Borosil Renewables – Bright as sunlight

I went through the latest conceal for Borosil renewable that took place on Nov 6 2023. The overall commentary was unfortunately negative.

• So till Mar 2024, things will continue to remain same and there will be no respite from the price erosions happening due to the dumping of solar glasses from China, Vietnam and Malaysia.

• In fact, when asked if the worst is behind (since the margins are almost at all time low 7% and 8% in the last 2 quarters), the management was still not very optimistic as the prices fluctuate a lot and their selling prices are totally dependent on Chinese prices which are announced every Wednesday.

I just want to understand that what do you think that the margins have they bottomed out? Or do you think that the worst is still not over for Borosil?

It’s a good question. We are trying to find the answers because the prices every week are changing. And that’s the fact on the ground because the Chinese prices for each and every component of solar are getting announced on every Wednesday, and they keep changing. So we are doing our best in terms of performance, operational performance, some improvements are still to be achieved that we are trying at the factory level. But in terms of prices, which are a major factor, which will decide about the percentage margin or whether it is bottomed out or not, that is still uncertain.

• Borosil together with 3 other solar glass manufacturers (names not mentioned in the call) have been trying to negotiate with the govt to start the basic custom duty on imports of these products to have a level playing field.
  Quote:

We filed our application exactly 2 weeks ago. So it’s premature at this stage. But I want to tell you that there are 4 companies in India, which are now manufacturing solar glass. So whatever decision comes in our case will be applicable to all.

They are also facing similar issues in Germany where they have their subsidiary. Quoting from the concall about this:

The position in other important markets is as under. The demand in European Union has suffered a massive blow from September as the customers deferred canceled their orders due to inability to compete with deeply discounted prices of modules imported from China, Southeast Asia.

The customers have severely cut down production and are running only shallow operations in the hope to come back to a full production later. These customers have represented to the German government as well as to the European Commission and some positive announcements have been made already. It is expected that concrete steps to revive the solar manufacturing sector in the European Union and Germany will be taken by the end of November or sometime in December. Interfloat has been a part of these approaches to the government, and we expect that the measures will include some positive steps for local production of solar glass.

So to conclude uncertainity remains at least till March 2024. If there is any import duty post this period, then there are chances of some revival. But until then will be watching from the sidelines.