Borosil — Q2 FY26 earnings call

Call held 10 Nov 2025

Management summary

Borosil delivered a strong H1 FY26 performance with double-digit revenue and PAT growth, driven by robust demand in glassware and non-glassware segments. Despite margin pressures from the shift to local sourcing and BIS compliance challenges impacting hydra sales, the company is investing in domestic manufacturing to enhance compliance and supply chain resilience. Management remains bullish on long-term demand and market trends towards healthier, eco-friendly products.

Highlights

  • Consolidated revenues from operations grew 14.7% YoY to INR 573.0 crores in H1 FY26.

  • Operating EBITDA increased 9.5% YoY to INR 90.1 crores, with a margin of 16.1%.

  • PAT surged 45.3% YoY to INR 40.1 crores, partly due to a one-time stamp duty reversal.

  • Larah Opalware sales grew 7.8% YoY to INR 195.4 crores.

  • Glassware segment revenue increased 27.4% YoY to INR 148.6 crores.

  • Non-glassware segment revenue rose 12.4% YoY to INR 216.6 crores, despite hydra category degrowth.

  • Net debt stood at a low INR 4.5 crores as of September 30, 2025.

  • Approved INR 65 crores CAPEX for new stainless steel flask manufacturing, targeting 3.6 million units/year capacity.

Concerns

  • Revenue loss in hydra product category due to BIS compliance requirements and inability to supply market demand.

Key financials

  1. Consolidated Revenue ₹573 Cr +14.7%YoY
  2. Operating EBITDA ₹90.1 Cr +9.5%YoY
  3. Operating EBITDA Margin 16.1%
  4. PAT ₹40.1 Cr +45.3%YoY
  5. Net Debt ₹4.5 Cr

What they filed

Q1 FY27: revenue up 10.3%, net profit down 17.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue274 338 270 233 340 +24%339 +0%286 +6%257 +10%
EBITDA41 54 37 37 48 +17%53 −2%30 −19%35 −5%
Net profit18 35 11 17 23 +28%24 −31%11 +0%14 −18%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Larah Opalware
    ₹195.4 Cr Sales
  • Glassware
    ₹148.6 Cr Revenue
  • Non-glassware
    ₹216.6 Cr Revenue

Guidance & targets

Capex

  • Estimated CAPEX for double-wall production lines Capex · Ongoing · High confidence INR 65 crores
    The project will now include three double-wall production lines for vacuum-insulated steel flasks, bottles, and containers with an estimated capacity of 3.6 million units per year and with an estimated CAPEX of INR 65 crores.

    — Shreevar Kheruka, Managing Director and CEO

  • Future CAPEX beyond current projects Capex · From FY27 onwards · Low confidence More and more CAPEX
    From FY'27, not even '28. But like I said, I don't want to get into specifics because these are just under consideration and haven't been approved by the Board yet.

    — Shreevar Kheruka, Managing Director and CEO

Capacity

  • Estimated capacity for double-wall production lines Capacity · Post project completion · High confidence 3.6 million units per year
    estimated capacity of 3.6 million units per year

    — Shreevar Kheruka, Managing Director and CEO

Commercial Production

  • Commercial production start for two double-wall lines Commercial Production · Q4 FY26 · High confidence Q4 FY26
    Estimated commercial production dates from two double-wall lines is by the end of this financial year, that's Q4 FY'26

    — Shreevar Kheruka, Managing Director and CEO

  • Commercial production start for third double-wall line Commercial Production · Q1 FY27 · High confidence Q1 FY27
    from the third double-wall line by the end of Q1 FY'27, subject to receipt of necessary approvals.

    — Shreevar Kheruka, Managing Director and CEO

Revenue

  • Peak revenue potential from past CAPEX (including new flask CAPEX) Revenue · Full utilization · Medium confidence INR 900 crores to INR 1,000 crores
    Maybe 900 crores to 1,000 crores.

    — Shreevar Kheruka, Managing Director and CEO

Local Sourcing

  • Proportion of non-glassware client revenues made in India Local Sourcing · Next 12 months · High confidence 70%-80%

    From 50% today

    Already, roughly 50% of our clients revenues are made in India and this number will go 70%-80% in the next 12 months.

    — Shreevar Kheruka, Managing Director and CEO

Revenue Growth

  • Overall revenue growth Revenue Growth · FY26 · Low confidence 15-20%

    Previously 15-20% → 15-20%

    If we had ability to supply, I would definitely stick to that 15%-20% number.

    — Shreevar Kheruka, Managing Director and CEO

Production

  • Stainless steel facility production start Production · Q4 FY26 · High confidence Q4 FY26
    stainless steel facility expect production by Q4FY26.

    — Shreevar Kheruka, Managing Director and CEO

  • Solar plant energy supply start Production · Q4 FY26 · High confidence Q4 FY26 (Feb-March)
    Solar plant also, I think in the next couple of months, by maybe also Q4FY26, we should start seeing some net metering or rather some supply of energy from that plant, maybe Feb-March.

    — Shreevar Kheruka, Managing Director and CEO

  • First full quarter for stainless steel facility and solar plant Production · Q1 FY27 · High confidence Q1 FY27
    The first full quarter for both will be Q1 of next year.

    — Shreevar Kheruka, Managing Director and CEO

Risks & concerns

  • Revenue loss in hydra product category due to BIS compliance requirements and inability to supply market demand.

    high

    BIS compliance affected hydra bottle sales, leading to lost potential revenue growth, though recovery is expected from Q4 FY26.

    Management acknowledged

  • Margin pressure in non-glassware due to less efficient local sourcing ecosystem compared to overseas vendors.

    medium

    In the short run, there's pressure on gross margins in the non-glassware segment due to moving substantial volumes from abroad to Made in India.

    Management acknowledged

  • Difficulty in achieving desired level of local sourcing for non-glassware segments to meet BIS requirements.

    medium

    Management hoped for more local sourcing but it's not working out to the level, leading to in-house manufacturing investments.

    Management acknowledged

  • Overall FY26 revenue growth guidance (15-20%) is under pressure due to supply constraints in certain product categories.

    medium

    Ability to supply product categories is a day-to-day struggle, preventing management from changing guidance upwards despite strong demand.

    Management acknowledged

Areas of evasion (2)

  • Specific timelines for future CAPEX beyond the currently approved projects
  • Precise ramp-up timeline for the new steel facility beyond general estimates

Q&A highlights

3 direct
Reasons for margin pressure in Q2 FY26 Direct
So, basically, there's two reasons for reduction in margin. One is that in the non-glassware segment, we have had to start moving substantial volumes from made abroad to Made in India. And in the short run, the vendor ecosystem in India is not as efficient as the vendor ecosystem overseas... The second thing is in the non-glassware itself, we lost a reasonable amount of revenue on this hydra product category, which was higher margin.

Directly explains the underlying operational challenges (local sourcing inefficiencies, product mix shift) contributing to margin compression.

Asked by Pranay Roop Chatterjee

Impact of BIS compliance on hydra bottle sales and recovery timeline Direct
There is an impact... we did lose out on potential revenue growth... But probably from Q4, we will start seeing some bounce back, and maybe Q1 of next year, we should be back to normal, I would say, output or normal sales.

Clarifies the short-term revenue loss due to regulatory changes and provides a timeline for recovery as new manufacturing capacities become operational.

Asked by Pranay Roop Chatterjee

Working capital impact from BIS compliance and shift to local sourcing Direct
So, there will be some working capital impact. Although, frankly speaking, it will not be that material because last year, our inventory went up because we had a higher inventory of hydra, which has now come down. And that will be replaced by BIS inventory of appliances. So, net-net from last year, I don't think there'll be much impact. But I'd have expected working capital to reduce this year, which may not happen.

Addresses a potential financial strain (working capital) from strategic shifts, providing a nuanced view of the net impact on the balance sheet.

Asked by Bhavin Rupani

3 min read 6 chapters

Detailed narrative

H1 FY26 Financial Performance Overview

Borosil reported a strong H1 FY26, with consolidated revenues from operations growing 14.7% YoY to INR 573.0 crores. Operating EBITDA increased 9.5% YoY to INR 90.1 crores, though the margin slightly compressed to 16.1% from 16.8% in the previous year. PAT saw a significant surge of 45.3% YoY, reaching INR 40.1 crores, partly benefiting from a one-time stamp duty expense provision reversal of INR 7.2 crores. The company maintained a healthy balance sheet with net debt at INR 4.5 crores as of September 30, 2025.

Segmental Growth and Performance

The Larah Opalware segment recorded sales of INR 195.4 crores, growing 7.8% YoY. The glassware segment demonstrated impressive growth of 27.4% YoY, with revenue reaching INR 148.6 crores, driven by increased customer choices and a shift towards glass products. The non-glassware segment also performed strongly, posting a 12.4% increase in revenue to INR 216.6 crores, despite facing headwinds and degrowth in the hydra bottle category due to BIS compliance.

CAPEX and Manufacturing Expansion for BIS Compliance

Borosil approved an INR 65 crores CAPEX for three double-wall production lines for vacuum-insulated steel flasks, bottles, and containers, targeting an estimated capacity of 3.6 million units per year. This investment is critical for BIS compliance and reducing dependence on imports. Two lines are expected to commence commercial production by Q4 FY26, with the third by Q1 FY27. Additionally, the new stainless steel facility and solar plant are expected to begin production by Q4 FY26, with their first full quarter of operation in Q1 FY27.

Margin Pressures and BIS Impact on Hydra

Operating EBITDA margin experienced a slight decline, primarily due to two factors. Firstly, the shift from imported to Made in India products in the non-glassware segment led to pressure on gross margins, as the local vendor ecosystem is less efficient in the short run. Secondly, the product mix was impacted by a loss of higher-margin hydra sales due to BIS compliance requirements. Management acknowledged losing potential revenue growth in hydra but expects a bounce-back from Q4 FY26 as new capacities become available.

Cost Control and Operational Efficiency

The company maintained a prudent approach to cost management in H1 FY26. Advertising and sales promotion expenses remained stable at INR 38.1 crores, similar to the prior year. Power and fuel costs saw a decline from INR 42.3 crores to INR 36.9 crores, reflecting continued focus on operational efficiency. Shared service support income also contributed positively, increasing to INR 12.1 crores from INR 8.4 crores in the same period last year.

Long-Term Outlook and Market Trends

Management expressed a bullish long-term outlook, citing India's rising per capita GDP (projected INR 1.4 lakh for FY26) and the rapidly expanding brown goods market, expected to reach $9 billion by FY30. Borosil is well-positioned to capitalize on the clear shift towards health and sustainability, with consumers moving away from plastic to toxin-free, durable materials like glass, steel, and Opalware. The company sees strong potential in the INR 4,000 crore lunchbox market, aligning with its premium glass lunchbox offerings.

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