Borosil Limited (BOROLTD) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Q1FY27 Earnings Conference Call of Borosil Ltd. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then 0 on your touch-down form. Please note that this conference is being recorded. I now hand the conference over to Mr. Manan Goyal from ICICI Securities. Thank you, and over to you, sir.

Thank you. On behalf of ICICI Securities, we welcome you all to Q1 FY27 result conference call of Borusal Limited. Today, we have with us Senior Management, represented by Mr. Ruturaj Sharma, CEO, Mr. Anand Sulkanya, CFO, and Mr. Dhaval Patel, Head of Investor Relations. Now, I hand over the call to the management for their initial comments on the quarterly performance. Then, we will open the floor for Q&A session. Thank you, and over to you, sir.

Thank you, Manan, and ICSA Security for ending this call. Good afternoon to every one of you. The Borussia team is delighted to be communicating with you once again. I am pleased to inform you that Borussia Limited's board has approved the financial results for Q1-FY27 during our board meeting on 14th August 2026. We have submitted our results and an updated presentation to the stock exchanges, and they are available on the company's website for review. Some quick updates. We are pleased to inform you that the company, through its wholly owned subsidiary, Stylenest India Limited, has successfully commissioned setting up of BIS-complied manufacturing unit with two double-walled lines for vacuum-insulated stainless steel flasks, bottles, and containers in the state of Rajasthan. The commercial production from two double-walled lines commenced on 30th June 2026, and the production from third double-walled line is expected to commence during Q2 FY27. With the introduction of new Green Energy Open Access Regulations 2025, we are pleased to inform you that the company has successfully commissioned its third captive solar plant in Beaconate during Q1 FY27 with a capacity of 20-nigowatt peak integrated with battery energy storage system. This is the company's first project with battery storage and the first installation under the Green Energy Open Access Regulations 2025. As a result, solar power now means about 61% of our overall energy requirement. The company has strengthened its retail footprint with the launch of its exclusive Borufill brand stores. The company launched its first exclusive brand outlets in Pune and Gurugram. Thoughtfully designed to elevate the retail experience, the stores offer consumers an immersive destination to explore Borosil's complete range of kitchen, dining, home, and lifestyle solutions under one roof. I am pleased to report that Borosil Limited has delivered a steady performance in Q1 FY27 with consolidated revenue from operations reaching 253.6 crores up from 232.7 crores during the same period last year. This represents a 9% Y-on-Y growth. This steady growth achieved against challenging market conditions reflects the resilience of our business model, the strength of our execution, and the continued trust and loyalty of our customers, placing us on a strong competitive footing alongside our peers. In Q1 FY27, the company achieved an operating EBITDA of INR 35.9 crores against INR 40.2 crores. In Q1 FY26, the EBITDA margin for Q1 FY27 was 14.6% as compared to 17.8% in Q1 FY26. The lower margins are primarily attributable to input cost inflation, particularly in fuel and packaging materials arising from the West Asia conflict. The overall net impact of the conflict on Q1 FY27 was approximately INR 10 crores, which was partially offset through price increases implemented across multiple categories. Additionally, the company continued to face challenges in one of its key categories, Hydra, the vacuum-instated stainless steel flask and bottles category. These challenges adversely impacted the company's financial performance, both in terms of revenue and margins. In Q1 FY27, our other operating income stood at INR 8.2 crores primarily on account of shared service support income, with the related expenses reflected under total expenses and export incentives with other operating income of INR 6.2 crores in Q1 FY26. Profit before tax for the quarter was INR 17.4 crores versus INR 23.5 crores in the same period last year. The current quarter includes royalty income of INR 4 crores and investment income of INR 1.2 crores, while the previous year benefited from interested income of INR 1.4 crores and a one-time stamp duty reversal of INR 7.2 crores, partly offset by professional fees of INR 1.6 crores. The net impact of one-time items in Q1 FY26 was INR 5.6 crores. Depreciation and finance costs remain largely stable, with a marginal decrease in depreciation to INR 21.9 crores from INR 22 crores in Q1 FY26, and a slight increase in finance costs to INR 1.8 crores from INR 1.7 crores in Q1 FY26. Consequently, profit after tax declines of INR 17.4 crores in Q1 FY26. to INR 12.8 crores in Q1 FY27. As on 30th June 2026, at the Consolidate level, Borosil Limited maintained a strong balance sheet with investments, cash and bank balances of INR 56.2 crores against total debt of INR 155.2 crores, resulting into net debt position of INR 99 crores. Now, let's take a closer look at our category-wise performance for Q1 FY27. Borosil's consumer business continues to expand across both glassware and non-glassware categories under the Borosil brand, along with our Opelware range under the Lara brand. The Lara Opelware segment reported sales of INR 83.6 crores in Q1 FY27 versus INR 76.2 crores in Q1 FY26. Lara's performance in Q1 FY27 reflecting a 9.8% growth over the same period last year. In our glassware segment, which includes borosilicate microwavables, serving ware, glass tumblers, lunch boxes, and storage solutions, we recorded double-digit year-on-year growth of 16.8%, with revenues reaching 65.6 crores in Q1 FY27, compared to INR 56.2 crores in Q1 FY26. The non-glassware segment comprising a diverse portfolio of small home appliances, infrared bottles and flasks, cookware, and other kitchen essentials registered a marginal growth of 4.2% with a turnover increasing to INR 98.1 crore in Q1 FI 27 from INR 94.2 crore in Q1 FI 26. BIS compliance requirements continue to impact sales of our Hydra range. The company has recognized these headwinds and has proactively shaped its strategy to mitigate their impact. The successful commissioning of the Hydra plant with commercial production commencing on two double-walled lines during Q1-FI27 is a significant step forward. This will strengthen our supply chain and provide greater control over product availability and compliance requirements going forward. Despite these challenges, the height of our factory, the overall impact on the non-glassware segment was more than offset by strong growth in other categories, particularly domestic appliances and stainless steel cookware. Boros is on a transformational journey to address key ESG opportunities and create long-term value for our customers. A strategic priority for us is lowering our operational carbon footprint and meeting decarbonization targets. In line with this, we have successfully commissioned two captive solar power plants in Beekanir, Rajasthan, 8.6 megawatt peak in December 2023, and 7.2 megawatt peak in September 24. Building on this momentum and with the introduction of Green Energy Open Access Regulations 2025, we commissioned a third captive solar power plant in Beacon Air during Q1 FY27 with a capacity of 20 megawatt peak integrated with battery energy solar systems. As a result, solar power now meets about 61% of our overall energy requirement. We are further evaluating opportunities to set up an additional 6.5 megawatt-peak captive solar plant at Borussia Limited and another 3 to 4 megawatt-peak plant at Stylenest India Limited to meet the power demand of our HITA facility. These initiatives reinforce our commitment to sustainability, energy independence, and long-term value creation. In Q4 FY26, the Board approved a new glassware manufacturing project at Dharuj. The company currently generates sales of approximately INR 100 crores through sourcing of drinking glasses, storage jars, jugs, and bottles from BSL's Baruch plant. Recognizing the strong growth potential in categories such as jars and bottles, the board has sanctioned the establishment of a dedicated manufacturing facility at Baruch Bizarat. The project involves an estimated capital expenditure of INR 42 crores. This strategic investment positions us to strengthen our presence in high-growth glassware categories and capture greater value through in-house manufacturing. The project is progressing as the plan and expect to commission by end of Q3 FY27. In Q4 FY26, the board also approved expansion of borosilicate pressware glass furnace from 25 tons per day to 32 tons per day at Jaipur with an addition of third forming lines. The existing bolesilicate class furnace was split up in Jan 24 and is due for rebuild in Jan 28 in the normal course of operation, whereas the current furnace utilization level is 90%. Hence, the board approved expansion with third additional forming line with an estimated capex of INR 50 crores. This capacity expansion will help company to remove capacity bottlenecks, improve operating efficiency, lower production costs, and enhance competitiveness. It will further help to improve product diversification and portfolio expansion. The project is progressing as per plan and expect to commission by end of Q4 FY28. The thermo-ware range has been introduced to cater to the everyday needs of school and college students, offering convenient solutions for carrying beverages and meals from home. The collector includes a vibrant range of internet bottles and lunchboxes, tickets designed for convenience, durability, and style. Additionally, Borosil is expanding the category with insulated casseroles, specially crafted for new homemakers to help keep food warm, fresh, and ready to serve. Borosil is at the forefront of India's transition towards healthier, eco-friendly kitchens. We are replacing plastic with microwave-safe, BPA-free glass, and stainless steel products that combine safety with sustainability. Rising incomes and fueling health awareness are accelerating adoption, while our aspiration Educational designs, educational marketing, and emphasis on hygiene and elegance are helping us convert plastic users and set new benchmarks for the modern kitchen. This strategic focus not only strengthens our leadership, but also aligns Borosil with evolving customers, lifestyles, and values. Our omnichannel presence across general trade, modern retail, leading e-com platforms like Amazon, Flipkart, and Borosil.com, Leading quick commerce platforms like Blinket Set, Repto, and Swiggy, along with strong V2B and export channels, has delivered deep market penetration. Today, with products available in over 24,000 retail outlets, we have built a diversified revenue base that connects with both urban consumers and global markets. In summary, despite near-term challenges, both have strong brand equity, diversified portfolio, expanding manufacturing base, and omnipotent reach positions as well for sustainable growth. With that, I would be happy to take your questions. Thank you.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Anu Parak from Anandrathi. Please proceed.

Yeah, hi, sir. So, my first question is on the glassware division. So, can you please bifurcate the 16.7% growth between how much was price-led and the volume-led growth?

Yeah, hi. So, frankly, you know, the glassware portfolio is a large portfolio. It will be very difficult to buy for, you know, for example, exactly the price rate and the volume rate growth. Like I said, we have, you know, passed on the cost increases to the market, but at this point in time to apportion in a manner would be quite difficult. Anil, you want to comment?

Okay. Yeah.

So, in the glassware section, during the first quarter, primarily this is led by the volume growth, you know, the price pass-ons have been with a lag. So, this particular category is all volume growth. So, it's not driven from the price.

Okay. So, as you said that the price impact will come with a lag. So, how much price has we taken in Q1?

So, if we

compare this with respect to the west Asia of on-flipped impact probably, so the price that has compensated in the first quarter is very less. That's about a couple of crores versus the overall impact of about 12 crores in the overall affairs of the sales. So, I think we have to wait and watch probably once the price is passed on. So, there will be some lag that we will see. In the coming quarters, I think we will see the impact.

Yes, sir, but can you just give us a range of the price hikes that you have taken?

So, it's like this, you know, the entire cost which has, you know, increased that we got, we have factored in the entire, you know, cost, passed on the entire cost to the market. The question is of, you know, getting it realized, there's always a lag, so that will come in time. So, it ranges between, you know, 5 to 7 percent depending on the category. In some cases, it could be even more than 5 to 7 percent. So, it's not a standard price increase. Okay.

So, sir, like we don't give margin separately. So, did we face margin pressure in Q1 in the glassware division? And if so, then is it, was it due to the impulse cost inflation or China dumping?

No. So, it's like this. Yes, we did face margin pressure in the Q1. Essentially, like I said, it was on account of the West Asia, you know, crisis. And like I mentioned, the impact from fuel and packaging has been the highest, and that we will try to offset, you know, in terms of the pricing in the market.

I understand. So, sir, in terms of ADD on the boros, we'll get glassware products. So, what is the status of the same?

So, at the moment, the investigation is on, and it is pending before the appropriate authorities.

Okay, sir, next on the Opalware, so in Opalware, can you bifurcate the revenue growth in terms of price-led or volume growth, or it was also more of volume-led growth?

So, in this category also, again, this was essentially volume-led growth. So, we've been able to, you know, get higher volume growth in this category also, like the glassware category. There's hardly any price-led growth in this category.

And any price heights taken in this category?

We have taken price heights in this category also, but like I said earlier, the realization of the price heights will come in going forward from Q2 onwards.

Okay. So, like, we are seeing that the margins were under pressure, even for, like, La, Opala and Q1. So, are we facing similar pressure in this segment? And so, if so, then what could be the reasons and what will be the sustainable margins going forward?

So, look, the margins are the pressure, like, due to West Asia conflict. The reason remains the same across the categories, whether it is opal or glass. And even in the steel and cookware, like, you know, you see the pricing, the commodities all have had a pricing issue. So, it's been across the categories. It's called that only for one category we had this.

I understood. So, and, sir, the sustainable margins in the opal were category?

So, we don't categorize margins. At an overall level, we are still confident that, barring aside the West Asia conflict impact probably, we are good to maintain about 18 to 20 percent EBITDA margins on the overall business.

Understood, sir. Thank you so much.

Thank you. A reminder to all participants, anyone who wishes to ask a question, may press The next question is from the line of Akshet Mehta, from 7 Rivers Holding. Please proceed.

Thank you for the opportunity. I have a few questions. So, as we said earlier that we are okay to maintain 18-20% margins barring any impact. What is the kind of expectation that we should have for the current tour in F207? And what is the kind of case that we are doing in F207?

Sorry, so you have two questions. One is on the margins. Are you speaking of the EBITDA margins? Yeah, EBITDA margins. Oh, I couldn't hear you. You're saying our spectrum of 18 to 20%, right? Yeah, but that is for a medium term, right? I'm asking for FI27. You're asking for? Sorry?

I'm asking for this year for FI27.

FI27, yes, you know, it remains, that remains about 18% EBITDA margins.

Okay, and what will be the Capex item?

Capex, Anand, do you want to add?

Yeah, so the... Capex for this year is anticipated to be about...

Sir, can you please come closer to the device? We can't hear you.

So, can you hear me now?

Yes, sir.

So, the total Capex for Fi27 is estimated to be about 125 crores, which is for the two glassware projects. One is the expansion of borosilicate glass furnace, and second is the VARUJ facility for the glassware, and also we might do some solar projects further going forward, and some maintenance capex on the furnace rebuild for opal glass furnaces, which is going to come for rebuild in this year. So the overall capex will be roughly 125 to 150 crores.

Next question is on the depreciation transfer. What is the level of depreciation that we should expect for the current year?

So, currently, our overall depreciation would be approximately 92 crores, including stainless at a console level.

Okay. So, you said the utilization for Glassware is around 90%. What would be the utilization for Opalware, and how do you see, you know, the revenues for both of the segments, you know, panning out for the rest of the year?

I think Opalware also, we have full capacity utilization. I mean, like I said, for Glassware, it's 90%. It's similar for Opalware. And your other question, I didn't get, actually.

I just want to get a sense of how do you see the revenue moving for both the segments, Glassware and Opalware, for the rest of the year?

So, we expect, you know, growth to happen in both the segments, in both of Glassware and Opalware. Like you saw in Q1, Opalware, you know, is volume-less dose and similar to the case of Glassware. So, we expect to maintain the momentum. Sorry, we can't hear you clearly. No, no, you cannot, you know, have the same thing for both. I would say, for example, for Opel, where we had about 9%, you know, in Q1. So, I think a fair estimate would be around the same, you know, going forward. We'll see how the market goes, but we would, you know, continue to grow, it's for sure.

Okay. Thank you. I'll come back and meet you.

Yeah, sure.

Thank you. A reminder to all participants, anyone who wishes to ask a question, may press star and one on their touchtone telephone. The next question is from the line of Jasdip Balia from Clockwine Capital. Please proceed.

Hi, sir. Thanks for taking my question. So, in the last quarter's call, you had mentioned about Chinese competition dumping products in the market on the borosilcate glassware side. So, what's the status on that? Have you seen a reduction of competition given that rupee has depreciated? And maybe in China, we have seen the governments giving back export incentives. So, if you could comment on that.

You're right, actually. This is what last quarter we had shared. And unfortunately, this continues to happen. And despite, you know, depreciation of the rupee as well as the shipping freight rates going up, I would say in the market, you know, we are not seeing much of a difference as far as the Chinese dumping is concerned. That answers the question.

Got it, sir. So if that's the case, do we see, let's just scale down of the normalized margins that we were expecting in the borosyctal silicate glassware business when you scaled up to, let's say, 90-100% kind of utilization levels at your furnace? I believe earlier, our estimate was that this business would achieve 25-30% kind of bidder margins. So, would you be able to achieve those kind of margins at reasonable levels of utilization or, you know, because of this incremental competition, there's a significant reduction in the normalized margins that we used to expect from this business?

So, it's like this, that, you know, it's not about one quarter. If you look at our performance, so we have been, the primary object of ours has been to expand the glassware market, right, unlike the other players. So, in that case, significant investments also we have made. So, it's not only on account of, you know, the price is only one part of it, but we have been building this market in terms of adoption by the end consumer. So, and as, you know, of course, in the call, it was mentioned that the investigation on the anti-dumping thing is going on. It depends upon a lot of other factors, and we'll see how it goes.

Got it, sir. Let's say if this current status quo persists, what kind of margins, EBITDA margins, can we expect in the borosilicate glassware business?

Sorry, we don't share a category.

Got it, sir. Also, sir, on the solar power side, what kind of incremental savings do you expect in FI27?

So, FI27, the overall savings from the solar with the phase 3 implementation that we have done so far, that will be about 27-28 crores at EBITDA level.

Got it. And should we assume it would be straightaway addition to EBITDA or maybe you could use those savings to, let's say, reduce prices to drive growth in some of your other businesses?

Some of the projects we have done earlier also, it is only the phase 3 that has been added this year from quarter 1, so solar has always been there, but definitely we will leverage this opportunity in terms of getting more competitive as well as basically increasing our margins also.

Got it. So what kind of net savings we should assume for next year out of this 28 crores?

See, at the moment I think it's too hard to comment on this. We'll have We have to see how the market behaves, probably, and accordingly, we have to see that what needs to be passed on and what needs to be retained.

Got it, sir. And, sir, does first quarter have any contribution on growth side because of inventory stocking by the channel? Because of all this input cost inflation, you have taken price increases and maybe the channel has stocked up before the price hike. So, this first quarter's growth, which we have seen, has some benefit on account of that, and maybe in the forthcoming quarters, the growth will be lower. Is that the right way to interpret?

No, I don't think that's the right way to interpret because, like I said, the price impact will come in Q2. So, there is no question of, you know, like a forced sale or, you know, retailers, you know, adding up to the inventory. So, that would not be the correct way to view it.

Got it, sir. And also, the last question, could you give us an idea of what kind of movement have we seen on the inventory levels from fourth quarter to first quarter? Has there been liquidation of inventory?

So, typically, you see, the inventory gets added. Inventory goes up primarily for the reason that we are heading into the season now, you know, the Diwali season. So, that is an addition to inventory, and the reason is that, you know, you build up the inventory for new products, and portfolio gets enhanced, expansion happens. So, typically, that's every year, that's what happens.

Got it, sir. And, sir, this final question, sir, you mentioned your guidance of around 18% EBITDA margin for the overall business in this year. Have you assumed any contribution from, let's say, favorable anti-dumping duty investigation by the government, or this is if the status quo persists?

I mean, like Anand mentioned, the investigation is going on, so that would not be, you know, a reason to attribute to it. Got it, sir. Thank you a lot, sir. That's all for my sake.

Thank you. A reminder to all participants, anyone who wishes to ask a question, may press star N1 on their touchtone telephone. The next question is from the line of Bresham Mehta from GreenEdge Wealth. Please proceed. Yeah, thank you. So, when you say 8% of it. Ma'am, we can't hear you properly. Can you please be a little louder?

Am I audible?

Yeah, much better.

Yeah, first, let's get in with the margin guidance. Does that include other insights?

Sorry, we can't hear you. You are breaking out.

Ma'am, your voice is cracking. Can I please request you to rejoin the queue? Thank you. The next question is from the line of Anu Parak from Anandrathi. Please proceed. Yeah.

Hi, sir. Thanks again. So, you said that we'll be doing an EBITDA margin of 18% for FY27, which implies an ask rate of more than 20% margin for the remaining nine months of FY27. Whereas, historically, the margin has been in the range of 15-16% over the past four years. So, sir, what gives us the confidence of this 18% margin?

I think, yeah, I think the way to read this or, you know, to interpret this. Sir, we can't hear you. Jutrath, sir, are you there?

Ladies and gentlemen, the line for the management got disconnected. Please stay connected while we reconnect them.

Hello? Hello, can you, am I audible?

Yes, sir, please continue.

Sorry, sorry, the lady mentioned, sorry, can I, can you, can I just get the lady's name once again, mention?

Anu Parak.

Anupar, sorry, like you yourself mentioned that historically, you know, it's been about 14 to 15%, right? This is what you mentioned. And what I meant was that we can look at about 18% in a steady-state business, you know, without the West Asia impact. So, this is how it should be taken. Because, and you are right, I mean, broadly, it has been 14-15. And without the West Asia, in fact, in a steady state kind of business, is what we would look for.

So, hopefully, that terrifies.

Got it. So, given the price hike that you have taken in glassware and opalware and Q1, and given the current raw material prices, how much margin improvement can we expect over the next two quarters?

So, it will be very hard to put a number to it, like, you know, but the fact remains that we have passed on the price hikes, and we expect Q2, Q3 onwards, the realizations to kick in. And also, it depends on a lot of other factors, like we have definitely seen gas prices, you know, coming down, the fuel price is coming down. There has been improvement there. But to put a number to it, immediately would be very hard to do that.

So, just to add on this point, I think what we have seen as an impact, maybe roughly we have seen about a 6 crore impact on the fuel prices in our operating business, and currently at the current levels, probably what we see is that that impact could reduce to maybe about 1.5 crore a quarter, and even on a similar borosilicate business, the impact due to fuel that was seen around 2.5 crores a quarter probably, that could come down to maybe about 60-70 lakhs a quarter. So, frankly, it's too hard to put a number because, you know, the market, the input cost inflation is a bit fluid at this moment.

Understood. So, lastly, on ROC profile, so we see that Borosel is a very strong brand, has a strong brand value in the market. But the company's ROC profile has been weak at around 10% level for the past, like, four years. So, what is the reason for the same, and what kind of sustainable ROC the company targets over the medium term, and how are we looking forward to reach to that level?

See, Borosil has been investing heavily into capexes in the last 3-4 years. If you look at maybe the last 3 years, we have increased our capacity on Opelware Funnels, we have invested into Borosil Glass Funnels, we have been heavily investing into solar, so all of this is a subset of that. But I think going forward as we enhance our capacity utilisation and improve our margins, I think we should definitely look at basically 20-24% grossly margins on the business.

But sir, we are already operating at high utilisation level currently. So what are we missing?

It has been basically, you know, maybe better in the coming, in the recent quarters probably. So we are sitting on huge inventory also which is under utilised only on the capacity. So, that further acts basically for capital employed. So, on a specific business, yeah, we'll definitely improve the ROC.

So, just to add to Amr's point, if you'll notice from the last, you know, one or two years, a lot of inventory we had to build on account of BIS challenges, which happened in Hydra also, which happened in our appliances business also. And in both the cases, we have, you know, ensured to move production to India, you know, manufacturing. So, on the one side, we had to build inventory. On the other side, we had to also invest in manufacturing. So, that's one of the major factors which is contributing to our low rolling.

Okay, sir. Thank you so much. Thank you.

The next question is from the line of Bhavin Rupani from Investec. Please proceed.

Yeah, hi. Thanks for the opportunity. So, first question on EBITDA margins, you spoke about 18% to 20% EBITDA margins. So, does it include other income or it is excluding other income?

Excluding other income. Yeah, and just also, once again, I would like to clarify, like, you know, to the lady also had said, so about 14%, 15% in a steady state, sorry, in a business, and we are looking at improving it towards an 18% kind of EBITDA margin, you know, without the West Asia conflict. I mean, just to clarify and to put the context right.

Right. So, sir, also, if you look at our EBITDA margins, excluding the impact of West Asia, we have done really well. So, would you like to call out for any reduction of expenses which we are structurally doing and one can expect cost reduction going ahead?

So, there are a number of factors, actually. Like, you know, Anand mentioned one of the things was on the solar savings which has come in. The other is, you know, we have high realization SKUs we have sold, and we have better in Glassware and Opalware, both. I think some of these things have also contributed to our effort.

Anything on cost reduction that you would like to highlight, sir? Sorry, on? Any cost reduction measures? On cost reduction, apart from solar?

So, in terms of cost reductions, also, like, typically, when you sell a portfolio, Then, items contributing to a lower gross margin and all, you know, getting discontinued is also part of the process. That's also part of the cost reduction effort, you know, which goes on.

So, second question on Opelware. So, what is the proportion of our Horeca versus B2C?

No, we are not, you know, structured for Horeca. That's not the focus area for us. So, essentially, Horeca is very, very minimal.

Okay. So, by Horeca, I mean, sir, whiteware. So, whiteware would be less than 5% for us?

Sir, whiteware, maybe, whiteware, in fact, we do not have a channel for Horeca is what I meant, meaning a distribution channel for Horeca. Yeah, that's what I meant.

Okay, so, let me reframe my question, sir. What would be our whiteware versus normal?

Contribution of whiteware to normal? So, I think, Anand, how much would that be in terms of percentage?

So, Bhavin, our overall contribution to the white fare probably would be in the range of about maybe 10% of the overall sales on the Opal Vare.

And what was it last year, sir?

Less than 5%.

Okay, so this category has grown by almost 100% this year. This is how one should understand, right, sir?

But it's too small of a base from that point.

Okay, and any plans to chase this going ahead? So, do we plan to maintain this ratio going ahead? And how are the margin differential between the whiteware and the normal business?

So, you see, the whiteware essentially caters to a specific segment. And in terms of, so, I mean, we would love to maintain the current ratio, meaning at 10% also, like you said, you know, it will represent a higher contribution. But in terms of margins, this is far lower than our regular range or, you know, the decal rate. So, hence, you know, one doesn't particularly, you know, move up the contribution of pipewear. Okay.

So, next question on distribution. So, we have opened a couple of exclusive stores. Just trying to understand the rationale behind this move. And also, do we have any incremental plans to increase the store counts going ahead? And what is the KPIC that we need to incur to open the stores?

Sorry, I lost you. Do we have more? You said something. Exclusive stores. Exclusive stores, sir. I mean, so we just launched our first, in fact, stores in Gurugram and Pune. And the rationale is very simple that we wanted our end customers to come and experience the brand, you know, and the kind of range that we have under one roof. And so, I think the kind of visibility it gives us and the opportunity for the customers, the consumers who come and interact with the brand is a major reason to be out there and, you know, put up our own brand stores. So, that's the rationale. And second, sorry, what was the second part of it?

Any target that you would like to put on over here? Any number of stores that we plan to open? And what is the key things that we incur to the stores?

So, we haven't had any target in terms of, say, the count, the number of stores that we want to put up, and if you look at the cities also, how we have things, we have done in Gurugram, we have done one in Pune, and next we definitely have one in Jaipur lined up. So, it's a process where we are also trying to, you know, put up and see how it goes and learn from the experience. And then maybe we can give it a shape in terms of, essentially in terms of having a scale to it, that is something we are yet to, you know, close in. Aran, on capex, if you want to mention, what kind of capex we have done?

So, Bhavin, it depends on store area to area, but typically in the range of about 40 to 50 lakhs each store.

Fair enough, okay.

So, last question on gas prices.

So, what proportion of our total cost is gas in case of Opalware and Glassware? And how much of it is being already passed on to the customers? And also, if you can specify, so you spoke about it has been passed on in a staggered manner, or it has been passed on usually in Q1 and Q2. So, is it possible to specify, is it after May, June, when have you taken the price hikes?

So, the first part regarding price hikes were, you know, we had announced in the month of April itself. In terms of actual execution, it starts from mid-May, and then, you know, by the time the material reaches, etc. happens. That's what I meant by saying that the realizations will come in from Q2 onwards. That's the first part to your question. On the second part, I think you want specific how much is the contribution of gas, you know, in the business? Is that the question?

In Opelware and Glassware, what proportion of cost is...

What proportion of cost? Okay. So, in total, Anand, you want to take this?

So, if you look at basically the first quarter last year, the fuel would have been maybe about 2.9% of the overall sales, and this year is about 5.8%. And at an open-air level, maybe fuel cost on a steady-state prices would be about 4%, and on the glassware, it could be around 5.5%, without the best issue impact.

Fair enough. Okay.

All right. Thank you so much.

Thank you. A reminder to all participants, anyone who wishes to ask a question, may press star and one on the touch-to-one telephone. The next question is from the line of Pranay Roop Chatterjee. Tom, Berman Capital, please proceed with your question.

Hey, thank you. Am I audible? Yes.

Yes, sir.

Yeah. My question is on the two Hydra lines that came in in June. How much time do you foresee to, you know, figure things out in the line and, you know, actually start churning out sellable products by any timeline?

So, Pranay, we already have started and declared the commercial production on the 30th of June, and already we are getting sellable material from the two double-walled banks. Okay, okay.

So, I think that answers the next question then, that we should be in a good place before Diwali is talking, and we shouldn't miss out this time, right, on the Hydra segment?

I think, yeah, that's a fair thing to say, that we would be in a much better position.

Got it. Thanks a lot. Those were my questions. All the best. Thank you.

Thank you. The next question is from the line of Devaraj Jatia from Seven Reverse Holdings. Please proceed.

Yeah, hi. Good evening, everyone. You know, I was just, I'm fairly new to the company, so I'm just trying to understand a little bit more around the capital allocation decisions over the last few years. You know, in FI24, we invested 197 crores. In FI25, we did a CAPEX of 97 crores. In FI26, we did a CAPEX of 136 crores. In FI27, we plan to do a CAPEX of 150 crores. But as per the presentation put forward by the management in Q4, operational ROCs have been 11.5% in 25%, 10.7% in 26%. And at least I have not seen any data over the last five years where the ROC has actually exceeded more than 14-15%. So, what I am trying to understand that, I mean, is there, like, what's giving you the confidence to allocate that much capital even this year to further capacity or for solar investments, you know, when, at least in the past, you've not been able to generate a certain degree of ROSI, or is this the ROSI expectation, you know, investors should have moving forward?

So, in fact, it's not one question. So, in terms of ROSI, the number you're looking at, or in terms of capital allocation, you're asking? I mean, capital allocation, yeah.

Yeah, I mean, I'm asking on the rationale for capital allocation, which I believe is a function of ROSI, as mentioned by the CFO of the earlier calls.

Yeah. So, like you mentioned in the past, say, four or five years, if you look at the journey in terms of from each of the categories that we operate in, whether it's been glassware or opal or the hydra, the two double-walled lines that we have put up, now, all of this, you know, has its own cycle to build the thing. And it's not a question of every quarter or a year. So whether it's the, you know, that's where, like, 25 tons per day borosilicate glass pounds when we put up or the 42 metric tons per day opal where we put up, which then became 84 metric tons. And similarly, from 25 to 31 we'll put up. Like I said, we've been building the market. So it's not about what rosy will be in this quarter or for the, you know, for the year. And you have a horizon, which wherein, basis which, you know, you build the market. And if you look at our journey, we have been having a cager of more than 21% over the last, you know, 10 years. The business has shown this kind of a growth. And then we also, like, in the call itself, you know, we said one of the challenges was the BIS, for example, And we had to now put up a manufacturing plant for the double-walled vacuum bottles, etc. So, this does need capital. And in terms of production, the ramp-up happens. It has its own cycle. So, it's not the number that will deliver, but going forward, like Anand mentioned during the call, that we definitely are looking at 20-22%. Am I right, Anand? I think you want to add something to this?

No, no, that's right. I think in the last two, three years, probably, if you have seen, we have been investing heavily into manufacturing facilities, probably. And as we move forward and we scale ourselves, probably, we will definitely see improvement in the margins and the overall ROC. Initially, what happens is, basically, due to heavy capexes and the depreciation element, probably, Initially, the businesses are seen with a lower ROC, but definitely this will improve going forward.

So, I mean, can you help us understand the bridge? I mean, what's going to get you from the current 11% ROC and FI26 to a 22% ROC? How is that going to be bridge? Is it just purely a function of depreciation waning off? Is it a function of, you know, your margin improvement? Can you just help us quantify and bridge that number, please?

So that number is not an immediate number. It's a medium term, is an aspiration probably where we're going to reach. And of course, there are basically ways and means to achieve that. I mean, one you rightly mentioned, one is that scaling basically in terms of capacity utilization, enhancing our capacity on the borosilicate ware and the glassware that we are setting up. We are seeing good traction in those categories where we are trying to do more capexes around. Solar is an initiative where probably it's a 25-year project probably where you put up the capex and then you enjoy the benefits over the next 25 years. Of course, the paybacks are much earlier probably in the next three to four years. But you look at the overall number. So, so far we have invested around 130 crores into solar facilities also, where you see that at least the 30 crores basically at an EBITDA level, the savings. So, all of these initiatives will definitely help us improve margins going forward. And of course, as we scale, there are many fixed costs where we will get leverage on. Like your warehousing, it's all fixed. It's not variable at any point of time. So all of this will help us basically margin expansion as well as basically improving our ROSI margins.

So while you did guide for an 18% to 20% EBITDA margin for this year, if you achieve that EBITDA margin, what would be your ROSI profile for this year? And I mean, the aspiration of 22% ROSI is that, I mean, in what time frame are you looking to achieve that?

So, Dave, at the moment, the market is very fluid because, you see, the first quarter, we just had a big impact on the West Asia conflict. So, we also mentioned that we have passed on certain prices. There has been some lag, and, of course, it doesn't happen immediately. And the prices have started settling, while the fuel prices have settled meaningfully, but we still see the petroleum products on the packaging and so many other places, the prices are still the same. It's not settled anyways. So we still need to see. I think the broader idea is basically to improve margins, maybe 18 to 20 percent is the guidelines probably. Whether it's going to happen this quarter or next quarter is not something that, you know, at the moment we can comment. But yes, I mean, that's the whole idea.

I just want to add, Anand, one more point. The 20% number came from the gentleman who had asked the question, but I just want to clarify that, like, you know, from 14-15 to 18% is what we would look at in a steady state business without the West-Asia conflict. Just to clarify.

Sorry, so maybe I've misunderstood it, but is the 18% margin guidance for FY27, or is it an aspiration that you plan to, you know, you plan to achieve in the next couple of years?

So that's what this year we wish to achieve.

Okay, so then, okay, perfect. So then if you're able to give a guidance on the margin, on the EBITDA margin, then what, I mean, why are you not able to give a guidance on the ROSI?

Anand, you want to add to that to explain him further? will not remain the same.

Sure, thank you.

Thank you. A reminder to all participants, anyone who wishes to ask a question, may press star and 1 on their touch-tone telephone. As there are no further questions from the participants, I now hand the contents over to the management for closing comments. Over to you, sir.

Thank you, everybody, for your time and the questions, and thanks.

Thank you. On behalf of IAACI Securities Limited, that concludes this conference. Thank you for joining us and you may now disconnect with us. Thank you, everyone.