Borosil Glass Works Ltd - Result Update Q1FY18

16th August 2017 By Edelweiss

Borosil Glass Works Ltd. (Borosil) Q1FY18 reported standalone sales at INR 50cr de-grew ~4% y-o-y, scientific-ware flat y-o-y and consumer-ware down 7% y-o-y mainly due to the channel de-stocking ahead of the transition to GST in seasonally weak quarter for both the segments. Gross margin were reported at 45%, contrated by 130bps y-o-y. EBITDA at INR ~3cr (up 1% y-o-y) on account of decrease in overhead expenses (down 18% y-o-y) as percentage of sales to 25.3% against previous year same quarter of 29.6%. EBITDA margin was reported at 6% (expanded 30bps y-o-y). We continue to believe that rising market share, vibrant product portfolio, wide distribution reach and benefit from GST implementation, would accelerate the company’s growth trajectory which in turn is bound to propel strong cash flows and healthy return ratios.

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Key Highlights
  • The company experienced a drop in the revenues due to the channel de-stocking ahead of transition to GST. But the management expects strong sales in consumer ware division due to the upcoming festive season, improvement in facility and extension of anti-dumping duty over bone-china and porcelain table-wares and kitchen-wares.
  • The Company maintained its gross margins at 45% and EBITDA margin improved by 30bps y-o-y, as company has reduced its advertisement expenses in quarter to INR 3cr against previous year same quarter of INR 5cr.
  • Burgeoning market share, a vibrant product portfolio and wide distribution reach are bound to aid Borosil clock 32% earnings CAGR over FY17-20E- supported by healthy cash flows and robust return ratios.

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