Borosil Renewables Limited Q1 FY27 Earnings Call Summary

Event Participants

Executives (4)

Ashok Jain, Dhaval Patel, Melwyn Moses, Sunil Roongta

Analysts (11)

Chetan, Deepak Purswani, Dhairya Trivedi, Karan, Nikhil Kanoria, Purvi, Sanyam Dhoka, Shivam Gupta, Siddharth Jain, Sidhaant Lodaya, Sonal

Financials & KPIs

Geographic & Segment Commentary

• Domestic Solar Glass (Standalone): Sales growth driven by pricing (+16% YoY realization) and +8% volume. Domestic demand remains robust; India still imports ~75% of solar glass requirement (demand ~11,000 TPD vs local capacity 2,600 TPD). Domestic capacity is expected to rise to 7,700 TPD by March ’27, still leaving a supply gap. Exports to the US are very small and niche, with no near-term impact from US tariffs; focus remains on India.

• Overseas Subsidiaries: No revenue in Q1 FY27; negative EBITDA of ₹0.84 crores (improved from -₹23.24 crores YoY). The German subsidiary investment has been written off, with no shareholder recovery expected from proceedings.

• Solar Rooftop Solutions: New business offering complete solar kits (module + inverter + battery), focused on residential on-grid systems. Q1 FY27 revenue ~₹1.3 crores; FY27 internal target ₹36 crores. Business is at a very early stage with single-digit EBITDA margin profile, unlike glass manufacturing.

• Captive Renewable Power: The solar-wind hybrid plant commissioned in March ’26 lifted renewable power share to 93% of total power consumption, generating >₹6 crores savings in Q1 and an expected ₹18 crores annually.

• Policy / Industry Environment: Indian module manufacturing capacity has reached 203 GW (vs 11 GW five years ago); ALMM 2 (domestic cells) effective from 1 June 2026, with cell capacity to rise to 75 GW by 2027; ALMM 3 for ingot/wafer scheduled from June 2028. CVD of 9.71% on Malaysian solar glass extended for 5 years from 2 June 2026, supplementing anti-dumping duties on China and Vietnam from December 2024.

Company-Specific & Strategic Commentary

• 600 TPD Capacity Expansion: Ongoing at existing location; construction to complete by December 2026, both furnaces (SG4/SG5) to be commissioned by March 2027. On commissioning, sales are expected to rise ~60% with corresponding EBITDA increase; incremental EBITDA estimated at ₹80–85 crores at current prices.

• Next Growth Phase: Management evaluating additional solar glass furnace versus adjacent glass products to diversify revenue streams. Decision expected in 5–6 months. Company targets growth from ~₹2,500 crores post current expansion to at least ₹4,000 crores over 3–4 years. No equity raise foreseen; internal accruals and possibly debt will fund the next project.

• Fuel Pass-Through Mechanism: Fuel surcharge of ₹9.50/sqm was invoiced from March 2026 to offset war-related fuel cost increases. Surcharge has already been trimmed as energy prices cooled; commitment to pass on cost reductions to customers makes the mechanism roughly margin-neutral.

• Furnace Refurbishment Planning: SG1 underwent a 4-day patchwork in Q1 (₹3 crores value impact). Full cold repair of SG1/SG2 is planned after SG4/SG5 commissioning, likely Q4 FY27–Q2 FY28, timing dependent on furnace health. Each repair involves ~75 days shutdown plus ~15 days restart (90 days downtime), causing quantum volume loss.

• Rooftop Solar Entry: Leveraging the Borosil brand; starting selectively in 2–3 states, residential on-grid kit business. Management sees larger long-term turnover potential than glass but single-digit profitability; volumes will determine materiality.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Q4-to-Q1 Profit Drop / Tax Write-Back

• Question: Net profit fell from ₹169 crores in Q4 FY26 to ~₹87 crores in Q1 FY27 despite only ~8% revenue decline; what caused the compression? (Shivam Gupta)
• Answer: Q4 FY26 PAT of ₹169 crores was inflated by a ₹75 crores tax-shield write-back after fully providing for the German subsidiary investment. Normalizing for that, Q1 performance is not inferior; Q4 also included ₹9.77 crores EBITDA from prior-period dispatches. (Ashok Jain)

US Tariffs / Export Exposure

• Question: What is the impact of US tariffs on exports? (Purvi)
• Answer: Exports to the US are very small and in niche applications, so no material impact. US could become a significant future market, but current focus is on the strong domestic market where prices are good. (Ashok Jain)

Rooftop Solar Business

• Question: What are the revenue expectations from the new rooftop solar business? (Purvi)
• Answer: FY27 internal target is ~₹36 crores; Q1 revenue was ~₹1.3 crores. Starting with small projects in 2–3 states; margins will be much lower than glass manufacturing—single-digit EBITDA—but volumes could make the profit contribution meaningful. (Ashok Jain)

Domestic Capacity Additions and Pricing

• Question: Domestic capacity rising from 2,600 to 7,700 TPD by March 2027—will domestic prices move down? (Dhairya Trivedi)
• Answer: Even at 7,700 TPD, supply will be only ~75% of demand; much of the new capacity is captive consumption. Import parity remains the reference price, and demand is robust enough that no pricing challenge is foreseen. (Ashok Jain)

Long-Term Growth Vision and Next Capex

• Question: How does the company plan to grow from FY28 beyond ₹4,000–5,000 crores? Can further capacity be added at the existing site? (Siddharth Jain)
• Answer: Management targets growth from ~₹2,500 crores to at least ₹4,000 crores in 3–4 years. Options include another solar glass furnace or adjacent glass products; a decision is expected in 5–6 months. Any additional capacity would be a new project/new building, possibly at the same location, with size (600/1,200 TPD) decided by the Board. (Ashok Jain)

Expansion Timeline and Customer Allocation

• Question: Is the 600 TPD expansion on track? Will revenue come only in FY28? Are volumes earmarked for existing customers? (Sanyam Dhoka)
• Answer: Construction is on track; both SG4 and SG5 will be commissioned by March 2027. Conservative modelling should take revenue from April 1, though internal target is March 1. Incremental volumes will go partly to existing customers and partly to past customers who couldn’t be serviced due to material paucity; final allocation will depend on module industry consolidation under ALMM 2. (Ashok Jain)

Fuel Surcharge and Realization

• Question: Does the ₹160.30 realization include the fuel surcharge, and how should we model it going forward? (Deepak Purswani)
• Answer: Yes, ₹9.50 of the realization is fuel surcharge. The surcharge has already been slightly reduced as energy prices cooled; it will keep compressing as fuel costs fall, but the mechanism is designed to be margin-neutral because costs also decline. (Ashok Jain)

Gross Margins and EBITDA Margin Outlook

• Question: Are ~80% gross margins sustainable, and can EBITDA margins keep rising? (Dhairya Trivedi)
• Answer: Raw material costs are ~23–24% of sales and selling prices are stable, so gross margin volatility is not expected. EBITDA margins in FY27 should be better than FY26 because the December ’24 anti-dumping duties and price increases were only partially in effect during FY26; FY27 will see full-year pricing. (Ashok Jain)

SG1/SG2 Refurbishment

• Question: When will SG1/SG2 refurbishment happen and what volume loss should we expect? (Deepak Purswani / Dhairya Trivedi)
• Answer: Furnaces are currently running after a 4-day SG1 patchwork (₹3 crores impact). Full cold repair is likely after SG4/SG5 commissioning—possibly Q4 FY27 to Q2 FY28—depending on furnace condition. Each repair needs ~75 days rebuild plus ~15 days restart (90 days downtime), causing quantum volume loss. (Ashok Jain)

Tax Rate and Promoter Time Allocation

• Question: Is ~26% tax rate sustainable, and how do promoters allocate time across three listed businesses? (Sonal)
• Answer: Use ~25.2% for FY27. P.K. Kheruka is Executive Chairman fully focused on Borosil Renewables, supported by the CEO, CFO and dedicated teams; Borosil Limited and Borosil Scientific have their own managements. (Ashok Jain)

Key Takeaway

Borosil Renewables delivered a strong Q1 FY27: standalone sales of ₹405.69 crores (vs ₹332.26 crores in Q1 FY26), EBITDA of ₹142 crores (+53% YoY) at a 35% margin—the fourth straight quarter above 33%—and full-capacity operations despite West Asia fuel disruption. Realization rose to ₹160.30/sqm (+16% YoY), aided by a ₹9.50 fuel surcharge that is already being trimmed as fuel costs ease. Management reaffirmed commissioning of the 600 TPD expansion (SG4/SG5) by Q4 FY27, which should lift sales ~60% and add ₹80–85 crores of incremental EBITDA, while evaluating a further growth project to take revenue from ~₹2,500 crores to at least ₹4,000 crores in 3–4 years. The new rooftop-solar kit business carries a ₹36 crores FY27 target at single-digit margins. Key watch points are domestic solar glass capacity additions (to 7,700 TPD by March ’27), fuel price volatility, module-industry consolidation under ALMM 2/3, and ~90-day SG1/SG2 cold repair downtime likely in FY28. Management remains confident given the persistent domestic supply gap and import-parity-supported pricing.