Borosil Renewables

Q2 FY23 Results Analysis

 Borosil Renewables Q2 FY 23
Consolidated fig.
Q2 FY 23 Q2 FY 22 YoY % Q1 FY 23 QoQ %
[in INR crore]

Revenue 169 161 5% 170 - 0.4%

EBITDA 44 59 -25% 51 -14%

EBITDA Margin % 26% 37% - 1100 BPS 30% - 400 BPS

Net Profit 24 34 -30% 30 -20%

Net Profit Margin % 14% 21% - 700 BPS 18% - 400 BPS

▪ Lower EBITDA in Q2 FY23 is mainly due to the rising cost of energy and packing materials which could not
be passed on fully due to market conditions and the ex-factory selling prices were raised compared to the
previous quarter but they were lower compared to the corresponding quarter during last financial year.

▪ There has been drop in selling rates in domestic market in Sept 2022 by 10-15% after discontinuation of
ADD on Import of solar glass from China from 17th Aug 2022 while costs remained high.
 Borosil Renewables Q2 FY 23
Sales vs EBITDA % Power and Other Expenses Trend
195 70% 45
39 40
185 40 37 38
179 60% 35 35
35
Sales Trend [inr crores]

175 170 169 31 30

169

EBITDA Margin %
50% 30 27 26
165 161
25
155 45% 40%
20
145 37% 35% 30% 15
135 30% 10
26% 20%
125 5
115 10% -
Q2 FY 21 Q3 FY 21 Q4 FY 21 Q1 FY 22 Q2 FY 22 Q2 FY 21 Q3 FY 21 Q4 FY 21 Q1 FY 22 Q2 FY 22

Revenue EBITDA Margin Power & Fuel Exp Other expenses

✓ The historic growing sales trend was primarily due to increase in adaptation of renewable energy theme,
there is no Anti dumping duty applicable on imports of Solar Glass from China from 18th August 2022,
impact of the same can be felt in the top line of Sep quarter.
✓ The declining operating margins can be attributed to the increasing input and fuel costs. Due to rising
natural gas prices, the input cost has significantly risen, therefore the company is undergoing margin
pressure in this quarter. It may reduce or sustain in the long-term, depending on gas prices in the future.
✓ The selling prices are determined by the cost of imported items, thus the input cost cannot be passed on to
buyers beyond a certain level.
 Borosil Renewables Q2 FY 23
Revenue Breakup INPUT COSTS
160 151

39
137
132

37
140

36

35
123 121
120
100

27
80
60 48
38 38
40 31 28
20
0
Domestic Exports
Q2 FY 22 Q3 FY 22 Q4 FY 22 Q1 FY 23 Q2 FY 23 Q2 FY 21 Q3 FY 21 Q4 FY 21 Q1 FY 22 Q2 FY 22

▪ Export Sales during Q2FY23 (including to customers in SEZ) were INR 47.9 Cr. (INR 39.5 Cr. in the previous
quarter), comprising 28.3% of the turnover. The European operations will take time to stabilize further and
improve the margins after a price revision takes place or fuel costs decrease.
▪ Domestic glass demand is likely to more than double in the coming years. The Indian solar sector will see an
increase in demand for thin glass. However the impact of ADD will slow the growth od domestic companies
due to lower pricing by Chinese firms.
▪ Borosil accounts for 28% of its sales from glass with a thickness of less than 3.2mm.
Borosil Renewables Q2 FY 23 – Sector Update
➢ Out of total installed power generation capacity of 408 GW as of
Sep’22 in India, renewables form around 29% of the same (118 GW)
of which solar (61 GW) is about 52% of the renewable capacity.

➢ Government of India has a target to install 175 GW of Renewable

Energy by 2022, of which Solar is 100 GW. The target for Solar has
since been raised to install 300 GW by 2030.

➢ FY22 has witnessed the highest annual Solar power installations

(13.9 GW) and set the pace for future. Installations in FY23 likely to
rise to 18-20 GW.

➢ The Union Cabinet approved the

second tranche of the PLI
(Production Linked Incentive)
scheme. The grant worth Rs.
19,500 Crore is given for the
scheme
 Borosil Renewables Q2 FY 23 – Management Commentary

The Union Cabinet approved the second tranche of the PLI (Production Linked Incentive) scheme. The grant worth Rs. 19,500 Crore
is given for the scheme . About 65 GW of manufacturing capacity is expected to get benefitted from this scheme.

The PLI scheme has a component for sourcing the ancillaries of PV modules (like Cells, Solar Glass, EVA, Backsheet, etc.)
locally. This component ensures a higher pay-out of incentive for local procurement of ancillaries. This arrangement is
expected to incentivize the module manufacturers to procure domestically produced solar glass.

United States Senate passed the Inflation Reduction Act (IRA) in Aug’22. IRA will help the US solar market grow 40% over
baseline projections through 2027, equal to 62 GW of additional solar capacity, according to new forecasts by the Solar
Energy Industries Association (SEIA) and Wood Mackenzie.

The solarization of railways is expected to be a growth driver for the industry. 500 MW of Rooftop Generation Capacity by
2022 and 20 GW of Land Capacity to be installed by 2030 for self sustenance.

In case of solar module manufacturing, due to stiff competition from low-priced imports, the actual utilization of Domestic
Manufacturing was about 6 GW annually (about an average of 40-45% utilization) in 2021-22. However, this is expected to increase
to 10-12 GW in FY 2022- 23 on the back of strong local demand duty to BCD on import of modules and exports demand.
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