Borosil Renewables Limited — Q3 FY25 earnings call

Call held 21 Feb 2025

Management summary

Borosil Renewables reported a challenging Q3 FY25 with sales value growing only 3.6% to INR 275.28 crores and a post-tax loss of INR 8.64 crores, primarily due to severe price pressure from Chinese dumping. However, the provisional notification of antidumping duties in December 2024 and subsequent final recommendations offer significant relief, with improved pricing and profitability expected from January 2025. The company is also progressing with a 500 TPD capacity expansion and aims to reduce losses from its German operations.

Highlights

  • Standalone sales volume grew by 14% over the previous quarter.

  • Antidumping duty (ADD) on solar glass from China and Vietnam provisionally notified on Dec 4, 2024, with final findings recommending definitive duty for 5 years.

  • Improved prices expected from January 2025, moving towards INR 140 per millimeter per square meter (INR 56,000 per ton).

  • Expected EBITDA margin of ~30% at INR 56,000 per ton selling price, which management believes is sustainable.

  • New 500 TPD capacity expansion is underway, with commissioning targeted by September 2026.

Concerns

  • Total standalone sales value grew only 3.6% QoQ to INR 275.28 crores due to severe price pressure.

  • Average ex-factory prices fell to INR 105 per millimeter per square meter (INR 42,000 per ton) from INR 115 (INR 46,000 per ton) in the preceding quarter.

  • Standalone EBITDA reduced significantly to INR 20.89 crores from INR 52.88 crores QoQ.

  • Post-tax loss of INR 8.64 crores in Q3 FY25, compared to a profit of INR 12.62 crores in the previous quarter.

  • German operations incurred a negative EBITDA of INR 14.38 crores, leading to a temporary pause of hot-end operations from Dec 31, 2024.

Key financials

  1. Standalone Sales Value ₹275.28 Cr +3.6%QoQ
  2. Standalone EBITDA ₹20.89 Cr -60.5%QoQ
  3. Standalone Post-tax Loss ₹-8.64 Cr
  4. Consolidated Net Revenue ₹361.49 Cr -3.1%QoQ
  5. Consolidated EBITDA ₹5 Cr -85.5%QoQ
  6. Overseas Subsidiaries EBITDA ₹-14.38 Cr
  7. Other Income ₹15 Cr

What they filed

Q1 FY27: revenue up 17.0%, net profit up 142.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue373 361 374 347 379 +2%390 +8%440 +18%406 +17%
EBITDA29 -10 15 63 118 +307%123 +1330%136 +807%127 +102%
Net profit-13 -30 -30 -203 62 +577%100 +433%169 +663%87 +143%
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.

Capital allocation

high confidence
  • Capex Capex disclosed partially from preferential issue proceeds, balance from accruals and bank loans
    • 500 TPD furnace expansion ₹675 Cr
    So the capex on the 500 ton furnace was initially estimated at INR 675 crores. And out of that, certain amount out of these proceeds will be used for funding capex and balance will be funded from accruals and bank loans.
  • Debt 2.5× EBITDA
    Nikhil, we as a corporate policy, would not go to more than 2.5x of the debt to EBITDA. Yes, debt to EBITDA.

Guidance & targets

Pricing

  • Average Selling Price Pricing · from January 2025 · High confidence INR 140 per millimeter per square meter (INR 56,000 per ton)
    Landed prices of imported glass reflected the full value -- reflected the full impact of the duties immediately with effect from 4 December 2024. The impact of the improved prices will get reflected in the company's financial performance with effect from the beginning of January and are expected to move near the level of the reference price during the quarter. Based on the prevailing rates of exchange, this would work out to about INR140 per millimeter per square meter which would correspond to about INR56,000 per ton.

    — P.K. Kheruka

Profitability

  • EBITDA Margin Profitability · ongoing · High confidence near 30%
    And we believe that the margin at this price, even if we realize at the full INR56,000 could be near 30% or so.

    — Ashok Jain

  • German Operations EBITDA Loss Reduction Profitability · ongoing · High confidence INR 4 crores per month

    From INR 8 crores per month today

    The current losses which were happening at Germany at EBITDA level were close to INR8 crores per month. Okay? And this we propose to bring down to less than half by virtue of this step what we have taken by way of short-time work and shutting down the furnace operation. We expect the EBITDA level loss to come down to almost INR4 crores per month from INR8 crores.

    — Ashok Jain

Revenue

  • Indian Operations Revenue Increase Revenue · ongoing · High confidence INR 60 crores per quarter
    Sorry. It should go by another INR60 crores or so per quarter.

    — Ashok Jain

Cost Reduction

  • Captive Power Savings Cost Reduction · from July / September '25 · High confidence INR 17 crores per annum
    So we will basically be saving almost the same amount of capex what we incur, which is about INR17 crores per annum is what we'll save out of this... which will again bring down the cost of power for us going forward from July / September '25.

    — Ashok Jain

Capacity

  • New 500 TPD Facility Commissioning Capacity · by September 2026 · High confidence operational
    We expect to commission the new facility by September 2026.

    — P.K. Kheruka

Debt

  • Net Debt to EBITDA Ratio Debt · ongoing · High confidence not to exceed 2.5x
    Nikhil, we as a corporate policy, would not go to more than 2.5x of the debt to EBITDA. Yes, debt to EBITDA.

    — Ashok Jain

What to watch in Q4 FY25

Final Antidumping Duty approval

By beginning of May 2025
Current DGTR final findings published, forwarded to Finance Ministry
Target Final notification by Finance Ministry

Why it matters

Crucial for sustained profitability improvement in Indian operations.

generally the time which finance ministry takes in extreme cases is 3 months from the date of submission of final recommendation by the DGTR. So from that perspective, we should expect this decision to be in the beginning of May, at the most at the latest.

Risks & concerns

  • German operations losses due to political uncertainty and lack of demand

    high

    German plant facing significant losses due to lack of demand from module manufacturers and political crisis delaying policy decisions, leading to temporary pause of hot-end operations.

    Management acknowledged

  • Continued Chinese dumping via indirect routes (e.g., Malaysia)

    medium

    Chinese manufacturers might try to bypass AD duty through other countries, but management believes this won't be a significant problem due to market dynamics.

    Analyst downplayed

  • Delay in final approval of Antidumping Duty by Finance Ministry

    medium

    While DGTR has recommended, final approval from the Finance Ministry is pending, which could take up to 3 months, expected by May 2025.

    Analyst acknowledged

Q&A highlights

7 direct
Capex funding and rights issue cancellation Direct
the right issue has already been withdrawn, so there is nothing in the right issue now. Whatever right issue, INR450 crores was there, it is gone now. It's withdrawn already.

Clarifies the company's funding strategy for the 500 TPD capex, explaining the shift from a rights issue to a preferential issue and the reason for the rights issue withdrawal.

Asked by Sunny from IFA

Chinese dumping via Malaysia Partial
what we feel is that all the exports cannot come from Malaysia, first of all. And all the customers are not in a position to get material from Malaysia... So we expect certain pushback from the customers who would potentially be importing from Malaysia, but we have more customers to sell our goods to. So it should not be a problem.

Addresses a potential loophole in AD duties, indicating management's view that it won't be a significant issue due to market dynamics and customer relationships.

Asked by Sunny from IFA

Timeline for final AD duty approval Direct
generally the time which finance ministry takes in extreme cases is 3 months from the date of submission of final recommendation by the DGTR. So from that perspective, we should expect this decision to be in the beginning of May, at the most at the latest.

Provides a clear timeline for the crucial final approval of the antidumping duty, which is expected to significantly improve profitability.

Asked by Sunny from IFA

Sustainability of 30% EBITDA margin Direct
Absolutely, yes.

Confirms management's confidence in achieving and sustaining a 30% EBITDA margin once the target selling prices are realized, indicating strong profitability potential.

Asked by Bajrang Bafna from Sunidhi Securities

Further capex plans given demand Direct
I would say yes, definitely because you see when the antidumping duty came, there was only 1 gigawatt of production in the country. And within 5 years, within 4 years, we had 17 gigawatts. So I feel that there is a lot of enthusiasm amongst the manufacturers and the investors also. So people will join their resources, and they will definitely come up with the capacity. I personally don't see any reason why it will not come up.

Indicates management's long-term view on capacity expansion beyond the current 500 TPD, driven by market demand and industry enthusiasm post-AD duty.

Asked by Bajrang Bafna from Sunidhi Securities

German subsidiary losses and outlook Direct
The current losses which were happening at Germany at EBITDA level were close to INR8 crores per month... we expect the EBITDA level loss to come down to almost INR4 crores per month from INR8 crores.

Provides specific figures for the losses in German operations and management's target for reducing them, which is critical for consolidated profitability.

Asked by Saket Kapoor from Kapoor Company

Impact of AD duty on revenue and profitability Direct
Yes, please. Your understanding is correct, it will translate to the profitability, profit at EBITDA level, yes.

Clarifies the direct and significant positive impact of the AD duty on the company's profitability, as the increased revenue from higher prices is expected to flow directly to EBITDA.

Asked by Saket Kapoor from Kapoor Company

Current utilization levels Direct
We are running at a production rate of about 950 tons against our 1,000 ton capacity, and we are trying to ramp up production even more.

Provides insight into the current operational efficiency and potential for further improvement in production volume.

Asked by Saket Kapoor from Kapoor Company

3 min read 5 chapters

Detailed narrative

Q3 FY25 Performance Impacted by Price Erosion and German Losses

Borosil Renewables reported a challenging Q3 FY25, with standalone sales volume growing 14% QoQ but value increasing only 3.6% to INR 275.28 crores. This was primarily due to a steep decline in average ex-factory prices to INR 105 per millimeter per square meter (INR 42,000 per ton) from INR 115 (INR 46,000 per ton) in the preceding quarter, driven by increased Chinese dumping. Consequently, standalone EBITDA reduced significantly to INR 20.89 crores from INR 52.88 crores QoQ, leading to a post-tax loss of INR 8.64 crores. Consolidated results also reflected this pressure, with net revenue at INR 361.49 crores and EBITDA at INR 5.0 crores, further impacted by a negative EBITDA of INR 14.38 crores from overseas subsidiaries.

Antidumping Duty Offers Significant Relief and Improved Outlook

A major positive development was the provisional antidumping duty (ADD) notification on solar glass imports from China and Vietnam on December 4, 2024. The DGTR has since issued final findings recommending a definitive ADD for 5 years. Management expects this measure to restore fair competition, with improved prices reflecting from January 2025, moving towards INR 140 per millimeter per square meter (INR 56,000 per ton). This price realization is projected to increase standalone revenue by approximately INR 60 crores per quarter and lead to a sustainable EBITDA margin of around 30%. Final approval from the Finance Ministry is anticipated by May 2025.

Strategic Capacity Expansion and Market Demand

The company is proceeding with its expansion plans, including a new 500 tons per day (TPD) furnace with an initial estimated capex of INR 675 crores, expected to be commissioned by September 2026. This expansion is supported by the proceeds from a recent preferential issue of INR 517.66 crores. Management highlighted the buoyant demand for solar glass, with India's module manufacturing capacity expected to double to 150 gigawatts in 2-3 years and solar installations projected to rise to 40-50 gigawatts annually. The company's own capacity, including the new expansion, is set to reach 41.25 gigawatts or 6,300 tons per day.

Addressing German Operations Challenges

The German subsidiary faced significant challenges, reporting a negative EBITDA of INR 14.38 crores in Q3 FY25. Due to political uncertainty and a lack of demand from local module manufacturers, the hot-end operations were temporarily paused from December 31, 2024. Management is implementing measures, including short-time work for employees, to minimize losses and expects to reduce the EBITDA loss from approximately INR 8 crores per month to INR 4 crores per month. The company remains optimistic about the long-term prospects in Germany, anticipating policy support for domestic manufacturing post-elections.

Focus on Cost Efficiency and Capital Structure

Borosil Renewables is actively pursuing cost efficiencies, including the planned installation of a 16.5 MW solar/wind hybrid captive power plant. This initiative is expected to generate annual savings of INR 17 crores and become operational by July/September 2025, further improving margins. Regarding capital structure, the company adheres to a policy of maintaining net debt to EBITDA below 2.5x. The recent preferential issue, which raised INR 517.66 crores, will be utilized for funding the ongoing capex, with the balance to be met through internal accruals and bank loans.

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