Shares of Borosil Renewables Ltd (BRL), a manufacturer of solar glass and value-added solar products, rose nearly 5% in early trade on Tuesday, clocking gains for the sixth straight session. The smallcap stock has surged 36% so far in December, and 38% in the last one year.

The recent rally in stock was seen after the Ministry of Finance (Department of Revenue) imposed a provisional anti-dumping duty on imports of textured tempered coated and uncoated glass from China and Vietnam. The action is being seen as a strategy to curb unfair trade practices and protecting domestic manufacturers from the impact of cheaper imports.

On December 4, 2024, the Ministry of Finance notified provisional anti-dumping duties on imports of “textured tempered coated and uncoated glass”, effective for six months from the date of issuance, unless revoked, amended, or superseded earlier. The decision was taken after a comprehensive preliminary investigation conducted by the Directorate General of Trade Remedies (DGTR) in February, which found that solar glass was being exported to India from China and Vietnam at prices below fair market value, resulting in dumping.

The move is expected to benefit Borosil Renewables as it is first among solar glass manufacturers in India, commanding a 40% market share in the domestic market (catering to over 400 customers). It also exports its products to the U.S., Turkey, and Europe.

On Tuesday, Borosil Renewables shares rose as much as 4.9% to ₹600 on the BSE, while the market capitalisation increased to ₹7,815 crore. Early today, the renewable stock opened higher at ₹580.95 against the previous closing price of ₹571.80 on the BSE.

At the current level, Borosil group stock trade 10% lower than its 52-week high of ₹667.40 touched on February 1, 2024. The counter has risen 49% in nearly months after hitting its 52-week low of ₹403.10 on October 25, 2024.  

In the second quarter ended September 30, 2024, Borosil Renewables slipped into losses, while revenue dropped as reduction in the selling price of solar glass and the company’s inability to pass on the increase in the raw material prices and power costs impacted profitability.

The company posted consolidated loss of ₹13.12 crore in Q2 FY25, as compared to ₹30.47 crore profit in the year ago period. The total income declined to ₹378.25 crore from ₹406.31 crore in the corresponding period last year.

Last month, India Ratings and Research (Ind-Ra) revised the outlook on Borosil Renewables’ bank facilities to ‘Negative’ from ‘Stable’ while affirming the ratings at ‘IND A’. The negative outlook was attributed to lower-than-expected improvement in the company’s consolidated margins in FY25, despite the imposition of basic custom duty (BCD) in H2 FY25 and the company’s green energy initiatives to save power and fuel costs. The company’s foreign subsidiaries also recorded operating losses in FY24, largely due to the cancellation of orders from its German subsidiary, on account of weak demand.

“BRL’s consolidated EBIDTA margins declined sharply in FY24, largely due to a reduction in the selling price of solar glass and the company’s inability to pass on the increase in the raw material prices and power costs. The power and fuel costs as a percentage of sales increased to 30% in FY24, on account of limited availability of administered price mechanism (APM) gas and its increased dependency on higher priced regassified liquefied natural gas (RLNG),” Ind-Ra said in a note.

Ind-Ra expects BRL’s consolidated revenue to improve 15%-20% YoY in FY25, supported by healthy demand as well as the enhanced capacity. Adding to it, the demand for solar glass has increased following the governments initiatives for the installation and manufacturing of domestic modules through various schemes, helping the company sustain or improve its revenue growth over the medium term. The agency believes that healthy demand from the U.S. and Turkey markets to further aid the improvement in the scale of operations. 

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