Borosil Renewables Says Capacity Running ‘Flat Out’, Margins Will Improve

Borosil Renewables Ltd. is the only solar glassmaker in India. Add to that some successful fundraising in order to double capacity for the second time in five years, and protection from an anti-dumping duty on its only competition — imports — and that may explain why the share price has risen 320% this year. In fact, the stock has risen around 500% from its 52-week low in March.

BloombergQuint’s Menaka Doshi talks to Pradeep Kheruka, executive chairman and promoter on the lack of competition, pricing power and growth outlook.

Here are some of the key highlights of the conversation:

Here are some of the key highlights of the conversation:

• The government has emphasised the importance of obtaining solar panels in India in the last two-three years. All schemes require ‘Made in India’ solar panels.
• While it isn’t required for solar glass to be made in India, it still gives impetus to locally manufactured glass and allows Borosil Renewables to service India’s solar sector.
• Taxing and tiresome nature of solar glass manufacturing discourages competition.
• “We’ve been in this over the last 11 years and we’ve whittled down our costs to so much that even though the competition from China is heavily subsidised, we are still able to compete with them.”
• Achieved 28.5% Ebitda in the second quarter of this financial year; it’s likely to grow.
• Last 11 years have been very challenging. The company only turned profitable in 2016.
• “Before that we were just filling in the hole we had dug for ourselves which had all come from dumping by China or Chinese-owned companies.”
• Call for anti-dumping duty on Malaysia was because those companies are owned by Chinese parents who were selling raw material way below global price to enter Indian market.
• Anti-dumping duty allows the competitive landscape in India to sharpen.
• There is a case for others to come in but the technology is not simple, it’s quite specialised.
• “The R&D is done on the fly. When we need something done, we go out and do it.”
• Probably have the lowest cost of melting glass, highest rate of production from a single line.
• “Selling to about 22% of the market up till March 2020 because what we’re making we’re exporting 25% approximately to buyers in West Europe.”
• Borosil Renewables is not the price setter in the market despite having monopoly, besides competition from import. “The imported glass is the price setter in the market. The capacity abroad is 40 times our capacity.”
• Anti-dumping duty only evens the playing field a bit.

• “We’re now producing flat out. It’s now a question of getting the glass out there.” Continue Reading.