Borosil Shares Decline by 2% Following Disappointing Q4 Earnings, Margin Concerns Weigh on Stock Performance

Borosil Shares Plummet 2% Amid Weak Q4 Earnings

Shares of Borosil declined by 2.01 percent in trading on Wednesday, following the company's announcement of a 5 percent year-on-year decline in consolidated net profit for the fourth quarter. The stock was trading at Rs 229.59, down Rs 4.72, at 12:54 pm IST.

The company's weak earnings were impacted by higher fuel costs and margin pressure. Borosil reported a consolidated net profit of Rs 10.6 crore for the fourth quarter, down from Rs 11.1 crore in the same period last year. Revenue from operations, however, rose 5.2 percent to Rs 284.1 crore from Rs 270.2 crore a year earlier.

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According to exchange filings, EBITDA declined 18.7 percent year-on-year to Rs 30.2 crore against Rs 37.1 crore in the corresponding quarter last year. EBITDA margin narrowed sharply to 10.6 percent from 13.8 percent.

The company has announced plans to seek shareholders' approval to raise up to Rs 250 crore through multiple routes, including further public offer, American Depository Receipts (ADRs), Global Depository Receipts (GDRs), Foreign Currency Convertible Bonds (FCCBs), debt issuance, Qualified Institutional Placement (QIP), or a combination of permitted instruments, subject to regulatory clearances.

The decline in earnings was attributed to higher fuel costs and margin pressure. Borosil's production at its borosilicate glass furnace in Jaipur was temporarily suspended, while operations at its opal glass furnaces were scaled down after oil marketing companies restricted LPG supplies citing force majeure conditions. The company expects its revenue to continue growing at a compound annual growth rate (CAGR) of 15-16 percent every year, although the steel bottles business was impacted due to BIS rules.

The company has already implemented price hikes to offset some of the cost pressures and aims to grow its EBITDA margin to around 20 percent in the long term. Inventory levels have normalized at around 90-105 days.

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