Release Date: February 17, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Borosil Renewables Ltd (BOM:502219, Financial) experienced a 14% increase in sales volume during the third quarter compared to the previous quarter.
- The company is optimistic about the imposition of anti-dumping duties on solar glass imports from China and Vietnam, which is expected to restore fair competition.
- There is a significant demand for solar glass, with solar module manufacturing capacity expected to double to 150 gigawatts in the next two to three years.
- The company has plans to expand its production capacity by 3.25 gigawatts, contributing to a total capacity of 41.25 gigawatts by 2026.
- Borosil Renewables Ltd (BOM:502219) has received in-principle approvals for a preferential issue, raising INR517.66 crore to fund expansion projects.
Negative Points
- The company faced a decline in EBITDA, posting a post-tax loss of INR8.64 crore in the third quarter compared to a profit in the previous quarter.
- Increased Chinese dumping led to a steep decline in average ex-factory prices, impacting revenue growth.
- Export sales decreased significantly, accounting for only 6% of turnover in the third quarter compared to 13% in the previous quarter.
- The German subsidiary faced challenges due to a lack of demand, leading to a temporary pause in hot-end operations and a reduction in workforce.
- The company incurred additional expenses related to non-routine repairs and rights issue, further impacting EBITDA.
Q & A Highlights
Q: What is the CapEx outlook for the 500-tonne furnace, and how will it be funded?
A: Ashok Jain, Whole-Time Director, stated that the CapEx for the 500-tonne furnace is estimated at INR675 crore. The funds raised will partially cover this, with the remainder funded through accruals and bank loans.
Q: Why was the rights issue canceled in favor of a preferential issue?
A: Ashok Jain explained that the rights issue was withdrawn because they were approached by investors for a larger preferential issue, coinciding with the anti-dumping duty announcement. The stock exchange required the rights issue to be withdrawn to proceed with the preferential issue.
Q: Is there a risk of Chinese manufacturers bypassing the anti-dumping duty through other countries like Malaysia?
A: Ashok Jain acknowledged that while imports from Malaysia might increase, it is unlikely to fully replace Chinese imports. The Malaysian company is also likely to raise prices, reducing the risk of significant dumping.
Q: What is the expected timeline for the Finance Ministry to approve the anti-dumping duty?
A: Ashok Jain mentioned that the Finance Ministry typically takes up to three months to make a decision, so a resolution is expected by early May.
Q: How will the anti-dumping duty impact Borosil's financials?
A: Ashok Jain indicated that the improved selling prices due to the anti-dumping duty could lead to a 30% EBITDA margin, assuming prices reach INR56,000 per tonne.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
