Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Borosil Ltd (BOM:543212, Financial) reported a strong year-over-year revenue growth of 19.4% for H1 FY25, reaching INR 490.7 crores.
- The company achieved an operating EBITDA of INR 82.2 crores in H1 FY25, up from INR 62 crores in H1 FY24, reflecting improved operational efficiency.
- The operating EBITDA margin increased to 16.8% in H1 FY25 from 15.1% in the same period last year.
- Borosil Ltd successfully raised INR 150 crores through QIP to repay long-term project loans and working capital loans, improving its financial position.
- The company's long-term credit rating was upgraded to AA- (stable) by ICRA, indicating a healthy improvement in its credit profile.
Negative Points
- Depreciation and finance costs increased by approximately INR 19.84 crores due to the commissioning of a new borosilicate glass furnace.
- The discontinuation of indexation benefits on long-term capital assets led to a reversal of deferred tax credit, impacting profit after tax by INR 1.36 crores.
- Gross margins were affected by a change in product mix, particularly due to increased sales of lower-margin lunch boxes.
- Higher advertising and promotion expenses were incurred due to the preponement of the Diwali festival, impacting short-term profitability.
- The company faces potential challenges in maintaining growth momentum due to cautious consumer sentiment and market cycles.
Q & A Highlights
Q: What is the current capacity utilization for Borosil's opalware division, and do you expect to reach full capacity soon?
A: We are currently at about 65% capacity utilization. We expect to reach full capacity within the next two years, as initially projected over three years. (Unidentified_5)
Q: Can you explain the reason for the change in gross margins this quarter?
A: The change in gross margins is primarily due to the product mix. We have not taken any price cuts. The increase in sales of lower-margin products like lunch boxes has impacted the overall margin. (Unidentified_5)
Q: Are there any plans for capacity expansion in Gujarat, as reported in some news outlets?
A: Currently, we do not have any such plans. If there are any developments, they will be approved by the board and communicated appropriately. (Unidentified_7)
Q: How is the company managing the transition from imports to domestic sourcing under the BIS implementation?
A: We have imported enough inventories and have open sourcing arrangements to transition smoothly from imports to domestic sourcing. (Unidentified_5)
Q: What is the expected CapEx for this year, and how is it allocated?
A: The estimated CapEx for this year is about INR 100 crores, with allocations for the solar project, furnace rebuilds, and de-bottlenecking to increase production. (Unidentified_7)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
