Borosil — Q4 FY25 earnings call

Call held 20 May 2025

Management summary

Borosil Limited delivered a strong FY25 performance with robust revenue and EBITDA growth, driven by strategic investments and category expansion. The company achieved a 16.8% YoY revenue increase to INR1,107.8 crores and a 22.6% rise in operating EBITDA. While facing challenges from regulatory changes impacting B2B sales and leading to higher inventory, Borosil is focused on leveraging its expanded production capacities and maintaining its long-term growth trajectory.

Highlights

  • Revenue from operations reached INR1,107.8 crores in FY25, up 16.8% YoY.

  • Operating EBITDA grew 22.6% YoY to INR177.7 crores in FY25.

  • Operating EBITDA margin expanded to 16.3% in FY25 from 15.4% in FY24.

  • Profit Before Tax (PBT) was INR103.2 crores in FY25, up from INR87.8 crores in FY24.

  • PAT for FY25 was INR74.2 crores, up from INR65.9 crores in FY24.

  • Glassware segment recorded exceptional 27.2% YoY growth, reaching INR252 crores.

  • Non-glassware segment grew 17.2% to INR453 crores.

  • Net debt stood at INR26.5 crores as on March 31, 2025.

Concerns

  • Increased Inventory Carrying Costs due to BIS/QCO Regulations

  • Revenue/Margin Impact from Hydra Inventory Depletion

Key financials

  1. Revenue from Operations ₹1,107.8 Cr +16.8%YoY
  2. Operating EBITDA ₹177.7 Cr +22.6%YoY
  3. Operating EBITDA Margin 16.3%
  4. PBT ₹103.2 Cr
  5. PAT ₹74.2 Cr
  6. Operating ROCE 11.5%
  7. Net Debt ₹26.5 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
    ₹384 Cr Sales7.3% Growth
  • Glassware
    ₹252 Cr Revenues27.2% Growth
  • Non-glassware
    ₹453 Cr Turnover17.2% Growth

Guidance & targets

Capacity Utilization

  • Borosilicate Plant Utilization Capacity Utilization · this current period · Medium confidence closer to 90%, 95%
    And we have taken a very stretched target that we should go to closer to 90%, 95% in this current period, which would be a very good success and which would, therefore, improve the ROCE quite well.

    — Shreevar Kheruka

Capex

  • Vacuum Insulated Stainless Steel Flasks Manufacturing Unit Capex Capex · High confidence INR40 crores
    The estimated capital expenditure of the project is INR40 crores, which will be financed through a mixture of debt and internal accruals.

    — Shreevar Kheruka

  • Regular Maintenance Capex Capex · this particular year · High confidence maybe INR20-odd crores
    And then there's regular maintenance capex, which may happen, which would not be a lot, maybe INR20-odd crores. So that's the only capex we have in this particular year.

    — Shreevar Kheruka

Revenue

  • Revenue from INR40 crores Flask Capex Revenue · Medium confidence about INR100 crores
    So if it's a INR40 crores capex, you could probably do about INR100 crores of revenue from that.

    — Shreevar Kheruka

  • Opalware Revenue at 100% Utilization Revenue · in FY '26 · High confidence around INR430 crores to INR440 crores
    if theoretically, in FY '26, blended, you reach 100% utilization, would your revenue peak on current capacity be around INR430 crores to INR440 crores? Is that a fair number? Yes, that's a fair number. That's a fair number.

    — Shreevar Kheruka

ROCE

  • Borosilicate Plant ROCE at Full Capacity ROCE · Medium confidence more than 24%
    But I mean, frankly speaking, this plant at full capacity utilization should deliver ROCE more than 24%. That's our working.

    — Shreevar Kheruka

Inventory

  • Opal Glass Inventory Days Inventory · in a couple of years' time · Medium confidence between 45 and 90 days
    in a couple of years' time, when the BIS issues are solved and our glass plant is running at full utilization, I would say inventory would be similar to what our opal glass inventory is between 45 and 90 days.

    — Shreevar Kheruka

Fundraise

  • INR250 crores Fundraise Fundraise · this year · Low confidence —
    it's an enabling resolution... We are not at the moment planning to raise any money... I'm pretty sure we'll not be raising any money this year unless something dramatically changes. It's a moot point.

    — Shreevar Kheruka

Revenue Growth

  • Company CAGR Revenue Growth · over the next 3, 4 years from here through 2030 · Medium confidence 15% to 20%
    But I will say that we maintain our 15% to 20% CAGR over the next 3, 4 years from here through 2030.

    — Shreevar Kheruka

Profitability

  • EBITDA Margin Improvement from Rationalization Profitability · over the next 2, 3 years · Medium confidence 2% to 3%
    I do believe in the next 2, 3 years, these numbers will rationalize and will add maybe 2%, 3%, 4% I would say 2% to 3% would be added to our EBITDA with the rationalization of these numbers over the next 2, 3 years.

    — Shreevar Kheruka

Capacity

  • Flask Manufacturing Capacity Doubling Capacity · very shortly thereafter · High confidence double our capacity
    this is a starting point. We will have space to double our capacity very shortly thereafter.

    — Shreevar Kheruka

Risks & concerns

  • Increased Inventory Carrying Costs due to BIS/QCO Regulations

    high

    INR80-100 crores of extra inventory in non-glassware (Hydra, appliances) due to BIS notifications on imported products, increasing costs.

    Management acknowledged

  • Revenue/Margin Impact from Hydra Inventory Depletion

    high

    Major risk of running out of Hydra inventory due to insufficient local sourcing, potentially impacting Q3/Q4 FY26 revenue and margins. INR150+ crores inventory at sale value is not enough for the whole year.

    Management acknowledged

  • Impact of UCPMP 2024 on B2B Sales (Pharmaceutical Segment)

    medium

    Restrictions on incentives to healthcare professionals impacted bulk orders and distributor engagements, leading to higher customer acquisition costs in other channels.

    Management acknowledged

  • Borosilicate Glassware Inventory Buildup

    medium

    Production capacity (25 tons/day) is 3x current sales, leading to higher inventory levels until full utilization.

    Management acknowledged

  • ROCE Moderation

    medium

    ROCE moderated to 11.5% from 15.1% due to strategic investments (new borosilicate plant, Opalware expansion) not yet at full capacity utilization and increased depreciation (INR27.1 crores).

    Management acknowledged

  • Challenging Environment for FY26 Revenue Growth

    medium

    FY26 expected to be a 'tough year' for revenue growth due to QCO/BIS issues on appliances and Hydra, potentially leading to some reduction in revenue in these categories.

    Management acknowledged

Areas of evasion (2)

  • e-commerce sales breakdown by segment
  • exact contribution of borosilicate pressware to glassware revenue

Q&A highlights

3 direct
Working Capital and Inventory Buildup due to Regulatory Issues Direct
So our working capital in these categories, our inventory has gone to 180, 210 days, maybe even 270 days in some cases, while we develop the local vendor ecosystem. And so that's a separate issue. And this number, if I remember correctly, could be as high as INR80 crores, INR90 crores, maybe even close to INR100 crores of extra inventory we are carrying because of this reason.

Reveals a significant impact of BIS/QCO regulations on inventory levels and associated carrying costs, affecting ROCE.

Asked by Resham Jain

Revenue and Margin Impact from Hydra Inventory Depletion Direct
Yes, there is an absolute issue of that... We have a major risk for running out of inventory in Hydra without having sufficient local sourcing available to supply. And that's a risk to our revenue and to our margins, absolutely. So we are working on mitigating that risk. We do have INR150-plus crores of inventory at sale value to mitigate it to some extent. But we are still not covered with the whole year's inventory.

Highlights a critical near-term risk to revenue and margins in a key growth category due to supply chain disruptions and regulatory hurdles.

Asked by Bhavin Rupani

Future Revenue Growth and Margin Rationalization Direct
I do believe in the next 2, 3 years, these numbers will rationalize and will add maybe 2%, 3%, 4% I would say 2% to 3% would be added to our EBITDA with the rationalization of these numbers over the next 2, 3 years.

Provides specific long-term margin improvement targets linked to volume growth and operational efficiency, offering a clearer picture of future profitability.

Asked by Ritesh Shah

2 min read 6 chapters

Detailed narrative

FY25 Financial Performance Overview

Borosil Limited reported a strong FY25, with revenue from operations growing 16.8% year-over-year to INR1,107.8 crores, up from INR948.5 crores in FY24. Operating EBITDA saw a 22.6% increase, reaching INR177.7 crores, and the operating EBITDA margin expanded to 16.3% from 15.4% in the previous year. Profit After Tax (PAT) for FY25 stood at INR74.2 crores, compared to INR65.9 crores in FY24, despite increased depreciation and finance costs of INR31.1 crores due to new plant commissioning.

Segmental Growth and Market Leadership

The company's growth was broad-based across its consumer divisions. The Glassware segment demonstrated exceptional performance, growing 27.2% year-over-year to INR252 crores. The Non-glassware segment, including appliances and insulated products, also performed strongly with a 17.2% increase in turnover to INR453 crores. Larah Opalware, now the number one brand in India, grew 7.3% to INR384 crores, showcasing continued market leadership and product innovation.

Strategic Investments and Capacity Expansion

Borosil commissioned a new borosilicate glass furnace at the end of FY24, expanding production capacity and reducing import dependence. Additionally, the company announced a INR40 crore investment in a new manufacturing unit for vacuum insulated stainless steel flasks through its subsidiary, Stylenest India Limited, with commercial production expected by Q4 FY26 and an estimated revenue potential of INR100 crores from this capex. Current borosilicate plant utilization is around 65-70%, with a target to reach 90-95% in the current period.

Working Capital and Regulatory Challenges

Working capital increased in FY25, primarily due to higher inventory levels for appliances and Hydra categories, impacted by BIS/QCO implementation. The company is carrying INR80-100 crores of extra inventory in these segments, leading to inventory days of 180-270 days in some cases. Management acknowledged a 'major risk' of running out of Hydra inventory without sufficient local sourcing, potentially impacting Q3/Q4 FY26 revenue and margins, though INR150+ crores of inventory is held to mitigate this.

ROCE Moderation and Future Outlook

Operating ROCE moderated to 11.5% in FY25 from 15.1% in FY24, mainly due to strategic investments in new production plants not yet operating at full capacity and an additional INR27.1 crores in depreciation. Management anticipates ROCE to rebound as assets ramp up and achieve full utilization, with the borosilicate plant expected to deliver over 24% ROCE at full capacity. The company aims to maintain a 15-20% CAGR over the next 3-4 years through 2030, despite FY26 being a 'tough year' due to regulatory issues.

Cost Rationalization and Distribution Strategy

Advertising and sales promotion expenses increased to INR86.8 crores in FY25, partly due to a pivot to e-commerce and quick commerce channels following B2B sales impact from UCPMP 2024. Management expects these costs, along with warehousing and freight, to rationalize over the next 2-3 years as volumes increase, potentially adding 2-3% to EBITDA margins. Borosil continues to expand its distribution network, currently reaching over 24,000 retail outlets, with plans for further scaling.

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