Any current/future new fundraising through debt or equity?

Borosil Limited raised Rs. 150 crores through a Qualified Institutional Placement (QIP) in June 2024 by issuing 47,16,981 equity shares at Rs. 318 each. The net proceeds were partly used (Rs. 60 crores) to repay working capital loans in Q1 FY25, with the remainder invested in short-term money market instruments. The company is in the process of making long-term loan repayments shortly. As of June 30, 2024, the net debt stood at Rs. 57.8 crores and remains broadly similar, with term loans around Rs. 125 crores and working capital debt about Rs. 7-8 crores. Post-QIP, Borosil expects net debt to

Any current/future capex/capital investment/strategic investment?

Borosil Limited commissioned a new borosilicate glass furnace in Q4 FY ‘24. The furnace is currently operating at about 70-75% capacity, with plans to reach 100% production by the end of this year. The company aims to sell the full furnace capacity by next year. The investment in the furnace is expected to generate a healthy return on investment (ROI). Borosil raised Rs. 150 crores through QIP in Q1 FY ‘25, primarily to repay long-term project loans and working capital loans. The balance QIP proceeds are invested in high-quality short-term money market instruments, with deployment scheduled th

Future growth expectations in sales/revenue/volumes?

FY '24 glassware sales were Rs. 200 crores; ~50% (Rs. 100 crores) was pressware. With new production capacity, pressware sales can grow to Rs. 250-270 crores (2.5x to 2.75x increase). Q1 FY '25 saw over 50% revenue growth in pressware, expected to sustain throughout the year. Furnace operating at ~75% capacity; target to reach 100% production by end of the year and full sales by next year. Opalware segment had a slow quarter but current capacity suffices for festive demand; inventory built for Diwali. Overall company targets 15-20% revenue growth trajectory; margins expected to trend

Future growth expectations in earnings/operating earnings/profits/EPS?

Borosil targets a 15% to 20% revenue growth trajectory, aiming to maintain this over the medium term. EBITDA margins, which were around 14-15% last year, are expected to trend upwards, potentially reaching low-20% range in 3-4 years aided by increased own production and operating leverage. The pressware division is poised for strong growth, with glassware sales having grown from Rs. 200 crores (FY24) to a potential Rs. 250-270 crores, reflecting 2.5x to 2.75x expansion in pressware sales. The new pressware furnace capacity utilization is expected to ramp up from 70-75% currently to full

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Borosil LtdQ2 FY24Consumer Durables

Borosil Ltd Q2 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹221P/E: 34.7Market Cap: ₹2.7K CrSector: Consumer Durables

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→FY '24 glassware sales were Rs. 200 crores; ~50% (Rs. 100 crores) was pressware.
→With new production capacity, pressware sales can grow to Rs. 250-270 crores (2.5x to 2.75x increase).
→Q1 FY '25 saw over 50% revenue growth in pressware, expected to sustain throughout the year.
→Furnace operating at ~75% capacity; target to reach 100% production by end of the year and full sales by next year.
→Opalware segment had a slow quarter but current capacity suffices for festive demand; inventory built for Diwali.
→Overall company targets 15-20% revenue growth trajectory; margins expected to trend upwards toward low-20% over 3-4 years as own production increases and operating leverage improves.
→Non-glassware segment growing strongly, with 20.3% revenue growth in Q1 FY '25.
→Long-term focus on domestic manufacturing and scaling production for sustained growth.

Margin guidance

Category 3

→Borosil targets a 15% to 20% revenue growth trajectory, aiming to maintain this over the medium term.
→EBITDA margins, which were around 14-15% last year, are expected to trend upwards, potentially reaching low-20% range in 3-4 years aided by increased own production and operating leverage.
→The pressware division is poised for strong growth, with glassware sales having grown from Rs. 200 crores (FY24) to a potential Rs. 250-270 crores, reflecting 2.5x to 2.75x expansion in pressware sales.
→The new pressware furnace capacity utilization is expected to ramp up from 70-75% currently to full (100%) by year-end, supporting revenue growth.
→Profit after tax increased from Rs. 5.0 crores (Q1 FY24) to Rs. 9.3 crores (Q1 FY25), showing strong earnings momentum.
→Long-term margins and profits are expected to improve due to gross margin improvement from increased domestic production and operating leverage in marketing and manpower costs.
→While cautious due to market conditions, the company intends to under-promise and potentially over-deliver on earnings growth.

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Fundraise plans

Yes

→Borosil Limited raised Rs. 150 crores through a Qualified Institutional Placement (QIP) in June 2024 by issuing 47,16,981 equity shares at Rs. 318 each.
→The net proceeds were partly used (Rs. 60 crores) to repay working capital loans in Q1 FY25, with the remainder invested in short-term money market instruments.
→The company is in the process of making long-term loan repayments shortly.
→As of June 30, 2024, the net debt stood at Rs. 57.8 crores and remains broadly similar, with term loans around Rs. 125 crores and working capital debt about Rs. 7-8 crores.
→Post-QIP, Borosil expects net debt to reduce to zero by the end of FY25, with some cash surplus.
→There is no mention of any current or upcoming plans for fresh debt or equity fundraising beyond the QIP completed in June 2024.

Order book

The transcript does not explicitly mention the current or expected order book or pending orders for Borosil Limited. However, from the information available: - Q1 FY25 showed strong sales growth, particularly in the glassware and pressware segments, indicating robust demand. - Inventory buildup of about 25% of pressware production is in place for the festive season (Diwali), reflecting anticipated order fulfillment. - The company is operating pressware furnace at 70-75% capacity and aims to reach 100% capacity by year-end, implying growing order volumes. - Sufficient capacity in Opalware exists to satisfy current and festive demand. - The firm is confident about sustaining revenue growth and increasing sales from Rs. 200 crores to Rs. 250-270 crores in pressware for FY24, suggesting a healthy order pipeline. No specific numeric data on orderbook or pending orders is provided.

Capex plans

Yes

→Borosil Limited commissioned a new borosilicate glass furnace in Q4 FY ‘24.
→The furnace is currently operating at about 70-75% capacity, with plans to reach 100% production by the end of this year.
→The company aims to sell the full furnace capacity by next year.
→The investment in the furnace is expected to generate a healthy return on investment (ROI).
→Borosil raised Rs. 150 crores through QIP in Q1 FY ‘25, primarily to repay long-term project loans and working capital loans.
→The balance QIP proceeds are invested in high-quality short-term money market instruments, with deployment scheduled through FY 2024-25.
→There is ongoing strategic vendor development to support domestic sourcing for appliances amid BIS certification requirements.
→The company targets increased in-house production to achieve gross margin improvements and operating leverage in the medium term.

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