Key highlights from Borosil Renewables Ltd (BORORENEW) Q1 FY23 Earnings Concall
Q&A Highlights:
- Rahul Dani of Monarch Networth asked that in opalware if there is a possibility for outsourced manufacturing. Pradeep Kheruka, Chairman replied that there is a possibility and the company is evaluating it and expects to bridge 2Q23 with some outsourced stock.
- Rahul Dani of Monarch Networth enquired about any pricing actions taken due to commodity pricing. Pradeep Kheruka, Chairman said that pricing across metals has reduced. On non-glass products, cost is lower. On own production, challenge is power, fuel and gas. In 1Q23, Borosil said it took some price increases and don’t see any further price increases in the short term.
- Manav Vijay of Deep Financial asked about the total capex. Anand Sultania CFO replied that the total capex was more than INR500 crores. Also, inflation and other costs have increased it by INR60 crore. There is also an IT initiative taken that will contribute about INR25 crore of capex.
- Aditi Bhattar asked about competition in the scientific division from plastic instruments, if that’s a threat to replace company’s glass products. Pradeep Kheruka Chairman clarified that there is no switch from glass to plastic. The things that can be done in glass can only be done in glass due to some properties in pharma industry.
- Aditi Bhattar also asked about opalware segment and if melamine will again take over the market as its prices are coming in line with opalware. Pradeep Kheruka Chairman answered that the company is not seeing melamine as competition. Melamine is not the right material to use as like plastic.
- Aditi Bhattar enquired about the opalware margin as it’s low vs. competitors. Pradeep Kheruka Chairman answered that the only difference between Borosil margin and competitor’s margins would be the ad and sales promotion incentive, which Borosil spends 8%, while competitors don’t need to spend that much as they are established.
- Amit Agarwal of Burman Capital enquired if the company would have inventory to address the 2Q23 demand that’s seasonally high. Pradeep Kheruka Chairman clarified that the company is very low on inventory. The company is looking to buy some inventory and sell it.
- Amit Agarwal of Burman Capital asked about the long term margin outlook in scientific. Pradeep Kheruka Chairman answered that long term potentially EBITDA margin expectation is north of 25% which should be achievable.