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Borosil Limited Conference Call Summary
Conference Call Details • Date: June 4, 2024 • Event: Transcript submission of conference call held on May 28, 2024 • Hosted by: ICICI Securities • Participants: Senior management including CEO Shreevar Kheruka, CFO Anand Sultania, VP Balesh Talapady • Purpose: Discuss Q4 FY '24 and overall FY '24 performance, followed by Q&A
Financial Performance Highlights • Consolidated Revenue Growth: 27% increase to INR 942.3 crores • Profit After Tax: INR 65.9 crores, up from INR 51.9 crores • Demerger: Successful separation of scientific and industrial products into Borosil Scientific Limited • Sustainability Commitment: Plans for product expansion and enhanced brand visibility
Growth Outlook • Consumer Glass Growth: Expected to exceed 11% due to increased capacity and competitive pricing • Opal Ware Capacity: Currently at 80%, with long-term CAGR forecast of 15%-20% • EBITDA Margins: FY '24 margin at 15.4%, with short-term impacts expected from new furnace
Operational Insights • New Furnace Capacity: Three times current setup, aimed at significant production increases • Operational Efficiency: Pressware facility at 60% efficiency, targeting optimum levels in 6-7 months • Import Reduction: Expected to drop to 20-30% this year
Strategic Initiatives • Advertising Budget: Set at 7-8% of sales • Differentiation Strategy: Focus on premium quality and customer-driven product development • Channel Distribution: General trade is the largest segment, followed by e-commerce
Competitive Landscape • Market Competition: Focus on innovation and quality over pricing; competition primarily against plastic and unorganized sectors • BIS Norms Impact: Short-term effects due to reliance on imports, optimism for local vendor development
Capital Expenditure and Financial Strategy • Investment in FY23: INR 325 crores for opalware, INR 100 crores planned for FY25 • Debt Management: Gross debt of INR 150 crores, with cash flow directed towards working capital • Equity Raise Permission: Received approval to raise up to INR 250 crores, but no immediate plans
Conclusion • Future Outlook: Positive growth and margin improvement anticipated, with an invitation for future interactions at the end of the call.
Borosil Limited Q3 FY2024 Earnings Conference Call Summary
Financial Performance • Date of Call: February 15, 2024 • Revenue Growth: 26.3% increase to Rs. 713.4 Crores • EBITDA: More than doubled to Rs. 124.7 Crores • Profit After Tax: Rs. 60.8 Crores • Product Performance: • Strong growth in glassware and non-glassware products • 39.6% increase in sales for opalware brand, Larah • New Facility: Commissioning of a borosilicate glass production facility to reduce imports and enhance margins
Future Outlook • Medium-Term Growth: Optimistic about growth; plans to raise capital for expansion • CAGR Target: 15-20% for the medium term • Capacity Utilization: Focus on fully utilizing existing capacity before further expansion
Q&A Highlights • Capital and Depreciation: • Depreciation expected to rise to Rs. 80 Crores annually post new furnace commissioning • Sales Growth: Strong despite market challenges, attributed to product diversity and innovation • Opalware Revenue Potential: Projected Rs. 400-420 Crores annually with current capacity • Demerger of Borosil Scientific: Separate management team in place
Competitive Landscape • Market Conditions: • Slowdown in new capacity additions; industry operating at 85-90% capacity • Rising competitive intensity in the opalware market • Institutional Sales: Double-digit growth across all channels
Consumer Acceptance and Market Size • Market Size Concerns: Need for improved consumer acceptance to reach Rs. 3000-4000 Crores • Product Innovation: Essential for enhancing consumer acceptance and market growth
Manufacturing and Cost Analysis • Cost Comparison: Indian production costs 15% lower than imports from China, but complex due to various factors • Profitability: All sales channels are profitable; gross margins comparable to category leaders
Conclusion • Commitment to Consumers: Focus on passing benefits to consumers to expand the market • Future Interactions: Positive outlook on medium to long-term growth; gratitude expressed for participant engagement
Borosil Limited Q2 FY '24 Earnings Conference Call Summary
Transcript Availability • Transcript from Q2 FY '24 Earnings Conference Call available on the company website. • Call held on November 9, 2023, featuring senior management. • Moderated by Rahul Dani from Monarch Networth Capital.
Financial Highlights • Consolidated Revenue: Increased by 15.4% to INR 562.6 crores. • EBITDA: Rose to INR 81.1 crores; EBITDA margin slightly decreased to 14.4%. • Profit Before Tax: Fell to INR 41.3 crores due to prior year's exceptional gain and increased costs. • Consumer Business: 14.8% sales growth, driven by non-glassware products. • Scientific Products Division: Grew by 16.8%, but EBITDA margin declined to 9.4%.
Operational Updates • Klass Pack's EBITDA margin declined due to lower sales and increased costs. • New borosilicate pressware facility in Jaipur to be commissioned in early Q4 FY '24. • NCLT Mumbai bench sanctioned reorganization into two entities; Borosil Scientific Ltd to be listed in January 2024.
Market Outlook • Medium-term growth expected in both Consumer and Scientific sectors. • Focus on expanding customer base, launching new products, and enhancing supply chain efficiency. • Targeting double-digit revenue growth in the Scientific sector.
Consumer Demand and Capacity Utilization • Slowdown in growth expectations for the consumer division noted. • Opalware division capacity utilization at 75-80%, with plans to reach 100% next year. • Pricing pressure observed across product categories.
Financial Management • Seasonal increase in working capital due to inventory buildup for Diwali. • Current debt at INR 215 crores; minimal additional borrowing planned. • Capital expenditure mostly complete; maintenance capex expected next year.
Future Projections • Projected depreciation estimated at INR 85 to INR 90 crores for the upcoming year. • Consistent tax rate of 25% for this year and next. • Klass Pack division facing challenges in domestic sales; capacity utilization below 50%.
Strategic Focus • Stabilizing existing capital investments before pursuing further acquisitions. • Anticipating breakeven for Borosil Technologies in Q3 or Q4. • Emphasis on import substitution and government support for domestic production.
Conclusion • Optimism expressed for future growth and potential for attractive gross margins in new product developments. • Call concluded with gratitude towards participants and anticipation for future discussions.
Borosil Limited Q1 FY '24 Earnings Conference Call Summary
Announcement • Transcript of Q1 FY '24 Earnings Call available on the company's website. • Call hosted by Monarch Networth Capital on August 16, 2023. • Key executives included CEO Shreevar Kheruka, Director Rajesh Chaudhary, and CFO Anand Sultania.
Financial Performance • Consolidated Revenue: INR 250.6 crores (16% increase YoY). • EBITDA: INR 31.2 crores (12.4% margin, down from 13.5%). • Profit Before Tax (PBT): INR 10 crores. • Profit After Tax (PAT): INR 6.4 crores (impacted by one-time expenses).
Business Segments • Consumer Business: • Sales growth of 18.4%, driven by non-glassware products. • Glassware sales slightly down. • Scientific Division: • Revenue increase of 10.2% (aided by Goel Scientific acquisition). • EBITDA margins declined to 8.5% due to higher costs.
Future Plans • Focus on expanding product offerings in lab glassware and instrumentation. • New Borosilicate Pressware facility in Jaipur to be commissioned in Q3 FY '24. • Plans for in-house Borosilicate 3.3 expansion furnace on hold; external sourcing continues. • Reorganization into two publicly traded entities under NCLT review.
Market Outlook • Optimism about improving material costs and customer sales. • Anticipation of robust growth in the consumer sector driven by long-term trends. • Expectation of double-digit revenue growth in the Scientific segment.
Q&A Highlights • Revenue Growth: Strong in opalware despite subdued market; slower overall growth than expected. • Margin Recovery: Expected in the Scientific division; substantial improvements may take another year. • Capacity Expansion: Capex for Klasspack deployed; demand slow leading to underutilization. • Export Sales: Now over 30% of revenues; optimism about stabilizing raw material prices.
Strategic Insights • Importance of skilled personnel and effective teams for achieving goals. • Market size for opalware potentially larger than previously stated. • Pricing adjustments needed for glassware to boost adoption; some products already competitively priced. • Seasonal nature of SIP business; expectations for margin recovery in Q3 and Q4.
Leadership and Guidance • Leadership appreciation from participants. • Focus on return on capital employed (ROCE) rather than absolute margins. • Advertising costs around 7%; revenue growth projections of 15-20% CAGR for Consumer division and 10-12% for Scientific division. • Long-term focus on scaling the business and achieving satisfactory returns despite potential short-term volatility.
Borosil Limited Q4 FY23 Earnings Conference Call Summary
Announcement Details • Date of Call: May 30, 2023 • Transcript Availability: Accessible on the company's website • Key Participants: • Shreevar Kheruka (Managing Director and CEO) • Anand Sultania (CFO) • Rajesh Kumar Chaudhary (Whole Time Director) • Communication Signed By: Anshu Agarwal (Company Secretary and Compliance Officer)
Financial Highlights • Consolidated Revenues: Surpassed INR 1000 crore, reaching INR 1027 crores (22.3% increase YoY) • Consolidated EBITDA: Fell to INR 138.3 crores (margin decline from 20% to 13.5%) • Profit Before Tax: Decreased to INR 96.7 crores • Consolidated PAT: Increased to INR 90.2 crores • Consumer Business Growth: 29.5% increase in sales, driven by non-glassware products • Scientific Products Division: Grew by 7%, with lab glassware sales up 20%
Strategic Initiatives • LabQuest Product Line: Focus on enhancing penetration in lab glassware sector • Klasspack Sales: Experienced a 19% decline in FY23; however, export sales grew by 36% • Acquisition: 90.17% of Goel Scientific Glass Works acquired to enhance product offerings
Financial Performance Insights • EBITDA Margin for Scientific Products: Decreased from 22.6% in FY22 to 18.1% in FY23 • Net Cash Reserve: INR 90.4 crores • CAPEX Plans for FY24: Significant investments to enhance production capacity
Future Outlook • Medium-Term Growth: Optimistic about consumer business and double-digit growth in scientific sector • ESG Initiatives: Commitment to restructuring plans to create two separate listed entities by August 2023
Q&A Highlights • Goel Acquisition: Addressable market size estimated at ₹1,500 crores; revenue doubling expected in four years • Consumer Division Growth: New furnace to increase capacity; projected sales of 60%-80% in the current year • Quality Investments: Ongoing improvements in Klasspack to enhance manufacturing standards
Growth Projections • Klasspack Growth Rate: Expected 10-12% for FY24 • Consumer Products Growth Rate: Projected 20-30%, contingent on volume growth • Return on Capital Employed (ROCE): Goals exceeding 20% with growth targets of 10-12% for scientific division and 20% for consumer division
Closing Remarks • Long-Term Prospects: Optimism despite recent margin declines; commitment to sustainable business practices and shareholder rewards through profit growth.
Borosil Limited Q3 FY23 Earnings Conference Call Summary
Announcement Details • Date of Announcement: February 14, 2023 • Conference Call Date: February 8, 2023 • Hosted by: Monarch Networth Capital • Key Participants: • Shreevar Kheruka (Managing Director & CEO) • Anand Sultania (CFO) • Swadhin Padia (Senior General Manager of Accounts) • Transcript Availability: Accessible on the company's website
Financial Performance Highlights • Consolidated Revenue: INR 768.3 crores (24% YoY increase) • Consolidated EBITDA: INR 92.7 crores (12.1% margin, down from 20%) • Profit Before Tax: INR 90.2 crores • Consolidated PAT: INR 67.9 crores (up from INR 50.6 crores)
Business Segment Performance
Consumer Business
• Sales: INR 565.3 crores (29.8% increase) • Challenges: Decline in EBITDA margin to 10.5% due to product mix and increased marketing expenses. • Expansion Plans: Increasing production capacity despite challenges.
Scientific Products Division
• Net Sales: INR 203 crores (10.2% increase) • Lab Glassware Sales: Grew by 27.1% • Klasspack Sales: Declined by 18.7% due to high base effect and increased costs. • EBITDA Margin: 16.3%, down from 20.4%
Strategic Focus and Challenges • Customer Relationships: Building ties with high-quality customers and introducing "pharma plus" customers. • R&D Investments: Higher costs in LabQuest segment; Klasspack facing low margins. • Long-term Growth: Optimism about future margins and revenue growth despite current challenges. • ESG Commitment: Plans to disclose quantifiable targets soon.
Q&A Session Insights • Consumer Division: Slowdown in some categories, but confidence in Opal Glass and export potential. • Raw Material Costs: Stabilizing, with expectations for improved EBITDA margins. • Expansion Plans: CAPEX initiatives totaling around INR 600-625 crores expected to complete by March 2024. • New Furnace Utilization: Initial capacity of 30-50%, aiming for 100% by 2024-2025.
Future Outlook • Glass Tubing CAPEX: Resuming with a focus on local production to reduce costs. • Opalware Growth: Driven by replacement demand and market recovery post-COVID. • Capacity Utilization: Targeting improvements to achieve better margins. • Overall Optimism: Confidence in recovery and growth in borosilicate and scientific segments despite current pressures.