INVESTMENT RESEARCH

FUNDAMENTAL COVERAGE -BOROSIL GLASS WORKS LTD.

Dated : 26/08/2015

Rudra Shares & Stock Brokers Ltd

BUY
Price`
Fair Value
Upside
Div Yield
Tenure
Sensex
Nifty
Group/Index

Investment Rationale
2286.25
2790.00
22%
1 Year
25714.66
7791.85
B

BOROSIL- Famous for high quality, performance & into creating beautifully designed products that
work for every day as well as on special occasions.
company compete with the best in the world, and the BOROSIL brand is recognized and
respected globally as one that is dedicated to quality and value addition in every undertaking.
Borosil's labware is used in school laboratories across the world to help ignite curious minds by
allowing them to experience the magic of chemistry. Co.'s products are used in all major research
centers & pharmaceutical laboratories for cutting edge experiments, which help develop life
saving drugs. The co.'s laboratory ware is also used by the Bhabha Atomic Research Centre &
other nuclear & defense research institutes, where accuracy is of paramount importance.
BOROSIL microwavable kitchenware has simplified the lives of generations of Indian housewives.
Its recent foray into the solar sector is yet another example of our commitment & passion for
making products that positively impact lives.
The Company in the previous year introduced HPLC vials and Liquid Handling Systems as
additional product categories. There is a vast market for the said vials and Liquid Handling Systems
and the Company is trying to carve a niche for itself.

Stock Details
M.cap (`in cr)
688.16
Equity (`In cr)
3.01
52 wk H/L `
2989/1480
Face Value `
10
NSE code
BSE code
502219

FY14-15 & Q1(2015-16) performance:BOROSIL Ltd. Mainly operates in two segments. Results of the two are as under: Scientific ware Division
The Financial Year 2014-15 has been a challenging year for SIP Division . However, the demand
from the industry especially pharmaceuticals enabled to register an overall growth of 17% over
the last financial year. The Exports resulted in 44% growth over last year i.e. from ` 4.29 crores to
` 6.19 crores. The Company has been able to export to many new geographies during the year.

Key Valuation Ratios

RONW
9%
P/E
11.5
P/BV
0.9
ROI
15.3%

Consumerware Division :The consumer products division has seen a growth of 10 % over the last financial year.
The Companys new range of products has been performing well. Apart from the product
categories introduced by the Company in the previous years namely, Melamine dinnerware,
Appliances and Home Dcor, the Company also introduced more items namely, Glass container
with lid under the sub brand Klip-n-store, Electric rice cooker as Digikook and Electric Kettles.
Exports of consumerware division during the year showed a marginal increase to ` 3.44 crores as
compared to ` 3.20 crores in the previous year.

EV/EBIDTA

6.6

The Company has made foray in the Middle East market through its subsidiary mentioned below.
This apart, the Company, during the year explored new markets in U.S.A., Nepal and Singapore for
its consumerware products as also looking for new export markets in Australia, Canada and Latin
American countries, amongst others.
Share Holding Pattern %
Promoters
DII
Bodies
Corp.
Others

Key Financial Data (IN `)

EV (`in cr)
543.06
2448.3
BV (`in cr)
NW(`in cr)
736.93
EPS (TTM)
198.7

FY15 & Q1(2015-16) Results:- Company has generated a business profit of ` 67.75 crores,
(including profit of ` 26.91 crores from sale of fixed assets net of expenses) (before tax &
exceptional items) during the year under review. Hence, its business profit for the year is ` 40.84
crores(FY 2015) as compared to ` 46.01 crores (FY 2014) (before tax & exceptional items) in the
previous year.
During the year, the Companys operating profit grew from ` 13.43 crores to ` 17.80 crores.
Market Cap. of the company have increased from ` 271.74 Crores in the FY 2014 to ` 492.53
Crores in the F.Y 2015, an increase of 81.25%.The overall exports of the Company during the year
were ` 9.81 crores as compared to ` 7.49 crores during the previous year.
Also, its scientificware division contributed around 57.98% to the total turnover and
Consumerware Division contributed 41.50% to the total turnover of the company.
The Board of Directors recommends a dividend of ` 25 /- per equity share for the year ended
March 31, 2015.
The Company reported Net Sales of ` 40.23 crores for the quarter ended 30th June, 2015 as
against ` 27.87 crores in the preceding quarter June, 2014, resulting in an increase of 44.35%. EPS
for the quarter is ` 48.48.

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Corporate Governance Transparency Ratio's

201503
201403
201303

VALUATION (` In Cr except per share)

Tax Rate %

23.04

10.89

23.85

19.54

FY 16 Est.
Earnings
Share

Receivable Days

46.00

67.60

72.80

72.30

Capital
FV

15.22

22.77

14.48

No. of Shares

Year End

Dividend Payout %

Quarter End

Share Holding Trend %

201506
201503
201412

Promoters HLD %

74.18

FII HLD %
DII HLD %

0.03

74.18

201203

Est. EPS

201409

74.18

74.18

1.93

0.03

0.03

0.03

Estimated P/E Ratio

Price /Share

52.49
10.00

3.01
0.30
174.40
16.00
2790.00

Subsidiary & Associate Companies

1. Gujarat Borosil Ltd. (GBL)
It is the first and only manufacturer of solar glass in India. Customers of this product include leading
solar module manufacturing companies worldwide. This plant is the first and only of its kind in
India, and has been developed specifically for the fast growing solar industry.
GBL is an associate company of BOROSIL and has a 25.25% stake in the equity shares of the
company. Also, it holds 100% of 9000000 , 9% cumulative non-convertible Redeemable Preference
shares carrying voting rights.
2. Borosil Afrasia FZE
The Company has a wholly owned subsidiary namely Borosil Afrasia FZE (Free Zone Establishment)
in Jebel Ali Free Zone situated in Dubai in United Arab Emirates (UAE).The said FZE is engaged in the
business of marketing the Companys products in
the Middle East and African markets.
3. Fennel Investment & Finance Pvt. Ltd.
It is the associate company of BOROSIL holding 45.85% stake in the equity share capital.

Quarterly & Yearly

Results

Company offers wide range of products. The various products category offered by the company is
as under:8 Scientific, industrial & laboratory Glassware: BOROSIL range of Laboratory Glassware
includes almost all items required in general lab usage. In fact, for a laboratory to get
ISO 9001 certification in India, it is recommended that it use BOROSIL certified A-class
lab glassware.
8 Consumerware: company offers wide range of products with respect to this division,
such as appliances range, Elega tumblers, microwaveable ,home decor, glasses and
many more.
8 Extra clear patterned glass: For Exterior & interior Architectural Appliances. The
company has top quality production line under this segment, imported from West
Europe incorporating latest technology.
8 Antimony free low iron solar Glass: This glass is used for multi and mono crystalline
solar photovoltaic modules.
8 Lightening: is used for a wide range of applications- general purpose lantern chimneys
for petromax lanterns, well glasses, safety lamp chimneys, explosion and dust proof
tubes for hazardous area lighting applications, high pressure mercury and sodium
vapour lamps for street lighting, defusers and diopters, both symmetric and
asymmetric, for airfield lighting.

S.No.
1
2
3
4

Particulars
Scientificware
Consumerware
Flat Glass
Others
Total

Segment Wise performance is shown as under:Quarterly results

Yearly results
%
30.06.2015 30.06.2014 % Growth 31.03.2015 31.03.2014
Growth
(Consolidated)
(Standalone)
21.18
14.73
43.79%
101.6
86.84
17.00%
18.75
12.85
45.91%
72.56
66.42
9.24%
150.47
0.3
0.29
1.04
2.69
-61.34%
40.23
27.87
44.35%
325.67
155.95
-

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Increase in
consolidate
d profits is
mainly on
account of
acq. of
GBL(Associ
ate co.)

Outlook & Future Plans

Scientific and Industrial products
The vision of SIP Division would be fundamentally based on the following:
1. New product introduction
2.Steady growth in existing product range
3. Tap the world potential for lab glassware
Consumerware Products:
1. There is a large market in consumerware sector, which the Company would be looking to tap by
adopting various products such as Soda Lime Tumblers.
2. In appliances, the Company plans to introduce Oven Toaster Griller (OTG) and other variants in
Mixer Grinders.
3.The Company plans to introduce more variants of printed glass tumblers and Soda Lime bowls.
4.The Company is focusing on utility based products like serving tray in steel and glass and glass
platters for dining table.
5. In Melamine range of products, the Company plans to introduce more designs and coloured
accessories like bowls, trays etc.
Company Overview
Borosil Glass Works Ltd. (BGWL) is the market leader for laboratory glassware and microwavable
kitchenware in India. It was established in 1962 in collaboration with Corning Glass Works USA. In
1988, Corning divested its share holding to the current Indian promoters. It is a glassware company
based in Gujarat, India. The company is one of the largest glassware producing companies in India
with a significant presence in USA, Netherlands and in India. It manufactures various products range
(as stated above) and offers to its customers the most dependable, safe and easy to use products.

Valuation Conclusion
USP ( Unique Selling Preposition) of the company:The Companys efforts for organic as well as inorganic expansion both in India and abroad
continues. The Company has expanded its exports to total 35 countries for the FY 2013-14. It
expects to add 10 more countries to its list in the year 2015-16.
Also, the company has acquired GBL (Gujarat Borosil Ltd.) , which has resulted in increased profits
during the year. BOROSIL is a cash rich company & its Unlevered advantage further adds positive to
the company. It has expanded its products & further added new products in its product line. The
company has also launched the HOME APPLIANCES range for its customers, influencing the living
standards of the people i.e. mainly into Urbanization.
The company has Low Equity resulting in high EPS , which is quite attractive. Also, its other income
is also too high.
However, we are valuing the estimated share price of the company on the basis of P/E valuation
(taking fair P/E Ratio as 16) . The Estimated share price turns around to ` 2790 (as stated above).
Therefore, we recommended to BUY the company's share.

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Quarterly Results (` in crore)

Particulars

LTM
187.40
82.90
5.40
77.60
76.90
0.30
77.30
17.50
59.80
(3.50)
63.30
198.70

Net Sales
EBITDA
Depreciation
Operating income
Misc.Inc (Exp.)
Interest Exp
EBT
Taxes
Net Inc(Reg)
Extraord. Items
Rep Net Income
EPS

201506
40.17
19.43
1.27
18.16
17.95
0.06
18.10
3.53
14.57
14.57
48.41

201503
55.85
18.51
1.25
17.26
18.81
0.07
17.19
2.98
14.21
(3.49)
17.70
47.21

201412
48.29
10.62
1.29
9.33
6.89
0.07
9.26
2.30
6.96
6.96
23.12

201409
43.08
34.37
1.56
32.81
33.23
0.05
32.76
8.69
24.07
24.07
79.97

Income Statement ( ` in Cr except per share)

Particulars
Sales
Other operating income
Total Income from
operations

201203
125.98
0.04

201303
134.40
0.07

201403
155.44
0.51

201503
324.30
1.37

2016E
360.24
2.19

2017E
406.96
3.73

2018E

126.02

134.47

155.95

325.67

362.43

410.69

469.69

Operating EBITA Margin

(1.39)

1.18

7.53

1.14

2.25

5.86

7.68

464.10
5.59

Profit & Loss

Total Income from
operations

126.02

134.47

155.95

325.67

362.43

410.69

469.69

Raw Material Cost

Employee Expenses
Provisions written off
Other Expenses
TOTAL EXPENDITURE
EBITDA
Depreciation

71.54
10.91
2.19
42.02
126.66
(0.64)
(0.75)

74.77
14.66
1.04
40.77
131.24
3.23
(2.05)

90.25
17.50
(6.29)
43.24
144.70
11.25
(3.72)

143.25
36.19
1.27
125.36
306.07
19.60
(18.46)

159.47
40.59
1.27
135.00
336.33
26.09
(23.85)

181.73
46.41
1.44
150.93
380.50
30.19
(24.32)

210.19
53.54
1.64
171.44
436.81
32.88
(25.20)

Rep.Profit before Other

Inc.,Fin.cost &excp.items

(1.39)

1.18

7.53

1.14

2.25

5.86

7.68

(1.39)

1.18

7.53

1.14

2.25

5.86

7.68

Other Income

42.00

25.13

34.47

66.33

69.65

76.83

84.29

Profit from Ordinary act.

before Fin. cost ,Tax &
Excep. Items

40.61

26.31

42.00

67.47

71.90

82.69

91.97

(0.18)
(0.18)
40.43
(7.90)

(0.27)
(0.27)
26.04
(6.21)

(0.50)
(0.50)
41.50
(4.52)

(2.16)
(2.16)
65.31
(15.05)

(2.66)
(2.66)
69.24
(15.58)

(2.76)
(2.76)
79.92
(17.98)

(2.99)
(2.99)
88.98
(20.02)

32.53

19.83

36.98

50.26

53.66

61.94

68.96

Minorities
P/L of associate Co.
Reported Net profit
Extra ordinary items
Rep. Net Income after
extra ordinary items

32.53
(2.72)

19.83
0.00

2.31
39.29
(3.88)

1.14
0.32
49.44
(7.63)

1.17
52.49
-

1.19
60.75
-

1.22
67.74
-

35.25

19.83

43.17

57.07

52.49

60.75

67.74

Dividend Paid
Retained earnings
Reported EPS
DPS
Payout ratio

(4.71)
27.82
103.60
15
14.48%

(4.52)
15.32
65.88
15
22.77%

(7.53)
41.92
164.25
25
15.22%

(10.50)
42.00
174.40
35
20.07%

(8.96)
51.79
201.82
30
14.87%

(8.13)
59.61
225.04
27
12.00%

3.01

3.01

3.01

3.01

3.01

3.01
10
0.301

3.01
10
0.301

3.01
10
0.301

3.01
10
0.301

3.01
10
0.301

Goodwill amortization
Rep. Income from
operations

Net Financials
Interest income
Interest expenses
Net Financial Items
Reported Pre-tax profit
Reported Tax charge
Reported Net profit
before Min. Intt.

EPS and Dividend

0.00
39.29
130.53
-

Number Of Shares
Opening Balance
3.14
3.01
Issued during the year
Closing Balance
3.14
3.01
FV
10
10
Wtd. Avg. no. of shares
0.314
0.301
Note:- The Figures shown in brackets means NEGATIVE.

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BALANCE SHEET
Particulars
Equity & Liabilities
Shareholders' Fund
Share Capital
Reserves and Surplus
Minority Interests
Total Shareholders' Fund
Non-Current Liabilities
Long-term Borrowings
Other Long term Liabilities
Deferred Tax Liability
Long term Provisions
Total Non-Current
Liabilities
Current Liabilities
Short term Borrowings
Trade Payables

2018E

201203

201303

201403

201503

2016E

2017E

3.14
620.52
623.66

3.01
624.22
627.23

3.01
656.46
659.47

3.01
694.86
24.49
722.36

3.01
736.86
25.66
765.52

3.01
788.64
26.85
818.50

3.01
848.25
28.07
879.33

1.33
-

0.69
3.39
-

19.07
12.93
0.32

20.00
12.93
0.35

22.00
12.93
0.39

24.00
12.93
0.43

1.33

4.08

32.32

33.28

35.32

37.36

other current liability

Short term Provisions
Total current Liabilities

8.44
20.86
6.21
35.51

1.79
9.45
12.53
6.55
30.32

5.62
15.78
8.28
29.68

4.04
20.44
34.22
12.47
71.17

4.04
26.28
38.08
13.72
82.12

4.04
30.80
43.15
15.09
93.08

4.04
36.40
49.35
16.60
106.39

Total Equity & Liabilities

659.17

658.88

693.23

825.85

880.92

946.90

1,023.08

Assets
Non-Current Assets
Fixed Assets
Tangible FA (Inc. WIP)

81.51

94.59

178.77

272.75

274.27

279.72

289.75

31.18

40.58

38.74

52.26

55.00

59.00

65.00

2.45
2.01
268.45
385.60

0.55
184
319.72

0.82
264.41
482.74

0.98
9.06
180.05
515.10

1.00
9.06
169.12
508.45

1.00
9.06
157.12
505.90

1.00
9.06
143.12
507.93

156.4
22.77
24.96

225.09
29.96
28.66

116.49
30.37
29.1

160.9
61.46
52.9

170
68.86
59.80

180
78.03
69.82

190
89.24
82.20

8.84

7.51

6.47

7.31

45.01

84.32

124.61

56.12

44.21

21.85

21.20

21.00

20.00

19.00

4.48
273.57
659.17

3.73
339.16
658.88

6.20
210.48
693.22

6.98
310.75
825.85

7.79
372.47
880.92

8.83
441.00
946.90

10.10
515.15
1,023.08

8.84
156.40
(165.24)
-26.50%

7.51
225.09
1.79
(230.81)
(65.57)
-36.80%

6.47
116.49
0.69
(122.27)
108.54
-18.54%

7.31
160.90
23.11
(145.10)
(22.83)
-20.09%

45.01
170.00
24.04
(190.97)
(45.87)
-24.95%

84.32
180.00
26.04
(238.28)
(47.31)
-29.11%

124.61
190.00
28.04
(286.57)
(48.29)
-32.59%

(17.15)
50.95
33.80
(18.46)

(25.37)
(25.37)
(23.85)

(29.77)
(29.77)
(24.32)

(35.23)
(35.23)
(25.20)

Non-current Investments
Long term loans &
Advances
Other Non current Assets
Deferred tax receivables
Non current investments
Total Non-Current Assets
Current Assets
current Investments
Inventories
Trade Receivables
Cash and cash
Equivalents
Short Term Loans and
Advances
Other current Assets
Total current Assets
Total Assets
Cash and cash Eqvlt.
Other intt. Bearing Asset
Interest-bearing debt
Net intt. bearing debt
Change in Net Debt
Net gearing (%)

Investments
Tangible assets
Gross capex
(74.97)
(31.94)
Sale of fixed assets
0.21
0.16
Net capex
(74.76)
(31.78)
Depreciation tangibles
(0.75)
(2.05)
Note:- The Figures shown in brackets means NEGATIVE.

(71.79)
0.13
(71.66)
(3.72)

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Particulars

201203

EBIT
Depreciation
Depreciation (ex goodwill)
Movement in Inventories
Movement in Debtors
Movement in Creditors
Movement in OCL
Movement in short term Prov.
Movement in Short term L&A
movement in other CA
Other WC increase/decrease
Change in working capital
Tax paid
Operating Cash Flow
Net interest
Cash Earnings
CapEx
Sale of fixed assets
Net CapEx
Free Cash Flow pre
dividend
Dividend
Free Cash Flow post
Dividend
Net acquisitions/
disposals
Net cash flow

Particulars

201203

CASH FLOW ANALYSIS

201303
201403
201503 2016E

2018E

42.00
3.72
3.72
(0.41)
(0.44)
(3.83)
3.25
1.73
22.36
(2.47)
(60.70)
(40.51)
(4.52)
0.69
(0.50)
0.19
(71.66)
0.13
(71.53)

67.47
18.46
18.46
(31.09)
(23.80)
14.82
18.44
4.19
0.65
(0.78)
(29.34)
(46.59)
(15.05)
24.29
(2.16)
22.13
33.80
50.95
84.75

71.90
23.85
23.85
(7.40)
(6.90)
5.84
3.86
1.25
0.20
(0.81)
(3.94)
(15.58)
76.23
(2.66)
73.57
(25.37)
0.00
(25.37)

82.69
24.32
24.32
(9.17)
(10.02)
4.53
5.07
1.37
1.00
(1.04)
(8.22)
(17.98)
80.81
(2.76)
78.05
(29.77)
0.00
(29.77)

91.97
25.20
25.20
(11.21)
(12.38)
5.60
6.20
1.51
1.00
(1.27)
(10.51)
(20.02)
86.64
(2.99)
83.64
(35.23)
0.00
(35.23)

(33.35)

(71.34)

106.88

48.20

48.27

48.42

(4.52)

0.00

(7.53)

(10.50)

(8.96)

(8.13)

(37.87)

(71.34)

99.36

37.70

39.31

40.29

(37.87)

(71.34)

99.36

37.70

39.31

40.29

2016E

2017E

2018E

6.2%
7.1%
2.2%
0.6%
19.1%
14.5%
0.42
1.33
0.49
4.5
3.7
0.5
56.8
70.7
24.8
102.7
0.5
-

6.6%
7.7%
2.4%
1.4%
19.5%
14.8%
0.45
1.48
0.52
4.7
3.9
0.9
57.6
70.5
26.7
101.3
0.5
-

6.9%
8.0%
2.4%
1.6%
18.9%
14.4%
0.48
1.65
0.55
4.8
4.0
1.2
59.1
69.9
27.4
101.6
0.5
-

RATIO ANALYSIS
201303
201403
201503

3.0%
3.2%
Return on equity
0.3%
ROCE
0.9%
EBIT Margin
19.4%
Pre tax margin
14.7%
Net Profit Margin
0.20
Total asset turnover
1.53
Fixed asset turnover
0.21
Equity turnover
11.2
Current Ratio
10.2
Quick Ratio
0.2
Cash Ratio
72.8
Receivable Days
73.3
Inventory Days
23.6
Payable Days
122.5
Conversion Cycle (Days)
0.2
Financial Leverage Effect
Debt to Capital
Debt to Equity
Note:- The Figures shown in brackets means NEGATIVE.
Return on assets

2017E

26.31
2.05
2.05
(7.19)
(3.70)
1.01
(8.33)
0.34
11.91
0.75
(18.40)
(23.61)
(6.21)
(1.46)
(0.27)
(1.73)
(31.78)
0.16
(31.62)

6.4%
6.7%
1.2%
4.8%
26.6%
27.7%
0.23
1.14
0.24
7.1
6.1
0.2
67.6
76.1
19.0
124.7
0.3
-

7.5%
8.3%
1.8%
0.4%
20.1%
17.5%
0.43
1.44
0.47
4.37
3.5
0.1
46.0
54.8
14.1
86.6
0.3
-

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