at 23.5% and 34.3% respectively.

Key Negatives

  • Larah Opalware sales flat YoY (INR 76.2 crores vs INR 76.1 crores); glassware segment muted (INR 56.2 crores vs INR 55.7 crores).
  • B2B business impacted by UCPMP 2024, restricting incentives to healthcare professionals.
  • BIS compliance requirements affected hydra bottle sales.
  • Capacity utilization below expectations: opalware ~80%, glassware 60–65%.
  • Gross margins declined by 200–220 bps YoY due to product mix.

Forward Guidance

  • Capex plans: INR 40 crores for new Rajasthan facility (vacuum-insulated stainless steel flasks/bottles, 2.4 million units annual capacity, commercial ops Q4 FY26); INR 75 crores for 20 MW captive solar plant in Bikaner; total FY26 capex guidance INR 125–130 crores.
  • New products/segments: Launching gas stoves, porcelain dinnerware; continued focus on kitchen/table categories.
  • Expected client wins/losses: No specific guidance; B2B pharma channel loss due to UCPMP; hydra category supply improving.
  • Revenue/margin outlook: Medium-term revenue CAGR guidance of 15–20% maintained; target 20% EBITDA margin in 2–3 years.
  • Other strategic initiatives: Solar capacity expansion to reach 65% renewable power (targeting 100% in future); ongoing omnichannel expansion; considering exclusive brand outlets.

2 · Q&A Highlights

Q 1 (Composite): What is the roadmap for expanding Borosil’s brand into adjacent categories and evolving beyond glassware?
A (Management):
• Focus on kitchen, table, and storage categories; new launches in gas stoves and porcelain dinnerware this year; modular kitchens not planned currently but open to future opportunities; continual innovation and category expansion.

Q 2 (Composite): How is capital allocated between product innovation, digital distribution, and inorganic growth?
A (Management):
• Capital allocation is based on business size, scale, and potential returns; detailed in-house studies guide monthly allocation; focus remains on internal growth and returns above 20% ROCE.

Q 3 (Composite): What are the margin and capacity expectations for the new stainless steel facility and any further non-glassware capex?
A (Management):
• Entire new capacity for internal consumption; margin clarity expected in 3–6 months; ROCE target above 20% over time; no immediate further non-glassware capex planned.

Q 4 (Composite): What is the outlook for revenue growth and margin trajectory for FY26 and beyond?
A (Management):
• Medium-term revenue CAGR of 15–20% maintained; Q1 muted due to industry-wide demand softness; margin expansion driven by cost savings in power/fuel and marketing; 20% EBITDA margin target in 2–3 years.

Q 5 (Composite): How is the company addressing supply chain and channel challenges in hydra and other categories?
A (Management):
• Progress in onboarding new hydra suppliers, though supply still lags demand; SKU count in hydra ~100; ongoing efforts to improve supply predictability.

Q 6 (Composite): What are the trends in A&P spend, power/fuel cost savings, and channel incentives?
A (Management):
• A&P spend may reduce from 8% to 6–6.5% of sales due to improved performance marketing efficiency; annual power/fuel savings from solar projects expected at INR 30–32 crores post new capacity; no increase in channel incentives or discounts except regular Diwali offers.

Q 7 (Composite): What is the market share in opalware, and what is the revenue potential from the new flask facility?
A (Management):
• Opalware market share ~30%; new flask facility (phase I) expected to generate INR 120 crores annual revenue.

Q 8 (Composite): What is the plan for expanding retail reach and cross-selling across categories?
A (Management):
• Currently 24,000 regularly billed outlets; plan to reach 40,000–45,000 in 3–4 years; cross-selling effectiveness reflected in non-glassware growth; use of tech tools for tracking sales and penetration.

3 · Other Key Numbers

  • Consolidated revenues from operations: INR 232.7 crores (Q1 FY26), INR 221.2 crores (Q1 FY25)
  • Operating EBITDA before investment income and one-time items: INR 40.2 crores (Q1 FY26), INR 34.6 crores (Q1 FY25)
  • Operating EBITDA margin: 17.8% (Q1 FY26), 16% (Q1 FY25)
  • Profit before tax: INR 23.5 crores (Q1 FY26), INR 12.9 crores (Q1 FY25)
  • Profit after tax: INR 17.4 crores (Q1 FY26), INR 9.3 crores (Q1 FY25)
  • Net debt as of June 30, 2025: INR 5.1 crores
  • Larah Opalware sales: INR 76.2 crores (Q1 FY26), INR 76.1 crores (Q1 FY25)
  • Glassware revenues: INR 56.2 crores (Q1 FY26), INR 55.7 crores (Q1 FY25)
  • Non-glassware turnover: INR 94.2 crores (Q1 FY26), INR 85.1 crores (Q1 FY25)
  • Shared service support income: INR 6.03 crores (Q1 FY26), INR 4.21 crores (Q1 FY25)
  • One-time stamp duty expense provision reversal: INR 7.2 crores (Q1 FY26)
  • One-time professional fees expense: INR 1.6 crores (Q1 FY26)
  • Depreciation increase: INR 2.6 crores YoY
  • Finance cost decrease: INR 2.7 crores YoY
  • Marketing spend: INR 14.1 crores (Q1 FY26), INR 18 crores (Q1 FY25)
  • Power and fuel costs: INR 17.5 crores (Q1 FY26), INR 20.4 crores (Q1 FY25)
  • Solar power plants commissioned: 8.6 MWp (Dec '23), 7.2 MWp (Sep '24); new 20 MW plant planned
  • Solar power to cover ~30% of power needs currently; to reach 65% post new project
  • Opalware capacity utilization: ~80%; glassware: 60–65%
  • Opalware market share: ~30%
  • New flask facility (phase I) revenue potential: INR 120 crores annually
  • Planned capex for FY26: INR 125–130 crores
  • Number of retail outlets billed regularly: 24,000; total outlets billed: 37,000–38,000
  • Non-glassware SKUs: ~100
  • B2B pharma channel sales loss: more than INR 50 crores per year
  • CAGR (FY18–FY25): Revenue 23.5%, EBITDA 34.3%; Larah revenue CAGR since 2016: 26%; Non-glassware CAGR since FY17: 45%
  • Indian brown goods market: $5 billion (FY24), expected $9 billion (FY30), ~10% CAGR
  • Indian health and wellness market: $50 billion (FY24), expected $90 billion (FY30)
  • Indian lunchbox market: >INR 4,000 crores
  • Opalware plant capacity: 84 tons/day; borosilicate glassware plant: 25 tons/day (commissioned March '24)
  • Solar project annual savings: INR 13–14 crores currently, to increase by INR 17–18 crores post new project (total INR 30–32 crores)
  • Enabling resolution to raise INR 250 crores: not intended for immediate use
  • Maintenance capex included in guidance: Not disclosed
  • CSD channel: experiencing negative impact due to internal regulations
  • Export sales: base is "super low" (exact figure not disclosed)

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