Borosil Limited

Stock Opportunities
21

Hi,

It’s indeed a good development. But there are certain things which I don’t like about this co. They are: -

  1. no profit from operations.
  2. only other income
  3. low roe
  4. all cash deployed in mutual funds

Now based on the above it becomes difficult to really value a company based on current operations. I would much prefer being given the cash than the co. investing in sub 10% returns. You could argue that the company is doing buybacks right. But if I stop and think for myself the current buyback is only enriching the promoters because 75% contribution is from the promoter share.
There’s nothing wrong in this even but I would have much preferred if the company announce a buy back when the share was languishing at 1500-2000 levels from June 14 to June 15. When the share price suddenly rose beyond 2500 they announced a buy back. This does not make any sense because although we might be getting more money too but it’s a criminal wastage of co money. The reason any company does a buy back is because they think there stock is undervalued. There’s no point in announcing a buy back when the stock has already risen 50% or more in quick succession. This recent buyback makes me feel that the promoters are very self centered than pro investors.

I might be too negative. Just giving my 2 cents.

22

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They are on a typical trading style (import and sell) mechanism for the last 3 years which is turning around now . This has impacted their avg margins of 12% to the current level extremities .(sub 5%)

The sad part is the company was just lying on cash for sometime without any valid use. That does show lack of opportunities or interest from management . Surprisingly the management has been active in the last 6-8 months , scouring for opportunities and aggressive aligned diversification(synergistic). They have plans to enter the highly competitive kicthen ware and kitchen automation areas.

Although they have strong brand name they are unable to sustain La Opala kind of margins, primarily because of their core products (glass ware) targeted at Labware.

The new acquisition looks like a fantastic move which would help increase the margins and show top line visibility in the coming years. Supplement this with low equity and free cash reserves and good management, refocuss on the consumer face the stock is just mouthwatering and too good to ignore.

Discl: Invested 20% of PF

I

I have been stalking this stock for the last 1 year , when this miraculously applied in one of my custom screener .

23

@Akshayag

Its good to be negative . Keeps the over optimistics in check.

Recent buy back does not indicate the promoters are self centered in any way(I think u might be wondering abt why not pay the dividend- Taxes-Its a huge cash pile is my opinions). Promoters esp with such a significant stake are more aligned to company objectives than normal stakeholders. Intuitively i feel the management has waken up from a deep slumber and they see a huge turn around in place and they have adequately compensated with a reasonable price rather than cornering them(shares) at a cheap price buy pouring in negative views

24

Concur with the wake up from slumber observation.

One needs to find out more about the Hopewell acquisition.

Why could such a rapidly growing company not find PE investors / bank support for cash flows?
Were they not focusing on profitability or sustainability / undercutting La Opala too aggressively to gain market share?
What led to the sale to Borosil at such paltry valuations?
Has Borosil taken any additional Hopewell Tableware liabilities on board?

And going ahead, can Borosil maintain the current 70 cr. annual sales with a healthy bottomline + sustained topline growth over the foreseeable future.

Am trying to get more inputs will update if I get reliable info.

1 Like
25

@Value_Seeker

All your questions are extremely valid. With a significant chunk in my portfolio i keenly track Borosil on a daily basis with Google news alerts,trends, BSE updates etc etc. We just need to scour more details on this.

In spite of all this your post on hopewell numbers is the only numerical detail available . Although honestly when you mentioned 70 crs i took it with a pinch of salt. It is tooo good to believe a company with 70 crs of top line being sold @ 27 cr(37 cr including capital infusion).

Looks like a special case of investing but lack of data is killing me . Waiting for this years annual report !!

Hope @thestocklady and other active contributors in this thread can work on some details

26

Dear @vistag,

The 70 crore annual sales number is mentioned in the filing of Borosil to BSE:

Hopefully there has been a thorough audit by Borosil and the sales numbers are genuine:

With best regards,

Aniket.

27

@Value_Seeker

Ha got it, classic case of missing the second page after the rubber stamp!

The numbers looks too good to be true ! This Hopewell is have 25% of La Opala’s revenue and market cap of 1/100 of La Opala? Still a mystery! Classic case of too good to be true! Looks like Borosil conveniently ignored all other aspects and just put up only the top line or they really made good out of bad situation!!

28

Borosil is at a crusp now. It can make it or break it this year! Keenly tracking the acquisition numbers and the synergy play to come into the picture by this year end!

However Hopewell need to compete with La Opala and other international brands pouring in into Indian markets , but strongly betting on Borosil’s brand play to help it take it to the next level. This stock will be a poor man’s La Opala in coming days (Vis a Vis Market Cap)

Discl: Significantly invested

29

hi
Have u got more inputs on the said acquisition. please share if any

30

No updates yet. Will be at the ceramic show next week when I will meet some of the tableware fraternity. Will post if I get any meaningful update.
cheers.

1 Like
31

Borosil has been up almost 25% in the last 1 month. Any news on the acquisition synergies?

32

This is a story that is developing, management has started making some marketing noise but consistency & tenacity will be the decider.

33

India Kitchenware Products Market Outlook to 2020 - Growing Exposure of Online Distribution Channels and Demand from Nuclear Families to Foster Growth

http://www.newsvoir.com/release/india-kitchenware-products-market-outlook-to-2020-growing-exposure-of-online-distribution-channels-and-demand-from-nuclear-families-to-foster-growth--5164.html

New Delhi, Delhi, India
Kitchenware Products Market is estimated to reach over INR 55 billion revenues by FY’2020.

Future Growth of Kitchenware Products Market is expected to be driven by emergence of web aggregators and rise in preferences towards branded kitchenware products

In the Kitchenware Products Market, the market has been dominated by TTK Prestige in Cookware segment, while Borosil Glass has continued to maintain the leadership in glassware segment.

Ken Research announced its latest publication on “India Kitchenware Products Market Outlook to 2020 – Growing Online Distribution Channels and Demand from Nuclear Families to Foster Growth” provides a comprehensive analysis of the kitchenware products market which primarily focuses on cookware, bake ware and glassware products. The report analyzes the kitchenware products market in detail and its segments by distribution channels, by end users, by product categories, by regional demand, by organized and unorganized sector and by rural and urban demand. The market for glassware, bake ware and cookware products have been comprehensively covered in the report with detailed segmentation, SWOT analysis as well as the market share and competitive landscape for major players in cookware, glassware and bakeware. The report also underscores growth drivers and restraints, porter five forces, major mergers and acquisitions along with the online kitchenware space with major entry barriers as well as competitive landscape in online market. The report extensively provides insights on investment required to set up plant in India with detailed company profiles for major players. The report also includes macroeconomic factors which have been analyzed to determine the future prospects of the Industry.

Till the early eighties, kitchenware in the average Indian home would constitute primarily copper, aluminum and stainless steel utensils; cutleries in the form of tea-cups, saucers and spoons; cookware of aluminum; plastic bottles to store spices, sugar, salt and edible oil. The only sophisticated cookware was perhaps the pressure-cooker. Gradual changes were seen with stainless steel utensils replacing copper and aluminum. The microwave made a grand entry in a number of kitchens in mid-90s, and then newer utensils and storage vessels started forming a vital part of the Indian kitchen. From the traditional to modern kitchens in India, the kitchenware products have always been into existence as a major product category in the market place. Cookware segment has been the major contributor towards the growth trajectory of the overall Kitchenware products market. It mainly includes products such as Pressure cookers, induction cookers and other cookware products which are used in Kitchen. The share of the cookware segment has always been more than 70% across the period FY’2010-FY’2015 and has enhanced from FY’2010 from ~% to ~% during FY’2015.

In terms of the retail formats, the exclusive distributorship is on the decline and the sales through large general merchandisers are increasing because of the western mall shopping culture in the urban areas. There is a need for more specialized stores dealing in the kitchenware products. These can be in the form of large format ‘category-killers or an up-market small size store which deals in specific types of kitchenware products.

According to the research report, the kitchenware products market will grow at a considerable CAGR rate to reach over INR 55 billion by 2020 due to the increasing number of nuclear families and exposure of online distribution channels.

“The manufacturing base of the country is expected to expand in the coming future with the government initiative of promoting India as a manufacturing hub, improving the technological know-how and surging number of Point of Sales both online and Offline.” according to the Research Analyst, Ken Research.

Key Topics Covered in the Report:

Kitchenware Products Market

  • Market Size by Value

  • Market Segmentation by

Product Categories

Regional Demand

Rural and Urban Demand

Organized and Unorganized Sector

Distribution Channels

End User Demand

Raw Materials

  • Glassware Market

Market Size

Market Segmentation

SWOT Analysis

Market Share

Competitive Landscape

Future Outlook and Projections

  • Cookware Market

Market Size

Market Segmentation

SWOT Analysis

Market Share

Competitive Landscape

Future Outlook and Projections

  • Bake ware Market

Market Size

Market Segmentation

SWOT Analysis

Competitive Landscape

Future Outlook and Projections

  • Porter Five Forces

  • Competition and Market Share

  • Growth Drivers and Restraints

  • Investment Model

  • Future Outlook

  • Macro Economic Parameters

Key Products Mentioned in the Report

Cookware Products

Glassware Products

Bake ware Products

Companies Covered in the Report

TTK Prestige

Hawkins Cooker

Borosil Glass

Ocean Glass

Yera Glass

Gandhimati/Butterfly

LaOpala

Treo/Hamilton

Fab Furnish

Pepperfry

Mebelkart

Flipkart

Snapdeal

34

Borosil Fine Dining, Will Stock Boost Shareholders Wealth

Borosil Expansion Will Add-on to Shareholder’s Wealth
Recently Borosil is in news for two reasons. The company had buyback its share and subsequently reduced its equity by 6.96 lacs. Secondly, it acquired Hopewell Tableware in January 2016. While on one hand equity reduction suggests that management is quite efficiency in running the business while on the other, acquisition of a new business vertical is suggesting for decade-to-decade continuation of business expansion since its inception in 1962. Read the article to find out how the company’s historical expansion and its current initiatives has resulted in addition to its share holders wealth and what are the future prospects.

1 Like
35

Why Borosil has lower ROE and ROCE? Though it has good GPM And NPM.
Please share fair valuation of this stock

36

The thread mostly discusses poor ROE and ROCE, but surprisingly the stock has been a 400 bagger in last 15 years, I am yet to dive deep in Borosil and glass sector in general.
Disc: Not invested.

2 Likes
37

Came across this in depth write-up just today.

Must admit, his analysis skills are real solid.

2 Likes
38

Very nice write up. Very good blog. Views invited on the latest results n corp restructuring of Borosil.

39

What’s your take on latest results of BGW & it’s spate of restructuring anou ced with results? How is Gujarat Borosil now a subsidiary performing? Any moat ? It came ith an IPO in 90s n did nothing for 20-25 years. Any triggers for Guj Borosil?

40

http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/2FCF3DCD_5A74_4EF4_8F3A_0660DCF93A2E_165311.pdf

COCALL TRANSCRIPT.pdf (594.4 KB)
Enclosed 2 concalls from Borosil in Nov 16 & Feb 17 which makes a good read.

Anyone tracking the company & the sector?