Borosil Limited (BOROLTD.NS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to Borosil Q2 FY '26 Earnings Conference Call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Manan Goyal from ICICI Securities. Thank you and over to you, sir.

Thank you, Nitesh. On behalf of ICICI Securities, we welcome you all to Q2 FY '26 Result Conference Call of Borosil Limited. We have with us today senior management represented by Mr. Shreevar Kheruka, Managing Director and CEO; Mr. Rajesh Kumar Chaudhary, Whole-Time Director; Mr. Anand Sultania, CFO; Mr. Rituraj Sharma, President, Consumer Products; and Mr. Balesh Talapady, Vice President, Investor Relations. Now I hand over the call to the management for initial comments on the quarterly performance. Then we will open the floor for Q&A session. Thank you and over to you, Shreevar, sir.

So thank you to ICICI Securities for arranging this call. Good afternoon to every one of you. The Borosil team is delighted to be communicating with you once again. I'm pleased to inform you all that Borosil Limited's Board has approved the financial results for Q2 and H1 FY '26 during our meeting on 7th November 2025. We have submitted our results and an updated presentation to the stock exchanges and they're also available on the company's website for your review. I'm pleased to share that Borosil Limited delivered an impressive performance in H1 FY '26 with consolidated revenues from operations at INR 573 crores compared to INR 499.5 crores in the same period last year. This translates to a 14.7% year-on-year growth. Despite a challenging Q1, this half yearly growth highlights the resilience of our business model, very strong execution capabilities and the continued trust of our customers as well as the hard work of our employees. In order to just highlight 1 point. We do realize that Diwali this year is earlier than the prior period and therefore, the comparison to last year is not exactly like-to-like. In H1 FY '26, the company recorded an operating EBITDA before investment income and onetime income of INR 90.1 crores compared to INR 82.2 crores in H1 FY '25 marking a 9.5% Y-over-Y increase. This improvement reflects our continued emphasis on operational efficiency and sustainable growth. The operating EBITDA margin was slightly lower at 16.1% compared to 16.8% in the previous year. Other operating income for the first half of '26 includes INR 12.1 crores from shared service support income compared to INR 8.4 crores in the same period last year with the related expenses reflected under total expenses. Our PBT for the period was INR 53.9 crores, up from INR 38.8 crores in the previous year. H1 FY '26 includes a onetime stamp duty expense provision reversal relating to demerger of INR 7.2 crores, which is shown under the head other income, and also includes onetime expenses of INR 1.8 crores towards professional fees for assignment. The net impact of onetime items is INR 5.4 crores. During the same period, depreciation increased by INR 4.3 crores while finance costs declined by INR 5.2 crores primarily due to debt repayment. As a result, PAT rose from INR 27.6 crores in H1 FY '25 to INR 40.1 crores in H1 FY '26 reflecting a strong 45% year-over-year growth. As on 30th September '25, Borosil Limited had a net debt of INR 4.5 crores. So now let's take a look into the categorized performance behind the numbers for H1 FY '26. Our Consumer division continued to grow across both glassware and non-glassware segments under the Borosil brand alongside our Opalware range under the Larah brand. Coming to Larah first. The Larah Opalware segment recorded sales of INR 195.4 crores in H1 FY '26 compared to INR 181.3 crores in the same period last year, which is a growth of 7.8% Y-o-Y. In our glassware segment; which includes microwavables, serving ware, glass tumblers, lunch boxes and storage solutions; we recorded an impressive Y-o-Y growth of 27.4% in H1 FY '26. Revenue stood at INR 148.6 crores compared to INR 116.7 crores in H1 FY '25 reflecting our demand across key product categories. The non-glassware segment; encompassing a wide range of small home appliances, insulated bottles and flasks, cookware and other kitchen essentials; performed strongly posting a 12.4% increase in revenue. Turnover for this segment reached INR 216.6 crores in H1 FY '26 compared to INR 192.8 crores in the corresponding period last year. BIS compliance requirements affected our hydra bottle sales as some of the channels are only accepting BIS certified steel products. Our team has recognized these headwinds and is actively reshaping the overall strategy to mitigate the impact. It is pertinent to note that the growth in non-glassware was in spite of a substantial degrowth in the category of hydra. As a part of this, during the quarter, our Board approved a revised project scope for our upcoming manufacturing facility in Rajasthan through our wholly owned subsidiary, Stylenest India Limited. The project will now include 3 double-wall production lines for vacuum insulated steel flasks, bottles and containers with an estimated capacity of 3.6 million units per year and with an estimated CapEx of INR 65 crores. Estimated commercial production dates for 2 double wall lines is by the end of this financial year that's Q4 FY '26 and for the third double wall line by the end of Q1 FY '27 subject to receipt of necessary approvals. This INR 65 crore investment will be financed through a mix of equity, debt and internal accruals. The expansion reinforces our commitment to Make in India and will enhance our compliance, that is BIS compliance, and strengthens our supply chain resilience by reducing dependence on imports. Alongside a strong revenue performance, H1 FY '26 saw the company implement several cost control initiatives to enhance operating efficiency. We will continue to keep a close watch on expenses, particularly advertising and sales promotion, which remained at INR 38.4 crores in H1 FY '25, which was approximately the same as the same period last year. In addition, power and fuel costs declined from INR 42.3 crores to INR 36.9 crores over the same period reflecting our continued focus on prudent cost management. We were also honored to be named the Most Trusted Customer Service Provider in the Consumer Appliances Sector at the India CX Summit & Awards 2025 by Synnex Group. This recognition proves our unwavering commitment to customer satisfaction and our focus on delivering experiences that embody the same quality and reliability as our products. Between FY '18 and FY '25, our revenues have been growing at a CAGR of 23.5% while EBITDA expanded at a 34.3% CAGR. Since acquiring Larah in 2016, its revenues have risen from INR 48 crores to INR 384 crores in FY '25 delivering a 26% CAGR. Likewise, our non-glassware portfolio has grown from INR 23 crores in FY '17 to INR 453 crores in FY '25 reflecting an exceptional 45% CAGR, which shows clear evidence of our ability to deliver sustained growth and value creation. We remain focused on the long term and the outlook for our categories is strong. India's per capita GDP has risen from about INR 1.1 lakh in FY '22 to nearly INR 1.4 lakh projected for FY '26 with per capita consumption expected to approach $4,000. As incomes rise, spending on lifestyle and home products grows and with our premium yet accessible positioning, Borosil is well placed to capture this expanding demand. India's brown goods market, which includes kitchen and home appliances, is expanding rapidly. Valued at about $5 billion in FY '24, it's projected to reach $9 billion by FY '30 growing around 10% annually. This surge is led by rising demand for kitchen-focused appliances like oven toaster grills, choppers, mixers and sandwich makers; categories that align well with evolving consumer preference for convenience, efficiency and modern design. In recent years, India has seen a clear shift towards health and sustainability creating strong tailwinds for Borosil. The $50 billion health and wellness market is projected to reach $90 billion by FY '30, also growing at 10% CAGR. Consumers are moving towards toxin-free durable materials and away from plastic due to rising health concerns, regulatory bans as well as sustainability concerns. This shift squarely aligns with Borosil's focus on safe eco-friendly products, which include glassware, steel and Opalware. We see strong potential in INR 4,000 crore lunch box market where consumers are increasingly seeking safer microwave friendly and sustainable options. This is where Borosil stands apart. Our premium glass lunch boxes combine durability, leak-proof design and microwave compatibility in a stylish long-lasting product, one that has become a substantial part of our portfolio. A key pillar of Borosil's long-term growth strategy is our strong commitment to Make in India. We operate one of India's largest Opalware capacities at 84 tonnes per day along with a 25 tonnes per day borosilicate glassware plant that we commissioned last year. Building on this foundation, we are now expanding our manufacturing footprint to a new facility dedicated to producing vacuum insulated stainless steel bottles, flasks and containers. Borosil is leading India's move towards healthier eco-friendly kitchens by replacing plastic with microwaveable safe, BPA-free glass and sustainable steel products. As rising incomes and health awareness drive the shift, we are steadily converting plastic users to glassware and Opalware. Through aspirational designs, educational marketing and a focus on hygiene and elegance, Borosil is redefining the modern Indian kitchen. Our strong omnichannel presence across general trade, modern retail, top e-commerce platforms and expanding B2B and export networks has driven deeper market penetration. With availability in over 24,000 retail outlets, we built a well-diversified revenue base that reaches both urban consumers and rural users. In summary, Borosil's strong brand equity, diversified portfolio, expanding manufacturing base and omnichannel presence position us well for sustainable growth. With that, I thank you and I would be happy to take your questions.

[Operator Instructions] The first question is from the line of Naitik from NV Alpha Fund.

Congrats on a good set of numbers. Sir, my first question is if I look at your 3-, 4-year period, we have spent almost INR 500 crores, INR 550 crores of CapEx. So I just wanted to know the breakup of this CapEx and what sort of peak revenue potential do we see from the CapEx that we have spent already in the past 3-odd years?

Okay. Well, I think I had shared this breakup in the past. Offhand I don't have exact numbers for you. But broadly, most of the CapEx has been spent for expansion of our Opalware glass. We added a second Opalware furnace. We added a borosilicate glass furnace, the first one of its type in India. We've done large solar projects to reduce cost of power and fuel or at least power and various upgradations in our Jaipur plant. We've put in a lot of new capacity there so both upstream and downstream. So I would say that's most of the CapEx. But specific, I think you'll have to go back to some previous conversations such as this and find it, you will definitely find specific numbers.

Sure, sir. No problem. So sir, just wanted to ask what sort of peak revenues do we expect we could do from the CapEx that we have done in the past, including the INR 60 crores, INR 65 crores of the insulated bottles that we are putting up?

Yes. So look, peak revenue is -- you see our revenue is not dependent only on our CapEx. We also buy products from third-party vendors. So I mean I can say that the peak revenue from this CapEx including the flask will be over INR 1,000 crores. But that doesn't mean -- I mean we're already more than INR 1,000 crores of revenue. That's because we also buy products from outside. So I would say that you have to take peak revenue with a little -- it's only from this CapEx not including availability of products from third-party vendors.

Right. So this INR 550 crores, INR 600-odd crores including flask can give us INR 100 crores. That's what I want to understand. I'm talking about this INR 550 crores, how much revenue can this INR 550 crores, INR 600 odd crores…

Maybe INR 900 crores to INR 1000 crores.

Got it. And sir, along with this, after the INR 65 crores CapEx that we do for the bottles, the peak of the CapEx cycle is behind us or we do plan on some CapEx going forward also?

No. You see our sales have been growing well. And I think the way it looks from the government's perspective is that we are making it more and more attractive to Make in India and because of that, we will be doing a lot more CapEx in the future for sure in maybe different segments because even our non-glassware segment's picked up a lot. So there is scope to do more CapEx there. But nothing is finalized here, but I'm sure we'll be doing more and more CapEx because we see reasonable growth opportunities ahead in those segments.

Got it, sir. Sir, my last question, if you could provide us the amount of utilization that we are currently at in glassware and Opalware?

I would say Opalware like 90% plus and glassware around 80%.

The next question is from the line of Pranay Roop Chatterjee from Burman Capital Management.

My first question is on the margins. I was just slightly confused. If I look at it quarter-on-quarter and Y-o-Y; number one, your revenue is much stronger. As you called out, you said Diwali was earlier so that would have positive impact on our revenue so revenue is higher. And I'm seeing that the mix is also favorable, right? Because both Opalware and consumer glassware have done better than your non-glassware and non-glassware is where it's mostly traded, right? So my question is is this a single factor or a combination of factors that you would like to call out, which have depressed margins in this quarter?

Yes. So basically there's 2 reasons for reduction in margin. One is that in the non-glassware segment, we've had to start moving substantial volumes from made abroad to made in India and in the short run, the vendor ecosystem in India is not as efficient as the vendor ecosystem overseas. It will take time because in overseas, these vendors have been making products for the last 20, 30 years and Indian production has just started. So in the short run definitely there's pressure on gross margins in the non-glassware segment, which is why I would say the main contributor. The second thing is in the non-glassware itself, we lost a reasonable amount of revenue on this hydra product category, which was higher margin. So the product mix also has hurt us in non-glassware. So most of this revenue contraction or rather margins -- I mean it's not a big contraction, frankly, but it's still there; is coming from, I would say, temporary factors relating to adjustments in supply chain owing to more difficulties in imports and moving to India sourcing. I would say that these are short term probably in the next 12 to 18 months this factor will play out. And as you rightly mentioned, the benefit from higher sales of our own manufactured goods, which was actually quite substantial, but hasn't shown in the numbers this year. If it was like-to-like, then you'd see, I would say, a 2%, 3% improvement in our overall EBITDA numbers percentage-wise.

Got it. So just in case you are willing to answer this question. So in non-glass, which blended EBITDA margin is probably steady state high single digit probably when you are purely sourcing, would that be below breakeven, above breakeven, low single digit, any indication?

Yes. It's gone from high single digit to mid-single digit more or less so there's been a substantial reduction there. Of course it's definitely beyond breakeven and, like I said, it's a short-term phenomenon. I'm not too worried about it because these things will play out in the next couple of years.

Perfect. That makes complete sense. Another key question we had, I think a couple of quarters back, and this is something that you had mentioned, is that this is when the BIS was coming into play for flasks and you had mentioned that we have enough capacity to last us till Diwali. So now we have officially crossed Diwali and you did mention a statement where you have already lost revenue. So how is it looking like for the rest of the year? I mean especially Q3, right, before your capacity start coming in. Should we expect a material impact in the next quarter Q3 because of flask?

There is an impact. In fact I thought the impact would be worse, but it's been -- I mean we had stock, we had inventory, but the demand in the market was far higher than our ability to supply that demand. So therefore, we did lose out on potential revenue growth. I mean just to be clear, we've still grown 12% in non-glassware. But that growth may have been north of 20%, 25% had we had that inventory. As you rightly mentioned, the inventory is on the lower side now. I think we have enough to last us -- frankly speaking, a couple of channels have already stopped accepting non-BIS goods, which is also impacting sales. So even with the inventory there, some channels are not accepting those goods. So that is also hurting us. But probably from Q4, we'll start seeing some bounce back and maybe Q1 of next year we should be back to normal, I would say, output or normal sales. But yes, there will be some impact, hard to quantify in the moment.

Got it. Great. And just a confirmation on initial remark you made, probably I'm missing something here. But you said the base is not comparable, right? So last year, Diwali was I think 28th, 21st -- last year Diwali was third week of October and this time it was last week of October, right? [indiscernible]

No, the other way round. I think last year was 1st or 2nd November if I'm not mistaken.

And this time it was third week of October. So the reason you called it out, is it because you are seeing a Y-o-Y dip in the current quarter? Is that the reason because...

You see, again if you look at my Q2 remarks last year, it will also have some comment on this and the Q2 the year before will have some. So I'm just calling it out so that we don't think that these are exactly comparable. There's some impact. I'm not projecting anything for Q3 at all.

The next question is from the line of Akshat Mehta from Seven Rivers Holding.

I had a few questions on the results. So number one, I just wanted to understand on the revenue part. Except for, let's say, the month of September where you see an early impact of Diwali coming in; for August and for July on a figurative basis, what kind of year-on-year growth did you see? I'm not asking for a specific number, but a trend so that we can understand where the industry itself is moving except for the festive season period.

As I said before, the first quarter was not good. You know the numbers for the first quarter, right? So the first quarter was challenging for everybody and we had, if I'm not mistaken, single-digit kind of growth in the first quarter. This started changing from, I would say Q2 onwards, the first half of Q2 and obviously the festive season supercharged it a little bit. We'll have to see now how the rest of the year goes. Hard to predict because here actually there are 2 factors at play. One is the demand from the market and the other is our ability to supply specifically 1 product category that is hydra. And that is muddying the waters a little bit in the short run because it's hard to predict how it's going to play out. Overall, I would say demand has picked up from Q1 onwards to Q2 and Q3 and we see with the GST reduction, I think although it's not directly impacting our goods at all, but just general consumer sentiment seem to be better than before. So I'm reasonably bullish on demand going forward. And our short-term issue, which is specific to Borosil on our ability to supply the demand on the hydra category, that will fix itself in the next 2, 3 quarters. So overall, I'm quite bullish on the future.

[Operator Instructions] The next question is from the line of Bhavin Rupani from Investec.

Sir, first question on small kitchen appliances. So we'll see BIS implementation kicking in from FY '26 onwards. So just wanted to understand what proportion of our non-glassware revenue stands exposed to BIS right now? And if we are still importing it, can we see jump in working capital because of this going into second half?

Yes. Frankly, the entire non-glassware segment is subject to BIS now with what you just mentioned. So the main drivers were hydra, which is the vacuum glass; then appliances and then the stainless steel. These are the 3 categories within non-glassware. Now as it stands, when we now -- we've also launched gas stoves as a fourth category. But the third and fourth, namely the steel and the gas stoves, we were already aware that this issue is coming so we started with only Make in India. So that product won't be impacted at all. And hydra, which is the biggest category, we've already decided to produce in India and that's on route. So appliances will be impacted, but seeing this coming -- of course we knew this was coming from some time ago. Already roughly 50% of our appliance revenues are Made in India and this number will go to 70%, 80% in the next 12 months. So we are seeing good traction there from our local sourcing. It takes some time and, like I said, there is a margin pressure on that. But overall, I think we are on the right track. So there will be some working capital impact although frankly speaking, it will not be that material because last year our inventory went up because we had a higher inventory of hydra, which has now come down, and that will be replaced by BIS inventory of appliances. So net-net from last year, I don't think there will be much impact, but I expected working capital to reduce this year which may not happen.

So net-net can one say that our import contribution right now is 20%, 25% of total non-glassware revenue as of now?

Of total revenues?

Non-glassware revenue.

No, it may be slightly higher than that. But I think by the end of this financial year, it will reduce to even lower than that so maybe 10%, 15%. Right now because we stocked up, it may be slightly higher than that.

Got it. Also, sir, you mentioned about expansion in other categories going ahead in non-glassware. So what is the priority list? Any indicative list should also be fine over here?

Look, obviously whatever we sell more, we manufacture. Whatever we sell more, there's a Venn diagram. One is what we sell and the other is what we aren't able to source at a competitive cost, which we believe we can manufacture at a better quality and cost. So the intersection of those 2 diagrams will give you what we are going to make. But I don't have an answer for you at the moment.

Right. And the CapEx will start from FY '27, '28 onwards.

From FY '27 not even '28. But like I said, I don't want to get into specifics because these are just under consideration and haven't been approved by our Board yet. So we'll do it, we'll cross the bridge when we come to it.

All right. And 1 more question on hydra. So this is the first time that we are doing a steel product in-house. So what is your sense on ramp-up and time to full utilization? And what would be the peak revenue as well as EBITDA for this category?

See, peak revenue from our production I think would be close or just north of INR 200 crores However, when we can reach there? Our effort obviously is to get there as quickly as possible. I don't want to put a number or a date out there because, like you said, it's the first time. There are many known unknowns which we will solve for, but there are also many unknown unknowns which are hard to kind of predict. So I don't want to give a number or a date. But I think we followed the process, we've recruited good talent, we've done everything by the book. So I see no reason why this should take more than any other plant would take. So yes, but I see no reason why this should be more than 6 to 12 months, but let's see where that goes.