Borosil Renewables (BORORENEW) Q4 03/04 earnings summary

Executive summary

• FY04 gross sales (incl. excise) were ₹651.09m, down from ₹687.30m; PBT loss widened to ₹8.02m from ₹3.25m, while PAT was ₹1.10m, down from ₹4.44m.

• Furnace constraints and suspended operations at Maraimalai Nagar weighed on production; consumerware focus shifted to niche products, lowering sales but improving margins.

Financial highlights

• Net sales were ₹616.90m versus ₹660.01m; other income fell to ₹16.31m from ₹24.21m, and profit before interest, depreciation and extraordinary items was ₹52.23m versus ₹74.40m.

• Interest expense fell to ₹33.29m from ₹62.65m and depreciation to ₹28.88m from ₹36.12m; net extraordinary income was ₹1.93m versus ₹21.12m.

• PAT of ₹1.10m included a deferred tax credit of ₹9.13m; EPS was ₹0.32 versus ₹1.29. No dividend was recommended.

• Exports increased to ₹29.5m from ₹17.7m.

Outlook and guidance

• Marol Tank 1 upgrade from 12 to 22 tonnes/day was targeted for completion by end-September 2004, at an estimated cost of ₹120m; expected to lift productivity, quality and profitability.

• The ₹120m upgrade was to be funded with term loans up to ₹50m and the balance from internal funds; ₹51.6m was spent on the project during FY04.

• Higher Tank 1 output was expected to meet untapped export demand; new export markets were a priority after the rebuild.

• Consumerware strategy centered on microwave glassware and higher-quality drinking glasses, with focus on Borosil International, Napoli and the traditional Borosil brand.