Borosil Renewables Limited , India's largest solar glass manufacturer, reported a strong 37% year-over-year revenue growth for the first quarter, despite facing a significant setback from its German subsidiary's insolvency.

Financial Highlights

The company achieved a revenue of ₹332.26 crores in Q1, up from ₹241.82 crores in the same quarter last year. EBITDA surged by 211% to ₹92.53 crores, representing a margin of 27.8%, compared to ₹29.71 crores (12.3% margin) in the previous year's Q1.

Operational Performance

The company's average selling prices increased by 31% to ₹138.10/mm from ₹105.52/mm in the corresponding quarter. This price improvement was primarily driven by anti-dumping duties imposed on Chinese and Vietnamese solar glass imports.

German Subsidiary Insolvency

Despite the strong operational performance, Borosil Renewables recorded an exceptional loss of ₹325.91 crores due to the full provisioning of its exposure to its German subsidiary, GMB Glasmanufaktur Brandenburg GmbH (GMB). GMB filed for insolvency on July 4, citing a complete absence of demand recovery in the European market.

Given the uncertainty surrounding the insolvency proceedings, Borosil Renewables decided to fully provide for this exposure, resulting in a net loss of ₹272.35 crores for the quarter.

Expansion Plans

Looking ahead, Borosil Renewables' Board has approved the expansion of two new furnaces, each with a capacity of 300 TPD, totaling 600 TPD. This expansion, estimated to cost ₹950 crores, is targeted for commissioning by December 2026.

To fund this growth, the company has approved a ₹379.52 crore preferential equity issue, subject to shareholder approval at the upcoming Extraordinary General Meeting scheduled for August 14.

Future Outlook

With the exit from the European market, Borosil Renewables is realigning its focus on India's growing solar industry. The company aims to leverage the strong policy tailwinds, including the five-year anti-dumping duty on Chinese and Vietnamese imports, to drive its growth in the domestic market.

The planned capacity expansion is expected to address the significant supply gap in the Indian market, where imports currently account for almost 75% of the demand. As India's solar module manufacturing capacity is projected to rise, Borosil Renewables is positioning itself to capitalize on this growth opportunity.

Despite the short-term impact of the German subsidiary's insolvency, Borosil Renewables appears well-positioned to benefit from the positive trends in the Indian solar glass market, supported by favorable government policies and increasing domestic demand for solar modules.

Borosil Renewables , a leading manufacturer of solar glass, has reported a substantial net loss for the quarter ended June 30, despite showing growth in revenue. The company has also announced plans for a significant equity issuance to raise funds.

Financial Performance

Borosil Renewables reported a net loss of Rs 2,723.46 crore for the quarter ended June 30, a stark contrast to the loss of Rs 36.43 crore in the same period last year. This significant increase in losses comes despite a growth in revenue.

The company's revenue from operations for the quarter stood at Rs 332.26 crore, up from Rs 241.82 crore in the corresponding quarter of the previous year, representing a growth of about 37.4%.

Exceptional Item Impact

The substantial increase in net loss is primarily attributed to an exceptional item of Rs 325.91 crore. This exceptional item relates to the company's exposure to its subsidiaries, Geosphere Glassworks GmbH and GMB Glasmanufaktur Brandenburg GmbH (GMB), a step-down subsidiary in Germany.

The company has fully provided for its exposure of Rs 325.91 crore with these subsidiaries, which includes investments, loans (including interest), and other receivables. This decision was made following GMB's filing for insolvency on July 4, due to the absence of demand recovery and ongoing funding requirements.

Operational Highlights

Despite the significant net loss, Borosil Renewables showed improvements in its core operations:

• Total income increased to Rs 337.78 crore, up from Rs 244.39 crore in the same quarter last year.
• The company managed to reduce its power and fuel expenses to Rs 76.48 crore from Rs 70.17 crore year-on-year, despite the increase in production.

Equity Issuance Plan

In a strategic move to strengthen its financial position, Borosil Renewables has announced plans to issue equity shares through a preferential allotment. The key details of this equity issuance are:

• The company plans to issue up to 70,93,874 fully paid-up equity shares.
• The issue price is set at Rs 535 per share, including a premium of Rs 534.
• The total amount to be raised through this issuance is approximately Rs 379.52 crore.
• The shares will be allotted to non-promoter category investors, with up to 82 investors participating in this preferential issue.

Outlook

The significant net loss and the decision to fully provide for its exposure to the German subsidiaries indicate that Borosil Renewables is facing challenges in its international operations. However, the growth in domestic revenue and the planned equity issuance demonstrate the company's efforts to strengthen its core business and financial position.

Investors and market observers will likely keep a close watch on how the company utilizes the funds from the equity issuance and its strategies to return to profitability in the coming quarters.