Gujarat Borosil - Play the renewables story!


It faces competition from Chinese and Malaysian imports.
However, anti dumping duty on China has opened up good prospects for Gujarat Borosil.
Subsequently, it is also doubling its capacity in the next 1 year.

Can’t do relative valuation as there are no peers.
On Discounted Cash Flow basis, target prices comes around Rs 150, a good 25% upside potential

Worth a look!!

Even a brokerage firm had come up with a report recently on it. Gujarat Borosil has posted impressive Q1FY19 numbers.

I got a better idea on the company triggers on reading the below link

Discl: Not invested

DCF method says fair value is of Rs 10

but as NO peer situation is only makes it intresting
PE around 87
where is the value? at current levels?

As a separate entity, GBL performance is dismal and much to be desired. Only the special situation of merger with BGWL makes it interesting.

Yes right, PE on a standalone basis is very high
on DCF basis, it entirely depends on the assumptions you take.
Taking growth rates of 25-30% in the next few years, terminal growth rate of 5%, and other parameters like WACC etc, i arrived at that price.

I feel that bad performance and the stock price of the company has bottomed out.
It has almost stopped patterned class, now only concentrating on solar glass.

Standard glass size it makes is 3.2mm which is widely accepted. It has now started with 2mm glass with many advantages. 2mm solar glass has great export opportunities and it is finding many European customers
This article says it has margins close to 26-28%. Now its margins are ~20%. So topline and bottomline visbilibility is there. Early days, but Govt’s impetus on solar makes it interesting.

Yes true. GBL needs around 250 Cr for expansion, almost half is being given by the parent through restructuring, remaining debt and internal accruals. Seems Borosil also believe this biz has good growth opportunities.