Summary
Borosil Limited - Q3 FY26 Earnings Call Summary Friday, February 06, 2026 4:00 PM
Event Participants
Executives 5 Anand Sultania (CFO), Dhaval Patel (Head, IR), Rajesh Chaudhary (Whole-time Director), Rituraj Sharma (President), Shreevar Kheruka (MD & CEO)
Analysts 4 Akshat Mehta (Seven Rivers Holding), Bhavin Rupani (Investec), Keval Ashar (IO Research), Resham Jain (VVD Asset Managers)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations (9M) | ₹912 crores | +9% YoY; Growth resilient despite BIS-related supply headwinds in the Hydra segment. |
| Operating EBITDA (9M) | ₹145 crores | +3.4% YoY; Marginal growth due to lower bottle availability and product mix shifts. |
| EBITDA Margin (9M) | 16.2% | -80 bps YoY; Impacted by lack of Hydra sales; management estimates ~18% potential with full supply. |
| Profit After Tax (9M) | ₹64.1 crores | +1.6% YoY; Growth moderated by higher depreciation and one-time exceptional labor code provisions. |
| Net Cash Position | ₹13 crores | Robust liquidity with ₹104 crores in cash/investments against ₹91 crores total debt. |
| Glassware Revenue (9M) | ₹231 crores | +21% YoY; Driven by a structural shift from plastic to borosilicate glass for health and hygiene. |
| Opalware Revenue (9M) | ₹314 crores | +7% YoY; Tepid growth attributed to a maturing category requiring product refreshes. |
| Non-Glassware Revenue (9M) | ₹349 crores | +2% YoY; Significantly hampered by 30% degrowth in Hydra bottles due to BIS non-compliance. |
| Inventory Days | 99 days | Higher inventory (₹324 crores) due to strategic build-up of appliances ahead of QCO deadlines. |
Geographic & Segment Commentary
- Glassware: Recorded the strongest performance with 21% growth. Management highlights a “quiet but decisive transformation” in Indian kitchens as consumers shift from plastic to glass lunchboxes and storage due to concerns over chemical leaching.
- Larah (Opalware): Currently operating at 95% utilization. While growth has slowed to 7%, the company is planning a minor debottlenecking (to 90 TPD) and a furnace rebuild in FY27 to refresh the category.
- Non-Glassware (Appliances & Hydra): Hydra segment saw a 30% degrowth due to material unavailability following BIS mandates. Conversely, appliances and stainless steel cookware are growing faster than the industry as the company expands its “Make in India” domestic sourcing.
Company-Specific & Strategic Commentary
- In-house Hydra Manufacturing: The Board approved a ₹65 crore capex for 3 production lines in Rajasthan (Stylenest India Ltd). Two lines will start Q4 FY26, with a total capacity of 4 million units annually to ensure BIS compliance and reduce import reliance.
- Quality Control Order (QCO) Readiness: Effective March 2026, BIS certification is mandatory for electrical appliances. Borosil has already shifted 60% of its appliance sourcing to India (targeting 85% by next year) and advanced inventory to prevent sales disruptions.
- Renewable Energy Transition: Investing ₹75 crores in a 20 MWp solar plant with battery storage, expected to commission in Feb 2026. This will cover 65% of the company’s total power requirements and significantly reduce energy costs for the glassware lines.
- Operational Efficiency: Ad and promotion spends were slightly reduced to ₹60 crores (9M) as the company pivoted marketing focus toward glassware while bottle supplies were constrained.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA Margin | Low-20s% (Short-term) | Management targeting 20%+ through Hydra ramp-up, solar energy savings, and glassware premiumization. |
| Return on Capital (ROCE) | 24% Pre-tax | Target threshold for all new investments, including the new Rajasthan Hydra facility. |
| Hydra Ramp-up | 3–6 Months | Expecting to reach 100% capacity utilization within half a year of commissioning. |
| Glassware Expansion | 50% Capacity Increase | Brownfield expansion at existing facility in planning phase; formal announcement expected in Q1 FY27. |
Risks & Constraints
| Risk | Context |
|---|---|
| BIS Compliance / Regulatory | Ongoing shifts to BIS standards caused a 30% drop in Hydra sales. Management is mitigating this via domestic capex and shifting 85% of appliance sourcing to India. |
| Execution Risk (New Plant) | The first-ever in-house production of steel bottles may face initial challenges with scrap rates and manpower productivity (learning curve). |
| Demand Maturity | Opalware demand has been “lukewarm.” Management acknowledges the need for industry-wide product excitement and category refreshes to sustain growth. |
Q&A Highlights
Hydra Supply & Margins
- Question: What is the ramp-up plan and targeted margin for the new steel bottle facility? (Bhavin Rupani)
- Answer: Ramp-up will take 3-6 months. While initial scrap rates might be higher, the long-term target is 24% pre-tax ROCE. Current 30% degrowth in Hydra is purely supply-side; demand remains very strong. (Shreevar Kheruka)
Supply Chain & Sourcing
- Question: How is the sourcing shift for appliances progressing given the upcoming QCO? (Bhavin Rupani)
- Answer: Domestic sourcing for appliances is currently at 60% and will hit 85% by end of next year. We have advanced inventory to mitigate any disruption from the March 2026 deadline. (Shreevar Kheruka)
Profitability Drivers
- Question: When will we see the impact of cost control and backward integration on margins? (Keval Ashar / Resham Jain)
- Answer: We have a clear roadmap to the low-20s EBITDA margin. Solar power will significantly reduce energy costs for glassware, and shifting from “trading” to “manufacturing” margins in Hydra will provide a structural boost. (Shreevar Kheruka)
Maintenance & Capex
- Question: What are the plans for furnace relining and glassware capacity? (Bhavin Rupani)
- Answer: Opalware furnaces are rebuilt every 2.5 years (₹15-16cr per furnace). Glassware is at 90% utilization; we plan a 50% brownfield expansion using existing space. (Shreevar Kheruka / Anand Sultania)
Key Takeaway
Borosil Limited’s 9M FY26 performance was characterized by strong structural growth in glassware (+21%) offset by temporary supply disruptions in the Hydra bottle segment (-30%) due to BIS compliance transitions. Consolidated revenue grew 9% to ₹912 crores, while EBITDA margins stood at 16.2%. The company is aggressively pivoting to a “Make in India” model with a ₹65 crore capex for in-house steel bottle manufacturing and a ₹75 crore investment in solar energy to de-risk the supply chain and lower power costs. Management remains bullish on the consumer shift from plastic to glass and expects a return to 18-20%+ EBITDA margins as Hydra supply normalizes and renewable energy benefits kick in. With a net cash position and expanding domestic manufacturing, Borosil is positioned to scale toward its ₹2,000 crore revenue milestone.
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