Borosil Renewables says margins have likely bottomed out, fundraise aimed at debt reduction

Pradeep Kheruka, Chairman of solar glass manufacturer Borosil Renewables , says while demand continues to be robust, pricing is a challenge, as "the Chinese prices are impossible, in the sense that you cannot make (solar) modules as the price at which they're selling it."

Borosil Renewables manufactures patterned glass and low iron solar glass for application in photovoltaic (PV) panels, flat plate collectors and greenhouses.

The Mumbai-based company has been facing severe margin pressures. For the third quarter of the current financial year (Q3FY24), the company's earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin was at 6.1% versus 7.6% in the same quarter last year.  Higher power and fuel costs and material costs also added to the pressure.

The revenue was up 34% year-on-year (YoY) at ₹330 crore in Q3, but the weak operating performance along with higher finance costs led the company to a loss of around ₹16 crore.

"I think recognition by governments in India and in Europe, that what we are seeing today is predatory pricing at an unprecedented level. This is not competition by any stretch of imagination," Kheruka noted.

Borosil Renewables also recently announced plans to raise ₹500 crore, which  Kheruka said will be used to retire debt. The current debt on books is nearly ₹538 crore, he said.

In the interim Budget presented on February 1, Finance Minister Nirmala Sitharaman announced that the government will provide 300 units free power per month for homes with rooftop solar panels.

The announcement was cheered by Street with stocks of solar-related product manufacturers rising.

"The government has been leading the charge in Aatmanirbharta, which is something that I support greatly," Kheruka said discussing his expectations from the government to help counter the dumping issues.

Prime Minister Narendra Modi had, on January 22, first announced the ‘Pradhan Mantri Suryodaya Yojana’, a government scheme under which one crore households will get rooftop solar power systems.

This isn’t the first scheme for promoting the installation of rooftop solar power systems, though. In 2014, the government launched the Rooftop Solar Programme that aimed to achieve a cumulative installed capacity of 40,000 megawatts (MW) or 40 gigawatts (GW) by 2022 — watt is a unit of power and is calculated as the amount of energy used over time, specifically one Joule per second.

However, this target couldn’t be achieved. As a result, the government extended the deadline from 2022 to 2026. The Pradhan Mantri Suryodaya Yojana seems to be a new attempt to help reach the target of 40 GW rooftop solar capacity

Market capitalisation of the company is ₹7,936 crore.