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Borosil Renewables Ltd: Annual Report 2023-24 Analysis

August 1, 2024 · 35 min read

#Borosil Renewables Ltd #2023-24

Overview #

Comprehensive Analysis #

This analysis summarizes the key aspects of Borosil Renewables Limited’s (BRL) integrated annual report for the fiscal year 2023-24. The report showcases BRL’s commitment to integrated reporting, encompassing financial performance, business operations, risks, and Environmental, Social, and Governance (ESG) initiatives.

I. Financial Performance:

BRL’s FY2023-24 financial performance reveals a mixed bag:

Revenue Growth: Consolidated revenue showed strong growth, increasing by 53.2% year-over-year (YoY) to ₹98,587.40 lakhs (standalone) and ₹1,36,928.34 lakhs (consolidated). This growth is primarily driven by increased demand for solar glass, despite price pressures.
Profitability Decline: Profitability metrics, however, tell a different story. Standalone net profit experienced a significant decline, turning into a net loss of ₹1,652.42 lakhs compared to a profit of ₹8,854.39 lakhs in FY2022-23. Consolidated net profit also declined to a loss of ₹5,027.36 lakhs. The primary reason cited is intense price pressure due to dumping from Chinese and Vietnamese solar glass producers. The impact of the newly commissioned SG#3 furnace on profitability appears to be negative in this year.
Free Cash Flow: Despite the net loss, the company generated a positive free cash flow of ₹1,398.27 lakhs. This indicates efficient management of operating expenses and working capital.
Capital Expenditure: Capital expenditure was ₹6,585.92 lakhs, primarily directed towards capacity expansion, efficiency improvements, and technology upgrades.
Credit Ratings: BRL maintains strong credit ratings (Long Term: IND A; Short Term: IND A1), indicating sound financial health despite the recent decline in profitability.

II. Business Segments:

BRL operates primarily in the manufacturing of low-iron textured solar glass, supplying to solar PV module manufacturers in India and internationally. The report highlights:

Market Leadership: BRL holds over 20% of India’s solar glass market share, positioning it as the largest domestic player.
International Presence: The company exports to the EU, Turkey, the USA, and MENA regions, accounting for about 18.45% of its total sales in FY2023-24. BRL also has a German subsidiary with a 65% market share in the German solar glass market.
Product Diversification: BRL offers various solar glass products, including different thicknesses (2.0mm, 2.5mm, 3.2mm, 4.0mm, 5.0mm, 6.0mm), textures, and coatings (anti-glare, anti-soiling). This diversification helps to cater to different customer needs and emerging technologies.
Capacity Utilization: The company reported a capacity utilization of over 90% at its Indian facility. The new SG#3 furnace commissioned in February 2023 had positive production results but appears not yet profitable. The planned 1,100 TPD capacity expansion is on hold.

III. Risks:

The annual report identifies several key risks:

Dumping by Chinese and Vietnamese Competitors: This is the most significant risk, directly impacting profitability due to price wars. Government intervention (tariffs, anti-dumping duties) is crucial for mitigating this risk.
Climate Change: BRL acknowledges climate change risks (extreme weather events, water scarcity, supply chain disruptions) but also highlights the opportunity presented by the growth in renewable energy.
Circular Economy Challenges: Managing water and effluent, optimizing energy consumption, and promoting recycling are identified as both risks and opportunities.
Supply Chain Management: The company highlights the risk of disruptions and volatility in the global supply chain, aiming to mitigate it through responsible sourcing policies and supplier engagement.
Regulatory and Compliance: Adherence to various environmental and ethical regulations is essential.
Human Capital: Attracting, retaining, and upskilling a skilled workforce is a key concern for BRL.
Data Privacy and Cybersecurity: Protecting sensitive customer and company data is crucial.

IV. ESG Initiatives:

BRL demonstrates a strong commitment to ESG through various initiatives:

Renewable Energy: The company commissioned a 10 MW solar-wind hybrid power project, increasing its renewable energy consumption to ~27%. Further expansion to 26.5 MW is planned.
Water Management: BRL highlights its commitment to water conservation and efficient wastewater treatment, aiming for zero liquid discharge (ZLD). A significant reduction in water consumption intensity per rupee of turnover was achieved.
Waste Management: Recycling rates for various types of waste exceed 99%, with a focus on resource reuse and a circular economy approach.
Sustainable Supply Chain: BRL has implemented a sustainable sourcing policy and Supplier Code of Conduct, emphasizing ethical and environmental standards.
Human Rights and Labor Practices: The company promotes a diverse, inclusive, and safe work environment, with initiatives focused on employee well-being, health and safety, skill development, fair wages, and equitable opportunities for women. Its LTIFR (Lost Time Injury Frequency Rate) is low at 0.45 per one million person hours worked.
Community Engagement: BRL actively engages with local communities through Corporate Social Responsibility (CSR) initiatives focused on agricultural development, water conservation, education, and healthcare. Over 7,500 lives have been positively impacted through these initiatives.
Governance: BRL’s commitment to strong corporate governance is evident in its board structure, committee composition, policy framework, and transparency initiatives. The report details the workings of several committees – Audit, Nomination & Remuneration, Stakeholder Relationship, and Risk Management – along with their performance.

V. Conclusion:

Borosil Renewables Limited’s integrated annual report provides a comprehensive overview of its performance and strategic direction. While the company experienced a decline in profitability due to external factors (particularly dumping), it demonstrated resilience through strong revenue growth, positive free cash flow, and a proactive approach to ESG. The report’s transparency and detailed disclosures offer valuable insights into the company’s challenges and opportunities in a rapidly evolving renewable energy landscape. The company’s success hinges on continued innovation, effective risk management, proactive engagement with stakeholders, and the sustained implementation of its ESG strategy, particularly addressing the threat of dumping through government policy.

Detailed Analysis #

Balance Sheet #

Asset Analysis #

The values for total assets, current assets, cash and cash equivalents, accounts receivable, and inventory are presented differently in the standalone and consolidated financial statements. Here’s a breakdown from both:

Standalone Financial Statements (as of March 31, 2024):

Total Assets: ₹1,39,139.14 lakhs
Current Assets: ₹30,938.59 lakhs
Cash and Cash Equivalents: ₹1,550.09 lakhs
Accounts Receivable (Trade Receivables): ₹10,252.96 lakhs
Inventories: ₹14,656.36 lakhs

Consolidated Financial Statements (as of March 31, 2024):

Total Assets: ₹1,68,395.22 lakhs
Current Assets: ₹60,107.95 lakhs
Cash and Cash Equivalents: ₹14,777.37 lakhs
Accounts Receivable (Trade Receivables): ₹12,257.29 lakhs
Inventories: ₹24,528.26 lakhs

Important Note: These figures are extracted directly from the provided annual report. Always refer to the original financial statements for the most accurate information. The slight discrepancies in the summation of current assets might be due to rounding.

Liability Analysis #

Similar to the assets, the liability figures are also presented separately for standalone and consolidated financial statements. Here’s the breakdown:

Standalone Financial Statements (as of March 31, 2024):

Total Liabilities: ₹1,38,839.78 lakhs
Current Liabilities: ₹21,242.10 lakhs
Long-Term Debt (Non-Current Liabilities - Borrowings): ₹23,512.24 lakhs
Accounts Payable (Trade Payables): ₹4,921.22 lakhs

Consolidated Financial Statements (as of March 31, 2024):

Total Liabilities: ₹89,119.00 lakhs
Current Liabilities: ₹32,573.48 lakhs
Long-Term Debt (Non-Current Liabilities - Borrowings): ₹41,916.67 lakhs
Accounts Payable (Trade Payables): ₹8,325.77 lakhs

Important Note: These figures are extracted directly from the provided annual report. Always refer to the original financial statements for the most precise and accurate information. There may be slight differences due to rounding or categorization. The “Total Liabilities” figure is calculated by subtracting equity from total assets; discrepancies might occur due to rounding differences in the report.

Equity Analysis #

Shareholders’ equity, retained earnings, and share capital values, like assets and liabilities, are reported differently in the standalone and consolidated financial statements. Here’s a breakdown:

Standalone Financial Statements (as of March 31, 2024):

Shareholders’ Equity: ₹88,976.84 lakhs
Retained Earnings: ₹33,214.07 lakhs
Share Capital: ₹1,305.38 lakhs

Consolidated Financial Statements (as of March 31, 2024):

Shareholders’ Equity (Equity attributable to owners of the company): ₹87,305.71 lakhs
Retained Earnings: The consolidated statement does not directly report retained earnings in a single line item. Retained earnings are included within the broader “Equity attributable to owners of the company” figure.
Share Capital: ₹1,305.38 lakhs (Note: Share capital is typically the same in both standalone and consolidated statements as it represents the company’s own issued capital.)

Important Note: These figures are directly extracted from the provided annual report. For precise details, always consult the original financial statements. The calculation of shareholders’ equity involves subtracting total liabilities from total assets; minor discrepancies might arise from rounding differences in the report. The consolidated statement separates shareholders’ equity into amounts attributable to the parent company and non-controlling interests; the figure provided is for the parent’s share only.

Income Statement #

Operating Performance #

Again, we need to distinguish between standalone and consolidated figures. Here’s the information extracted from the annual report, remembering that slight discrepancies might exist due to rounding:

Standalone Financial Statements (for the year ended March 31, 2024):

Revenue: ₹98,587.40 lakhs
Cost of Revenue (Cost of Materials Consumed + Changes in Inventories): ₹29,345.35 lakhs
Gross Profit: ₹69,242.05 lakhs
Operating Expenses: ₹33,768.88 lakhs (This is calculated by summing Employee Benefits Expense, Finance Costs, Depreciation and Amortization Expense, and Other Expenses)
Operating Income (Operating Profit): ₹35,473.17 lakhs (This is calculated as Revenue less Cost of Revenue and Operating Expenses)

Consolidated Financial Statements (for the year ended March 31, 2024):

Revenue: ₹1,36,928.34 lakhs
Cost of Revenue (Cost of Materials Consumed + Changes in Inventories): ₹36,256.88 lakhs
Gross Profit: ₹1,00,671.46 lakhs
Operating Expenses: ₹1,09,047.13 lakhs (Sum of Cost of Materials Consumed, Changes in Inventories, Employee Benefits Expense, Finance Costs, Depreciation and Amortization Expense, and Other Expenses).
Operating Income (Operating Profit): ₹7,484.62 lakhs (Revenue less operating expenses)

Important Note: These figures are directly from the provided annual report. For precise values, please always consult the original financial statements. Some minor discrepancies may result from rounding differences. Calculating operating expenses might vary slightly depending on which expense items are included; I have included all expenses that seem to be directly related to operations.

Bottom Line Metrics #

Here’s a breakdown of net income, EBITDA, basic EPS, and diluted EPS, again differentiating between standalone and consolidated figures from the provided annual report:

Standalone Financial Statements (for the year ended March 31, 2024):

Net Income: (₹1,652.42) lakhs (This is a net loss)
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization): ₹11,893.32 lakhs (This is calculated by taking Profit before finance cost, depreciation, and tax and adding back finance costs and depreciation.)
Basic EPS: (₹1.27)
Diluted EPS: (₹1.27)

Consolidated Financial Statements (for the year ended March 31, 2024):

Net Income: (₹5,027.36) lakhs (This is a net loss)
EBITDA: ₹7,484.62 lakhs (This is calculated by taking Profit before finance cost, depreciation, and tax and adding back finance costs and depreciation.)
Basic EPS: (₹3.59)
Diluted EPS: (₹3.59)

Important Note: These values are directly taken from the annual report. Minor discrepancies could occur due to rounding. Always refer to the original financial statements for the most precise values. The EBITDA calculation might vary depending on which items are included; the calculation provided here is consistent with the information presented.

Cash Flow Components #

Here’s a summary of the operating, investing, and financing cash flows for Borosil Renewables Limited, again differentiating between the standalone and consolidated figures reported:

Standalone Financial Statements (for the year ended March 31, 2024):

Operating Cash Flow: ₹9,238.78 lakhs
Investing Cash Flow: (₹8,600.26) lakhs (Note: Parentheses indicate a net cash outflow)
Financing Cash Flow: ₹18,464.15 lakhs

Consolidated Financial Statements (for the year ended March 31, 2024):

Operating Cash Flow: ₹6,874.62 lakhs
Investing Cash Flow: (₹21,526.50) lakhs (Note: Parentheses indicate a net cash outflow)
Financing Cash Flow: ₹16,796.62 lakhs

Important Note: These figures are taken directly from the provided annual report’s Statement of Cash Flows. Minor discrepancies might be present due to rounding. For the most precise figures, it’s crucial to always refer to the original financial statements. The consolidated figures include the cash flows from all subsidiaries and the associate company. The significant negative investing cash flow in both standalone and consolidated reports mainly reflects the capital expenditures the company made during the year.

Cash Flow Metrics #

The annual report provides some of this information, but not all in a directly comparable manner. Here’s what we can extract:

Free Cash Flow (FCF):

The report explicitly states a free cash flow of ₹1,398.27 lakhs for the consolidated financial statements. The standalone report does not explicitly state a free cash flow figure. FCF calculation is not provided, requiring a calculation based on the available data in the cash flow statement.

Capital Expenditure (CAPEX):

The report states a capital expenditure (CAPEX) of ₹6,585.92 lakhs for the year ended March 31, 2024. This is for the standalone financial statement. The consolidated report does not provide this value in a single, clear line item but various capital expenditures are mentioned under investing cash flows. To arrive at the consolidated CAPEX, a more in-depth analysis of the investing activities section of the consolidated cash flow statement would be necessary.

Dividends Paid:

The Board’s report clearly states that no dividends were paid for the financial year 2023-24.

Important Note: To accurately determine the standalone FCF, one would need to calculate it using the standalone cash flow statement data (this is not done here as it is not directly given in the annual report). Similarly, a precise consolidated CAPEX figure requires a detailed analysis of the investing activities of all subsidiaries and the associate company; the investing cash flow numbers are not the same as CAPEX due to other investing activities, and are not directly additive to produce a single consolidated CAPEX number. Always refer to the original report for precise figures.

Financial Ratios #

Profitability Ratios #

Profitability ratios need to be calculated from the financial statement data provided in the annual report. Here’s a calculation of the requested ratios for both the standalone and consolidated financial statements. Note that slight variations might exist depending on the precision used in calculations. Also, the reported net income is negative; hence, some profitability ratios will also be negative or undefined (e.g., ROE and ROA when net income is negative.)

Standalone Financial Statements (for the year ended March 31, 2024):

Revenue: ₹98,587.40 lakhs
Cost of Revenue: ₹29,345.35 lakhs
Gross Profit: ₹69,242.05 lakhs
Operating Income: ₹35,473.17 lakhs
Net Income: (₹1,652.42) lakhs
Average Total Equity: ₹87,112.21 lakhs ( (86,454.58 + 87,759.56) / 2)
Average Total Assets: ₹134,109.85 lakhs ((139,139.14 + 130,969.88)/2)

Profitability Ratios (Standalone):

Gross Margin: (Gross Profit / Revenue) = (69,242.05 / 98,587.40) = 70.18%
Operating Margin: (Operating Income / Revenue) = (35,473.17 / 98,587.40) = 36.00%
Net Profit Margin: (Net Income / Revenue) = (-1,652.42 / 98,587.40) = -1.67%
Return on Equity (ROE): (Net Income / Average Total Equity) = (-1,652.42 / 87,112.21) = -1.89%
Return on Assets (ROA): (Net Income / Average Total Assets) = (-1,652.42 / 134,109.85) = -1.23%

Consolidated Financial Statements (for the year ended March 31, 2024):

Revenue: ₹1,36,928.34 lakhs
Cost of Revenue: ₹36,256.88 lakhs
Gross Profit: ₹1,00,671.46 lakhs
Operating Income: ₹7,484.62 lakhs
Net Income: (₹5,027.36) lakhs
Average Total Equity: ₹90,677.28 lakhs ((90,636.72 + 91,941.70)/2)
Average Total Assets: ₹163,320.90 lakhs ((168,395.22 + 148,688.98)/2)

Profitability Ratios (Consolidated):

Gross Margin: (Gross Profit / Revenue) = (1,00,671.46 / 1,36,928.34) = 73.54%
Operating Margin: (Operating Income / Revenue) = (7,484.62 / 1,36,928.34) = 5.46%
Net Profit Margin: (Net Income / Revenue) = (-5,027.36 / 1,36,928.34) = -3.67%
Return on Equity (ROE): (Net Income / Average Total Equity) = (-5,027.36 / 90,677.28) = -5.54%
Return on Assets (ROA): (Net Income / Average Total Assets) = (-5,027.36 / 163,320.90) = -3.07%

Important Note: These are calculated ratios based on the data provided in the annual report. There might be minor variations depending on the precision used in the calculations. Always refer to the original report for the most accurate underlying financial data. The negative net income significantly impacts the ROE and ROA, resulting in negative values. The average total equity and average total assets are calculated based on the beginning and ending values reported in the balance sheet.

Liquidity Ratios #

To calculate liquidity ratios, we’ll use the figures from the standalone and consolidated balance sheets. Remember that slight variations might occur due to rounding differences in the original report.

Standalone Financial Statements (as of March 31, 2024):

Current Assets: ₹30,938.59 lakhs
Current Liabilities: ₹21,242.10 lakhs
Quick Assets: This requires subtracting inventories from current assets. Quick Assets = ₹30,938.59 lakhs - ₹14,656.36 lakhs = ₹16,282.23 lakhs
Cash and Cash Equivalents: ₹1,550.09 lakhs

Liquidity Ratios (Standalone):

Current Ratio: (Current Assets / Current Liabilities) = (30,938.59 / 21,242.10) = 1.46
Quick Ratio: (Quick Assets / Current Liabilities) = (16,282.23 / 21,242.10) = 0.77
Cash Ratio: (Cash and Cash Equivalents / Current Liabilities) = (1,550.09 / 21,242.10) = 0.07

Consolidated Financial Statements (as of March 31, 2024):

Current Assets: ₹60,107.95 lakhs
Current Liabilities: ₹32,573.48 lakhs
Quick Assets: This necessitates subtracting inventories from current assets. Quick Assets = ₹60,107.95 lakhs - ₹24,528.26 lakhs = ₹35,579.69 lakhs
Cash and Cash Equivalents: ₹14,777.37 lakhs

Liquidity Ratios (Consolidated):

Current Ratio: (Current Assets / Current Liabilities) = (60,107.95 / 32,573.48) = 1.84
Quick Ratio: (Quick Assets / Current Liabilities) = (35,579.69 / 32,573.48) = 1.09
Cash Ratio: (Cash and Cash Equivalents / Current Liabilities) = (14,777.37 / 32,573.48) = 0.45

Important Note: These ratios are calculated based on the data provided in the annual report. Minor discrepancies might result from rounding. Always refer to the original financial statements for precise figures. The quick ratio calculation excludes inventories, as these are considered less liquid than other current assets. The cash ratio is the most conservative liquidity measure, considering only the most liquid assets (cash and equivalents). The consolidated ratios represent the liquidity of the entire group, including its subsidiaries.

Efficiency Ratios #

To calculate these efficiency ratios, we need to use data from both the income statement and balance sheet. The annual report provides some of the necessary components, but not all. We will need to make some assumptions, and therefore these are estimates based on the limited data provided in the report. The accuracy of these estimates depend on the specific numbers used in the calculation. Always consult the original financial statements for precise calculations. It is also important to remember that the efficiency ratios can be sensitive to how the numerator and denominator are calculated.

Standalone Financial Statements (for the year ended March 31, 2024):

Revenue: ₹98,587.40 lakhs
Average Total Assets: ₹134,109.85 lakhs ((139,139.14 + 130,969.88)/2)
Average Inventory: ₹16,048.66 lakhs ((17,440.97 + 14,656.36)/2)
Average Accounts Receivable: ₹7,856.24 lakhs ((10,252.96 + 5,459.52)/2)

Efficiency Ratios (Standalone - Estimates):

Asset Turnover: (Revenue / Average Total Assets) = (98,587.40 / 134,109.85) = 0.73
Inventory Turnover: (Cost of Goods Sold / Average Inventory) = (29,345.35 / 16,048.66) = 1.83 (Assumes Cost of Goods Sold is approximately equal to Cost of Materials Consumed, as a more precise figure is not directly provided in the report)
Receivables Turnover: (Revenue / Average Accounts Receivable) = (98,587.40 / 7,856.24) = 12.55

Consolidated Financial Statements (for the year ended March 31, 2024):

Revenue: ₹1,36,928.34 lakhs
Average Total Assets: ₹158,542.10 lakhs ((168,395.22 + 148,688.98)/2)
Average Inventory: ₹25,498.77 lakhs ((26,469.01 + 24,528.26)/2)
Average Accounts Receivable: ₹10,793.46 lakhs ((12,257.29 + 9,329.64)/2)

Efficiency Ratios (Consolidated - Estimates):

Asset Turnover: (Revenue / Average Total Assets) = (1,36,928.34 / 158,542.10) = 0.86
Inventory Turnover: (Cost of Goods Sold / Average Inventory) = (36,256.88 / 25,498.77) = 1.42 (Assumes Cost of Goods Sold is approximately equal to Cost of Materials Consumed)
Receivables Turnover: (Revenue / Average Accounts Receivable) = (1,36,928.34 / 10,793.46) = 12.70

Important Note: These are estimated ratios. The actual values may differ slightly depending on the precise calculation method and underlying data used. The cost of goods sold is approximated using the cost of materials consumed from the income statement. For precise calculations, always refer to the complete financial statements in the annual report. The consolidated ratios incorporate the performance of all subsidiaries within the group.

Leverage Ratios #

Let’s calculate the leverage ratios using data from the standalone and consolidated financial statements. Remember that minor discrepancies might arise due to rounding differences in the original report.

Standalone Financial Statements (as of March 31, 2024):

Total Debt: ₹35,542.65 lakhs (This is the sum of current and non-current borrowings)
Total Equity: ₹86,175.04 lakhs
Total Assets: ₹1,39,139.14 lakhs
EBIT (Earnings Before Interest and Taxes): ₹(2,133.52) lakhs (This is a net loss, hence negative)
Interest Expense: ₹2,622.83 lakhs

Leverage Ratios (Standalone):

Debt to Equity Ratio: (Total Debt / Total Equity) = (35,542.65 / 86,175.04) = 0.41
Debt to Assets Ratio: (Total Debt / Total Assets) = (35,542.65 / 1,39,139.14) = 0.25
Interest Coverage Ratio: (EBIT / Interest Expense) = (-2,133.52 / 2,622.83) = -0.81 (Note: This is a negative value since EBIT is a net loss.)

Consolidated Financial Statements (as of March 31, 2024):

Total Debt: ₹57,194.92 lakhs (This is the sum of current and non-current borrowings)
Total Equity: ₹89,276.02 lakhs
Total Assets: ₹1,68,395.22 lakhs
EBIT: ₹(5,364.61) lakhs (This is a net loss, hence negative.)
Interest Expense: ₹3,289.71 lakhs

Leverage Ratios (Consolidated):

Debt to Equity Ratio: (Total Debt / Total Equity) = (57,194.92 / 89,276.02) = 0.64
Debt to Assets Ratio: (Total Debt / Total Assets) = (57,194.92 / 1,68,395.22) = 0.34
Interest Coverage Ratio: (EBIT / Interest Expense) = (-5,364.61 / 3,289.71) = -1.63 (Note: This is negative because of the net loss.)

Important Note: These ratios are calculated based on the data provided in the annual report. Minor discrepancies could arise from rounding. Always refer to the original financial statements for precise figures. The negative EBIT in both standalone and consolidated statements results in negative interest coverage ratios, indicating that the company’s earnings were insufficient to cover its interest expenses. The consolidated ratios reflect the financial leverage of the entire group, incorporating the financial positions of subsidiaries and the associate company.

Market Analysis #

Market Metrics #

Several of these market-based ratios require data not directly provided within the annual report itself. We can obtain some values, but others require external market data (share price) that’s not included in the provided document.

Market Cap:

The annual report explicitly states a market capitalization of ₹6,49,751.87 lakhs as of March 31, 2024.

PE Ratio (Price-to-Earnings Ratio):

The PE ratio cannot be calculated from the information provided. The calculation requires the market price per share and the earnings per share (EPS). While the annual report gives EPS, the market price per share at the reporting date is needed and is not in the provided document. This would need to be obtained from a financial data provider (like Yahoo Finance, Google Finance, etc.) on the relevant date.

PB Ratio (Price-to-Book Ratio):

Similar to the PE ratio, the PB ratio cannot be directly calculated. The market price per share is necessary for this calculation, in addition to the book value per share (which can be derived from the balance sheet). The market price per share is missing from the report and needs to be obtained externally.

Dividend Yield:

The annual report explicitly states that no dividends were paid for the fiscal year 2023-24. Therefore, the dividend yield is 0%.

Dividend Payout Ratio:

Since no dividends were paid, the dividend payout ratio is 0%.

Important Note: To calculate the PE and PB ratios, you would need to find the closing market price of Borosil Renewables Limited’s shares on March 31, 2024, from a reliable financial data source. Once you have that price, you can calculate these ratios using the EPS and book value per share from the financial statements.

Business Analysis #

Segment Analysis #

Based on the provided annual report, Borosil Renewables Limited (BRL) operates primarily within a single business segment: the manufacturing and sale of low-iron textured solar glass. While the report mentions geographical segments (India and outside India), it does not break down the financial performance by distinct product lines within the solar glass segment. Therefore, a detailed breakdown by “key products” is not possible from the provided document.

Here’s a summary of what the report provides:

Business Segment: Low-iron textured solar glass manufacturing

Revenue:
- India: ₹80,395.50 lakhs (FY2023-24); Growth rate not explicitly stated but implied to be significant based on the overall revenue growth.
- Outside India: ₹18,191.90 lakhs (FY2023-24); Growth rate not explicitly stated but showed a decline compared to FY 2022-23 which had a 50.76% increase.
- Total (Standalone): ₹98,587.40 lakhs (FY2023-24)
- Total (Consolidated): ₹1,36,928.34 lakhs (FY2023-24)
Growth Rates: The report highlights a significant overall revenue growth of 43.26% (standalone) and 53.2% (consolidated), but specific growth rates for India and outside India segments are not explicitly detailed. The report notes a decline in growth in exports compared to the prior year.
Operating Margins: The report does not directly provide operating margin figures broken down by geographical segment. Overall operating margins declined substantially in both standalone and consolidated reports due to price pressure from competition. Standalone Operating margin fell from 15.64% to -1.73%, while the Consolidated operating margin decreased from 18.18% to 5.46%.
Market Shares: The report states that BRL holds more than 20% market share in the Indian solar glass market. No other specific market share data (by geography or product) is provided. The German subsidiary is stated to hold 65% of the German solar glass market.
Key Products: Although not explicitly segmented, the report mentions that BRL offers a variety of solar glass products differing in thickness (2.0mm, 2.5mm, 3.2mm, 4.0mm, 5.0mm, 6.0mm), textures, and coatings (anti-glare, anti-soiling), catering to diverse customer needs and industry trends.
Geographic Presence: The report notes significant sales in India and exports to the EU, Turkey, USA, and MENA regions. The company’s German subsidiary serves the German market.

Important Note: The report does not provide a complete segmentation analysis. The above information is based on what’s explicitly stated or can be reasonably inferred. A more precise breakdown would require accessing supplementary financial data or contacting the company directly. The consolidated figures include data from subsidiaries operating in Germany and Liechtenstein, significantly impacting overall performance metrics.

Risk Assessment #

The Borosil Renewables Limited annual report highlights several key risk factors, although it doesn’t always explicitly categorize them or quantify likelihood and impact severity with numerical scores. Here’s a summary based on the information provided, grouping risks into broader categories:

I. Market Risks:

Category: Market Competition and Price Volatility
Description: Intense competition, particularly from heavily subsidized Chinese and Vietnamese solar glass producers engaging in dumping practices, leading to significant price pressure and reduced profitability.
Impact Severity: High (directly impacts profitability and revenue)
Likelihood: High (ongoing and intensifying trend)
Mitigation Strategies: Advocacy for government intervention (tariffs, anti-dumping duties), diversification of export markets, focus on higher-value added products, cost optimization.
Trends: Continued aggressive capacity expansion by Chinese producers, potential for further price erosion in the short term.

II. Operational Risks:

Category: Supply Chain Disruptions
Description: Dependence on global supply chains for raw materials and components, making the company vulnerable to disruptions caused by geopolitical events, logistical challenges, and supplier-specific issues.
Impact Severity: Medium to High (depending on the nature and duration of the disruption)
Likelihood: Medium (potential for both infrequent and frequent disruptions)
Mitigation Strategies: Diversification of suppliers, development of robust risk mitigation plans, strategic inventory management, building stronger relationships with key suppliers, and engaging in supply chain collaboration.
Trends: Global supply chain volatility likely to persist in the near future.

III. Financial Risks:

Category: Debt and Financing
Description: The company has significant debt, exposing it to interest rate risk and potential difficulties in servicing debt during periods of low profitability.
Impact Severity: Medium to High (depending on interest rate fluctuations and the company’s ability to generate cash flow.)
Likelihood: Medium (interest rate fluctuations are inherent in the market.)
Mitigation Strategies: Efficient management of cash flow, exploring options for debt refinancing at favorable rates, and prudent financial planning.
Trends: Interest rate environment is uncertain; ongoing review and management of debt is crucial.

IV. Environmental and Social Risks:

Category: Environmental Sustainability
Description: Managing environmental impacts (GHG emissions, water consumption, waste generation) and complying with increasingly stringent environmental regulations. This is discussed extensively in the ESG section of the report.
Impact Severity: Medium (potential for fines, reputational damage, and increased operating costs if compliance measures are not met)
Likelihood: Medium (dependent on evolving regulatory landscape and the company’s ability to implement sustainable practices.)
Mitigation Strategies: Investment in renewable energy, water conservation measures, waste reduction and recycling programs, and continuous monitoring of environmental performance.
Trends: Increasingly stringent environmental regulations are likely to persist globally.
Category: Human Capital
Description: Attracting, retaining, and developing skilled labor, ensuring workplace safety and well-being, and maintaining fair labor practices.
Impact Severity: Medium (potential for increased labor costs, disruptions due to labor shortages, and reputational damage from safety incidents or labor disputes)
Likelihood: Medium (competitive labor market and evolving workplace expectations)
Mitigation Strategies: Investing in training and development, providing competitive compensation and benefits, establishing strong safety protocols, and fostering a positive and inclusive work environment.
Trends: Growing demand for skilled labor in the renewable energy sector, increased focus on employee well-being and diversity, equity, and inclusion.

V. Other Risks:

Category: Regulatory and Legal
Description: Changes in government policies, tax regulations, and industry standards can impact the company’s operations and profitability. This includes the impact of tariffs, anti-dumping duties, and other trade policies.
Impact Severity: Medium to High (depending on the specific policy changes)
Likelihood: Medium (inherent uncertainty in government policies)
Mitigation Strategies: Active engagement with relevant government agencies, monitoring policy changes, and developing proactive contingency plans.
Trends: Government regulations in the renewable energy sector are likely to continue evolving.
Category: Geopolitical Risks
Description: Geopolitical instability in key markets (especially regarding the relationship with China) can disrupt supply chains and affect demand.
Impact Severity: Medium to High (dependent on the specific geopolitical events.)
Likelihood: Medium (global geopolitical uncertainty is ongoing)
Mitigation Strategies: Diversification of sourcing and markets, robust supply chain risk management strategies.
Trends: Geopolitical risks are likely to remain a factor in the global business environment.

Important Note: The annual report does not provide a formal risk matrix with numerical scores for likelihood and impact. This analysis qualitatively assesses these factors based on the report’s descriptions and discussion of risk mitigation strategies. The severity and likelihood of these risks are subject to change.

Strategic Overview #

Management Assessment #

Borosil Renewables Limited’s management highlights several key strategies, competitive advantages, market conditions, challenges, and opportunities in its annual report. Here’s a summary:

I. Key Strategies:

Capacity Expansion: Increasing production capacity to meet growing demand for solar glass, both domestically and internationally. While a planned expansion is currently on hold, the report emphasizes the company’s readiness to scale operations as market conditions improve.
Product Innovation: Continuously developing new and improved solar glass products to meet evolving customer requirements and emerging technologies (e.g., thinner glass for high-efficiency modules, specialized coatings). The company highlights its robust R&D process and investments in this area.
Market Expansion: Growing its presence in international markets, particularly in regions where demand for solar energy is increasing (e.g., the USA and MENA region). This strategy aims to diversify revenue streams and reduce dependence on any single market.
Cost Optimization: Implementing measures to enhance efficiency and reduce production costs, while still maintaining high quality standards. This includes investments in new equipment and technologies as well as switching to renewable energy sources.
Sustainable Manufacturing: Integrating sustainability into all aspects of its operations to minimize environmental impact and meet ESG targets, improving brand image and reducing risk of non-compliance.

II. Competitive Advantages:

Early Mover Advantage: As an early entrant into the Indian solar glass market, BRL has established strong relationships with major customers, built expertise in manufacturing and technology, and developed a reputation for product quality.
Technological Capabilities: The company emphasizes its state-of-the-art manufacturing facilities, cutting-edge technologies (e.g., laser drilling, grid printing), and a dedicated R&D center as key competitive strengths. This allows them to offer differentiated and higher-value products.
Customer-Centric Approach: The report highlights BRL’s focus on building strong customer relationships, meeting individual customer needs, and providing responsive after-sales support.
Domestic Manufacturing: The strategic advantage of domestic production enabling shorter lead times, reliable supply, and cost competitiveness relative to imports.
Patented Technology (NoSbEra): The development and implementation of a patented technology that reduces environmental impact by removing Antimony (Sb) from its solar glass manufacturing process.

III. Market Conditions:

Growing Demand: A significant increase in global demand for solar energy is driving the market for solar glass components.
Price Pressure: Intense competition, particularly from Chinese and Vietnamese producers who benefit from government subsidies and dumping practices. This is the single largest challenge highlighted by the company.
Technological Shifts: Market trends show a preference for larger module sizes (M10) and glass-glass bifacial modules, requiring manufacturers to adapt their production processes.
Government Policies: Government policies and regulations concerning renewable energy, local manufacturing, and trade are significantly influencing the market. The impact of tariffs, anti-dumping duties, and other policies are highlighted as critical for the industry’s success.

IV. Challenges:

Intense Price Competition: Dumping by subsidized foreign producers significantly impacts pricing and margins.
Input Cost Volatility: Fluctuations in the prices of raw materials (soda ash, quartz sand) and energy (natural gas, electricity) present a considerable challenge.
Supply Chain Disruptions: Global supply chain volatility can lead to production delays and increased costs.
Regulatory Uncertainty: Changes in government policies and regulations can create uncertainty and risk.
Maintaining Market Share: Intense competition necessitates ongoing efforts to maintain and increase market share.

V. Opportunities:

Growth in Renewable Energy: The expanding global market for renewable energy, particularly solar power, presents significant opportunities for growth.
Technological Advancements: BRL sees opportunities to leverage its R&D capabilities to develop and commercialize innovative solar glass technologies.
Expanding into New Markets: The company seeks to leverage its technological capabilities to further penetrate international markets.
Government Support: Supportive government policies can level the playing field and help to foster domestic solar glass manufacturing.
First Mover Advantage: The company’s early entry in the Indian Market and its established customer relationships and brand image, will help sustain the growth.

Important Note: This is a summary based on the information explicitly stated or implied in the annual report. For a more complete understanding of the company’s strategic direction, further detailed investigation would be helpful. Many of the opportunities are predicated on changes in government policy which remain uncertain.

ESG Ratings #

The provided annual report does not include ESG ratings from any external rating agencies. While the report extensively details BRL’s ESG initiatives and performance, it does not cite any scores or rankings from organizations like MSCI, Sustainalytics, Refinitiv, etc. To find ESG ratings, you would need to consult those agencies’ websites directly, searching for Borosil Renewables Limited.

ESG Initiatives #

Borosil Renewables Limited’s annual report details its Environmental, Social, and Governance (ESG) performance and initiatives. Here’s a summary:

I. Environmental Initiatives:

Renewable Energy: The company commissioned a 10 MW solar-wind hybrid power plant and plans to add another 16.5 MW, aiming to significantly reduce its reliance on non-renewable energy sources. Currently, approximately 27% of its electricity consumption comes from renewable sources.
Water Management: BRL implemented advanced wastewater treatment systems (MBR) aiming for zero liquid discharge (ZLD). The report highlights a significant YoY reduction in water consumption intensity.
Waste Management: The company boasts a high waste recycling and reuse rate (99.6%), emphasizing a circular economy approach and minimizing its reliance on landfills. Specific measures include recycling glass cullets (100%), reusable steel pallets, and composting organic waste.
GHG Emissions: BRL monitors its greenhouse gas (GHG) emissions (Scope 1 and 2) and aims to reduce its carbon footprint. The company highlights that its carbon footprint is 22% lower than the industry average for solar glass production.
Sustainable Supply Chain: The company promotes sustainable sourcing of raw materials by working with suppliers who meet its environmental and social standards. The report highlights the shift towards using bulk material transport, sustainable logistics, and returnable packaging.

II. Carbon Footprint:

The report indicates that BRL’s carbon footprint is 22% lower than the industry average for solar glass production. Specific quantitative data on total GHG emissions (in metric tons of CO2 equivalent) are provided for both Scope 1 and Scope 2 emissions. Scope 3 emissions are not reported.

III. Social Initiatives:

BRL’s social initiatives are primarily driven through its Corporate Social Responsibility (CSR) programs. Key areas of focus include:

Agricultural Development: Supporting farmers through initiatives such as fruit sapling plantation and water conservation projects, aiming to improve their livelihoods and income.
Water Conservation: Undertaking projects to improve water access and availability in water-stressed regions.
Education: Contributing to primary and tertiary education initiatives, including supporting schools in tribal communities.
Healthcare: Contributing to the expansion of healthcare facilities in rural areas.

IV. Governance Practices:

BRL highlights its commitment to strong corporate governance through:

Board Structure: A balanced board composition, including a significant number of independent directors, ensures diverse perspectives and effective oversight.
Committees: Several dedicated committees (Audit, Nomination & Remuneration, Stakeholder Relationship, and Risk Management) oversee various aspects of the company’s operations.
Policies: BRL has implemented various policies (Code of Conduct, Whistleblower Policy, Related Party Transactions Policy, etc.) to ensure ethical and transparent business practices.
Transparency and Disclosure: The company emphasizes transparency in its reporting, providing detailed information on its financial performance, operations, risks, and ESG initiatives. This includes a substantial section on stakeholder engagement.

V. Sustainability Goals:

While specific, quantifiable long-term goals with precise timelines are not comprehensively listed in a single table, the report mentions several key sustainability targets:

Carbon Neutrality: A long-term goal to achieve carbon neutrality at its operational sites by 2050.
Water Reduction: A target to reduce water consumption by 5% annually until FY 2025-26 (compared to a FY 2021-22 baseline).
Gender Diversity: An aim to increase gender diversity year-on-year from FY24 onwards.

Important Note: While the report provides substantial information on BRL’s ESG activities, the reporting framework is not consistently quantitative throughout the document. Some targets are qualitative, while others are quantifiable but lack detailed timelines. To obtain a more complete picture of BRL’s sustainability goals and their status, further research into external ESG databases and company disclosures would be beneficial.

Additional Information #

Operational Metrics #

The annual report provides the following information:

R&D Expenditure: ₹635.70 lakhs for FY2023-24.
Employee Count: The report provides a breakdown of employees and workers, including permanent and non-permanent staff. The total number of permanent employees is 685, and the total number of workers (including both permanent and non-permanent) is 1,238, as of March 31, 2024. The report also notes that ~90% of the workforce comes from rural areas.

It’s important to note that the employee count includes both employees and workers. Depending on the context, “employee count” might refer solely to employees (excluding workers). The precise meaning depends on the specific definition used.

Key Events #

Several significant events are highlighted in Borosil Renewables Limited’s annual report for FY2023-24:

Commissioning of SG#3 Furnace: The successful commissioning of the new solar glass furnace (SG#3) in February 2023, significantly expanding production capacity. While this added significant capacity, it did not immediately translate into increased profitability due to low selling prices caused by industry competition.
Acquisition of GMB and Interfloat: The acquisition of GMB Glasmanufaktur Brandenburg GmbH and Interfloat Corporation in 2022, expanding the company’s international presence and production capacity in the European market. The first full year of operations post-acquisition revealed challenges related to lower selling prices and reduced demand in Europe.
Launch of New Products: Introduction of new solar glass products, including 2.0 mm tempered glass for high-efficiency glass-glass solar modules and enhanced glass textures designed to address key manufacturing issues faced by customers. This demonstrates continued innovation and adaptation to market demands.
10 MW Solar-Wind Hybrid Power Project: Commissioning of a 10 MW solar-wind hybrid power project in May 2023, a key step towards reducing the company’s carbon footprint and dependence on non-renewable energy sources. Further expansion to 26.5 MW is planned.
Rights Issue: The initiation of a rights issue of equity shares to raise funds, primarily aimed at reducing debt and supporting growth initiatives.
Resignations of Key Personnel: The resignations of Mr. Ramaswami V. Pillai (Non-Executive Non-Independent Director) and Mr. Kishor Talreja (Company Secretary and Compliance Officer) are mentioned. Mr. Sunil Roongta was appointed as Whole-time Director in addition to his role as CFO. Mr. Ravi Vaishnav was appointed as the new Company Secretary and Compliance Officer.
Price Pressure and Industry Challenges: The report extensively discusses the significant challenges faced by the solar glass industry due to price pressure from Chinese and Vietnamese competitors engaging in dumping practices. The removal of anti-dumping duties further exacerbated this situation. The report documents the ongoing efforts of the company and the industry to seek government intervention through the imposition of tariffs and anti-dumping duties.

These events significantly shaped BRL’s financial performance and strategic direction during the fiscal year. The overall narrative points to a year of expansion and innovation amidst intense market competition and price volatility.

Audit Information #

Auditor’s Opinion:

The independent auditor, Chaturvedi & Shah LLP, issued an unmodified (clean) opinion on both the standalone and consolidated financial statements of Borosil Renewables Limited for the year ended March 31, 2024. This means that, in the auditors’ opinion, the financial statements present fairly, in all material respects, the financial position, financial performance (including other comprehensive income), changes in equity, and cash flows of the company and its subsidiaries in accordance with Indian Accounting Standards (Ind AS) and other generally accepted accounting principles in India.

Key Accounting Policies:

The annual report outlines several key accounting policies used in preparing the financial statements. These include:

Business Combinations: The company uses both the acquisition method and the pooling of interests method (for common control transactions) for accounting for business combinations. Goodwill is recognized initially at cost and tested annually for impairment, while bargain purchase gains are recognized in other comprehensive income.
Property, Plant, and Equipment (PP&E): PP&E is carried at cost less accumulated depreciation and impairment losses. Depreciation is calculated using the straight-line method over the useful lives of the assets. The company notes that it uses different useful lives for certain plant and machinery and the melting furnace than those prescribed under the Companies Act, 2013.
Intangible Assets: Intangible assets are recorded at cost less accumulated amortization and impairment. Amortization is done using the straight-line method over the useful life. The report explicitly states the useful life used for computer software and technical know-how.
Inventories: Inventories are valued at the lower of cost and net realizable value. Cost includes purchase price, conversion cost, and other costs, using a weighted average method for raw materials and absorption costing for work-in-progress and finished goods.
Cash and Cash Equivalents: These include cash on hand, bank balances, and short-term deposits with original maturities of three months or less.
Impairment of Non-Financial Assets: The company assesses for impairment annually or whenever there’s an indication that an asset may be impaired, using the recoverable amount (higher of fair value less costs of disposal and value in use).
Financial Instruments: The company classifies financial assets and liabilities based on its business model and cash flow characteristics, measuring some at fair value through profit or loss, some at fair value through other comprehensive income, and some at amortized cost. It uses the expected credit loss (ECL) model for impairment of financial assets.
Government Grants: Grants are recognised when there is reasonable assurance of compliance with conditions and receipt. Revenue grants are recognised by offsetting related costs, while asset grants reduce the asset’s carrying amount.
Research and Development (R&D) Expenditure: Research expenditure is expensed, while development expenditure is capitalized only if specific criteria are met (future economic benefits, probability of inflow, reliable measurement of cost).
Current and Non-Current Classification: Assets and liabilities are classified as current or non-current based on a 12-month operating cycle.
Foreign Currency Translation: Transactions are recorded at the exchange rate on the transaction date. Monetary items are translated at closing rates, and non-monetary items at transaction dates or fair value dates. Exchange differences are generally recognized in profit or loss, except for those directly attributable to the acquisition or construction of qualifying assets, which are capitalized.
Employee Benefits: Short-term employee benefits are expensed when services are rendered. Gratuity is treated as a defined benefit plan and is accounted for using actuarial valuations, with actuarial gains and losses recognized in OCI. Share-based payments are measured at fair value at the grant date and expensed over the vesting period.
Income Taxes: Income tax expense includes current and deferred tax components, recognized in profit or loss except for items recognized directly in equity or OCI.

Important Note: This is a summary of the key accounting policies. For complete details and specific aspects of these policies, please always refer to the “Notes to the Financial Statements” section of the annual report.