Borosil — Q4 FY26 earnings call

• Vacuum-insulated stainless steel flask manufacturing facility ₹65 Cr
• 20-megawatt ground-mounted solar plant with battery energy storage system ₹75 Cr
• Furnace capacity expansion (25 to 32 tonnes/day) ₹50 Cr
• Glassware manufacturing at Bharuch (drinking glasses, storage jars, jugs, bottles) ₹42 Cr
• Maintenance capex ₹20 Cr

As you may be aware, we had announced last year on April 2nd that we were going to set up a manufacturing unit for vacuum-insulated stainless steel flasks at a cost of INR65 crores. I'm happy to say that the commercial production from the first 2 lines is expected to commence in the next few days before the end of Q1 FY27, and the third line is expected to commence by the end of Q2 FY27. The plant is completely ready and the trial production period will begin very, very shortly. In addition to that, on the marketing front, Borosil Limited was awarded a Jury Recommendation at the inaugural Economic Times Award for Design & Creativity in the Most Creative Packaging Re-Design category. The revamp focused on creating stronger shelf impact, clarity and a contemporary brand presence across all customer touch points. In addition to marketing, the company's manufacturing facility was also awarded at the India Green Manufacturing Challenge 2025 by the International Research Institute for Manufacturing. The award reflects the strength of our process optimization initiatives and reinforces our focus on integrating sustainability with long-term operational and cost efficiency. Coming to the HR front, Borosil Limited has continued to be certified as a Great Place to Work, reflecting its commitment to fostering a positive workplace culture, a high-trust work environment and strong employee satisfaction across its operations. This recognition underscores the company's continued focus on prioritizing its workforce and building a collaborative and rewarding organizational culture. On the balance sheet side, ICRA rating has reaffirmed our credit ratings to AA- with a stable outlook for the long-term facility, and A1+ for the short-term facility. This strong investment-grade profile reflects the company's solid liquidity and resilient operational positioning. Coming back to marketing, to deepen consumer engagement and cultural relevance, the company also conceptualized and launched Borosil Kitchen Connection. This is a distinctive content-led property that revamps celebrity kitchens while extending participation opportunities to consumers. By showcasing the Borosil product ecosystem within real celebrity homes through authentic storytelling, the initiative is building stronger resonance, relatability and aspirational brand affinity among modern Indian households. So now moving on to the financial performance. I would like to say that Borosil has delivered a reasonable performance in FY26 with revenue from operations reaching INR1,195.9 crores, up from INR1,107.8 crores during the last year. This represents an 8% year-over-year growth. This growth, if we look at it from a product category perspective, although we don't share numbers at every level, is impacted substantially, owing to the challenges that we have faced throughout the year in our key category that is Hydra, the vacuum-insulated stainless steel flask bottles and containers. The quality control BIS order was implemented in the financial year 2025, and the resultant supply chain challenges^🌐 have impacted the company's financial performance, both in terms of revenue and margins, and have significantly even impacted our share presence in this category. In FY26, the company achieved an operating EBITDA before exceptional and one-time^📎 income of INR176.7 crores as against INR177.7 crores in FY25, which is basically flat for the year. And in fact, the operating EBITDA margin has reduced from 16.3% the year before, to 15.1% in this year. As I've mentioned before, the main challenge has been the lower sales of Hydra without, let's say, reverse operating leverage, which has impacted us in this particular year, thanks to the supply chain challenges^🌐 for Hydra. During the quarter ended March 31, 2026, the production activities at the company's borosilicate glass furnace for pressware products and its opal glass furnace located in Jaipur were also impacted temporarily due to the restrictions in supply of LPG arising from a force majeure^🌐 situation caused by the West Asia crisis and its consequent impact on global fuel supply. Consequently, the operations and financial performance of the company for the quarter were impacted to that extent. Coming to other operating income, that is INR26 crores, which is coming from shared service support income, compared to INR18.4 crores in FY25, with the related expenses reflecting on total expenses. As a result of that, profit before tax for the period was INR100.9 crores compared to INR103.2 crores in the previous year. FY26 includes a few one-time^📎 items, including expenses related to the demerger of INR7.2 crores. Also -- which is actually a reversal sorry, it's a reversal of the expense of the demerger of INR7.2 crores, but on the flipside, a one-time^📎 expense of INR1.8 crores for professional fees as well as income from investments of INR4.3 crores and royalty income of INR12 crores. Sorry for the -- lots of numbers there, but this will all be available when the print-out is shared. Compared to this, last year, the company has recognized one-time^📎 income on account of transfer of tenancy rights of INR13.5 crores and income from investments of INR5.9 crores. The depreciation this year increased by INR5.8 crores, while finance costs declined by INR6.2 crores primarily due to debt repayment in FY26 as compared to last year. There was also another impact going to the new gratuity and leave provision amounts on account of the new Labor Code, and that is about INR4.0 crores, which is shown as an exceptional item^📎 in this financial year '26. As a result of all of that, profit after tax rose marginally from INR74.2 crores in FY25 to INR74.7 crores in FY26. During the financial year '26, the company generated cash from operations of approximately INR119 crores. As of the end of 31st March '26, at the consolidated level, Borosil Limited maintained a strong balance sheet with a net debt position of INR49.7 crores. I mean, to the -- all the points listed above were with respect to the entire financial year. Now we'll come to the section on quarterly performance. The company has achieved operating revenues of INR284.1 crores in Q4 FY26 as against INR270.2 crores, which is a growth of 5.2%. This is also the slowest quarter for most consumer business across India, and that's reflected in this quarter as well. The EBITDA margin before exceptional and onetime items was 11.5% in Q4 FY26, as against 14.2% in Q4 FY25. And PAT was INR10.6 crores this year in the quarter 4 as against INR11.1 crores in the year before. So let's take a closer look now at our category-wise performance for the full year FY26. Borosil's consumer sales continue to grow across both glassware and non-glassware segments, barring the Hydra impact as well as our opalware range also grew under the Larah brand. The Larah opalware segment recorded a sale of INR411.9 crores in FY26, compared to INR383.8 crores in FY25, which is a growth of 7.3%. In our glassware segment, which includes borosilicate microwavable products, serving ware, glass tumblers, lunchboxes, we recorded a year-over-year growth of 17.3% in FY26. Revenue stood at INR295.5 crores compared to INR252 crores in FY25. Non-glassware segment, which encompasses a wide range of small home appliances, insulated bottles and flasks, cookware and other kitchen essentials, posted a 2.4% increase in revenue, with the turnover reaching INR463.7 crores in FY26 compared to INR452.9 crores in FY25. As already mentioned, the Hydra bottle sales has come under substantial pressure owing to the nonavailability of product, owing to the BIS or the QCO implementation. Our team has recognized these headwinds and is actively reshaping overall strategy to impact - to mitigate the impact, and as a result of this, we had already as mentioned before, we had approved the project for our upcoming manufacturing facility through our wholly-owned subsidiary, Stylenest India Limited, and this project includes 3 double-wall production lines. And as I mentioned before^🔁, 2 of these lines will be having commercial production by end of next month, and the third one by end of Q2 FY27. This investment is being financed through mix of equity, debt and internal accruals. This expansion does reinforce our commitment to Make in India and will also in the medium to long run enhance cost efficiency, ensure compliance with BIS and strengthen our supply chain, which can deal with issues such as the West Asia prices more effectively. During the last year, FY26, the company did strengthen its focus on cost discipline to improve operating efficiency. Expenditure on advertising and sales promotion remained controlled with a marginal increase from approximately INR87 crores to approximately INR88 crores. Power and fuel costs saw sharp reduction falling from INR82.4 crores to INR78 crores. The reason I'm saying that sharp is that in spite of the high cost increases per unit, which got impacted in the last quarter. The company is further investing INR75 crores towards setting up a 20-megawatt ground-mounted solar plant with a battery energy storage system, which will further reduce the overall power cost, and the same is expected to be commissioned in this quarter, Q1 FY27. The Phase III implementation of solar, which is added to the first 2 cases, will then take care of about 61% of the overall power requirements of the company. In May 2025, the Government of India notified the Safety of Household, Commercial and Similar Electrical Appliances Quality Control Order 2025, making a significant step towards enhancing consumer safety, quality assurance and market regulation. Earlier, effective 19 March 2026, this order mandates, BIS certification for a broad range of electrical appliances, including coffeemakers and cooking ranges, hobs, others and similar appliances. Recently, in QCO 2026, the remediation time lines have been extended to 1st October 2026 from its trial date, I think, sometime in March. Accordingly, the company has built up advanced inventory to mitigate potential sales reductions as non-certified products will not be permitted for sale in India beyond the prescribed time lines. However, I don't think this QIS or the QCO rather will have as much of an impact or any impact compared to Hydra because the company is very well placed to switch from imports to local sourcing for these product categories. Between FY18 and FY26, the company has delivered strong and consistent growth with the revenues recording a CAGR of 21.4% and EBITDA expanding at a faster 29.4%, that's over a period of 8 years. This reflects operating leverage and improved profitability. Since the acquisition of Larah in 2016, revenues there increased from INR48 crores to INR412 crores in FY26, translating into a 24% CAGR. In parallel, the non-glassware portfolio has scaled from INR23 crores in FY17 to INR464 crores in FY26, achieving 39.6% CAGR. Both of these points underscore the company's ability to successfully grow into new product areas and create long-term value. India's shift from plastic to glass is not just a material transition but a meaningful behavioral change driven by rising health awareness and evolving lifestyles. Consumers today are increasingly cautious about chemical leaching, hygiene, stains and orders associated with plastics, especially for daily food consumption outside the home. As a result, glass, particularly borosilicate glass is becoming the preferred choice for office lunches, travel, fitness-led routines and modern kitchens due to its safety, nonreactive properties and hygiene benefits. In this evolving category, Borosil is well positioned given its strong brand trust, glass expertise and products specifically designed for everyday Indian usage. A cornerstone of Borosil's long-term strategy is its strong Make in India commitment in addition to operating opalware furnaces of 84 tonnes per day and a 25-tonne per day borosilicate glassware plant. We are now starting a new facility for vacuum-insulated stainless steel bottles, flasks and containers, and also expansion of our injection molding operations for the plastic lids that go on our lunchboxes. Last year, in the last quarter, the Board also approved 2 further expansion projects. One is to expand our furnace capacity from 25 tonnes per day to 32 tonnes per day with the addition of a third forming line, and this will likely happen in the year '27 or '28, depending on when the furnace life is over. The cost of this capex is roughly INR50 crores, and this will help company remove capacity bottlenecks and will improve -- further improve operating efficiencies. It will also help further improve product diversification and portfolio expansion. The second capex was the glassware manufacturing at Bharuch where the company will produce, through its outsourced vendor, drinking glasses, glass storage jars, jugs and bottles. That is from the Borosil Scientific's Bharuch plant. The company is looking at a high growth potential in these categories, and we expect this facility to be commenced by the end of Q3 FY27 with a capex of approximately INR42 crores. Borosil's strong omnichannel presence spanning all the channels, including trade, retail, modern retail, e-commerce and B2B have driven deeper market penetration with availability of over 24,000 retail outlets, we have built a well-diversified revenue base, serving more urban consumers and global markets. I remain very bullish on the organizational capabilities. Last year was a tougher year on account of the impact of supply chain from Hydra and then the last quarter, the West Asia crisis further enhanced that challenge. However, these are short-term issues, and we expect fully that our long-term growth trajectory as well as from a revenue perspective as well as from operating profit perspective will continue unabated as it has for the last 8 to 9 years. With that, I'd like to now open the floor to questions that you may have. So capex, these 2 capex, which I already said earlier, is about INR90 plus crores. There's maintenance capex of roughly INR20 crores, INR25 crores a year, which should continue. And then there are no -- I mean, there was many capex under discussion, so nothing further which is approved although we can see in the non-glassware space more capex potential on the horizon, which can be reasonable sized because we see pretty -- and I like to mention even potentially in appliances because we see very good market prospects in the future in the non-glassware space as well. So I can only share that once it's approved by the Board, but at the moment, I can only say that there's quite a lot under discussion. And obviously, in the short term, things have been a bit unstable, but we do expect this to improve. So we will certainly do more capex in the future. So for FY27, the capex number would be around INR110 crores. Is that correct? Yes. INR110 crores I mean, broadly, yes. Yes, broadly. It can go maybe it can go up depending on more projects through the year. But at the moment, yes, that's correct.

As of the end of 31st March '26, at the consolidated level, Borosil Limited maintained a strong balance sheet with a net debt position of INR49.7 crores.

During the financial year '26, the company generated cash from operations of approximately INR119 crores.