Ladies and gentlemen, good day and welcome to Borosil Limited Q2 FY 2025 earnings conference call hosted by ICICI Securities. As a reminder, all participants' lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nilesh Patil from ICICI Securities. Please go ahead. Thanks, Shikha. On behalf of ICICI Securities, we welcome you all to Q2 FY 2025 results conference call of Borosil Limited. We have with us Mr. Shreevar Kheruka, MD and CEO, Mr. Rajesh Kumar Chaudhary, Whole Time Director, Mr. Anand Sultania, CFO, Mr. Rituraj Sharma, President, Consumer Products, and Mr. Swadesh Talapady, VP, Investor Relations. Now I hand over the call to management team for their initial comments on quarterly performance, and then we will open the floor for question-and-answer session. Thanks, and over to you, Rituraj sir. Thank you, Nilesh, and ICICI Securities for hosting this call. Good evening to every one of you. The Borosil team is delighted to be communicating with you once again. I'm pleased to inform you that Borosil Limited's board has approved the financial results for Q2 FY 2025 and H1 FY 2025 during our meeting on November 13th, 2024. We have submitted our results and an updated presentation to the stock exchanges, and they are also available on our company's website for your review. I'm happy to share that Borosil Limited had a strong performance in H1 FY 2025, with revenue from operations reaching INR 490.7 crores compared to INR 410.9 crores in the same period last year. This impressive year-over-year growth of 19.4% places us among the top performers in the industry. Reflecting the strength of our strategy, our operational focus, and most importantly, the trust and loyalty of our customers. This growth showcases how well we are navigating challenges and making the most of new opportunities, solidifying Borosil's role as a leader in the market. In H1 FY 2025, the company achieved an operating EBITDA of INR 82.2 crores, up from INR 62 crores in H1 FY 2024, reflecting our continued emphasis on efficiency and growth. The operating EBITDA margin for H1 FY 2025 was 15.8% compared to 15.1% in the same period last year. The company has incurred higher A&SP expenses of INR 12.8 crores during H1 FY 2025 and INR 7.4 crores during Q2 FY 2025 as compared to the same period during the last year. The higher A&SP expenses are attributed to the preponement of the Diwali festival this year compared to last year, with the benefits expected to reflect in the subsequent quarter. However, the annual A&SP expenditure is expected to remain consistent with the previous year. Notably, other income includes INR 8.42 crores from shared service support income, with associated expenses captured under total expenses. Profit before tax for H1 FY 2025 came in at INR 38.8 crores as against INR 32 crores in H1 FY 2024, driven by both operational improvement and higher investment income, which was up by about INR 6.36 crores year-over-year. On the other hand, depreciation and finance costs increased by approximately INR 19.84 crores, primarily due to the commissioning of a new borosilicate glass furnace in Q4 FY 2024. As a result, our profit after tax for H1 FY 2025 reached INR 27.6 crores as compared to INR 23.5 crores during the same period last year. As for the Union Budget 2024, the discontinuation of indexation benefits on long-term capital assets effective July 23, 2024, has resulted in a reversal of deferred tax credit in Q2 FY 2025. This has led to higher taxation for the quarter, thereby impacting the profit after tax by INR 1.33 crores. Now let's dive into our category-wise performance for H1 FY 2025. Borosil's consumer demand continues to grow across both glassware and non-glassware categories under the Borosil brand, along with our other opalware range under the Lara brand. The Lara opalware segment, celebrated for its modern design and high quality, reported impressive sales of INR 181.3 crores in H1 FY 2025, up from INR 158 crores in H1 FY 2024, marking a growth of 14.7%. In our glassware segment, which includes borosilicate microwaves, servingware, glass tumblers, lunch boxes, and storage solutions, we saw an exceptional year-over-year growth of 32.6%, with revenues reaching INR 116.7 crores in H1 FY 2025 compared to INR 88 crores in H1 FY 2024. The non-glassware segment, covering an area of small home appliances, insulated bottles, and flasks, cookware, and other kitchen essentials, also posted a strong performance, achieving a 16.9% increase in revenue. Turnover for this segment reached INR 192.7 crores in H1 FY 2025 compared to INR 164.9 crores in H1 FY 2024. This outstanding performance highlights the successful execution of our strategy to broaden the Borosil portfolio, catering to the varied culinary and serving needs of Indian households. It also reaffirms the enduring strength and broad appeal of Borosil brand across multiple product categories. During the quarter-ended June 30, 2024, the company successfully raised INR 150 crores through a QIP to facilitate the repayment of long-term project loans, working capital loans, and for general corporate purposes. Of the total QIP proceeds, INR 105 crores have been utilized for the repayment of working capital loans, INR 39 crores for the repayment of long-term project loans, and the remaining balance, after accounting for QIP issue expenses, has been temporarily invested in high-credit quality short-term money market instruments. We currently have a net debt of INR 88.6 crores. We are pleased to update you that the external rating agency, ICRA, has upgraded Borosil Limited's long-term rating to AA- stable, while the short-term rating has been reaffirmed to A1+. This upgrade reflects the healthy improvement in our credit profile and the expectation of stability in the near to medium term. This positive development highlights our strong brand presence in the consumerware market, supported by a diversified product portfolio. Our extensive domestic distribution network and a broad customer base have been instrumental in achieving this milestone. This upgrade reaffirms our commitment to excellence and positions us well for sustaining growth. At Lara, we believe dining should blend beauty with functionality, elevating everyday moments into memorable experiences. That's why we are thrilled to present the Premia Dinner Set Collection, a sophisticated addition to our line of premium kitchenware. Designed to elevate dining experiences, the Premia Collection is an exquisite blend of aesthetic appeal and practical functionality, making it the perfect choice for modern homes. The Premia Dinner Set features intricately embossed designs, adding timeless elegance and luxury to any dining table. Crafted from high-quality materials, it offers exceptional durability and resists everyday wear and tear. The versatile design complements traditional and modern settings alike, creating memorable dining experiences. Since we acquired Lara in 2016, this flagship brand has been on a strong growth path. Lara's success speaks volumes about our strategic vision, operational excellence, and dedication to customer satisfaction. Sales for Lara have grown at a CAGR of 22%, rising from INR 87 crores in FY 2016 to FY 2017 to an impressive INR 358 crores in FY 2023 to FY 2024. This growth highlights the impact of our acquisition strategy, where we not only reflect the brand image but also streamlined operations and adjusted market positioning to unlock new opportunities. Likewise, our non-glassware segment has turned into a powerful growth engine for Borosil. With a CAGR of 50%, non-glassware sales have soared from INR 23 crores in FY 2016 to FY 2017 to INR 387 crores in FY 2023 to FY 2024. This achievement underscores our commitment to expanding our product portfolio and staying ahead of our customers' evolving needs. The new Borosilicate glassware furnace is indeed a significant milestone. By expanding production capacity, we are effectively meeting the increasing demand while strategically reducing dependency on imports. This aligns perfectly with our mission to encourage a shift from plastic and steel towards healthier, sustainable glass options. Combining product innovation with accessible pricing has clearly struck a chord, particularly in categories such as lunch boxes, a product with everyday use that appeals across all age groups. As awareness of glassware's benefit grows, this trend is set for sustained momentum, positioning our brand as a leader in sustainable and accessible choices. In recent years, Borosil's consumer business has strategically expanded beyond its original focus on microwave glass products, establishing three robust growth pillars: glassware, non-glassware, and opalware that now anchor our sustainable growth path. Each of these divisions has seen substantial growth and is well-positioned for further expansion as consumer adoption and usage continue to increase. Our new product lines, such as the launch of Premia, Borosil Square Mixing Bowl, Borosilicate Barware Range, Coffeemate, Air Fryers, and Gas Stoves, have struck a chord with consumers. Likewise, our fresh designs in opalware, including lunch boxes, storage sets, and cooler mugs, have gained significant popularity, strengthening our presence in the market and enhancing our brand's appeal across a broader audience. At present, our main objective is to broaden our brand. We are dedicated to transitioning consumers from plastic and melamine to glass storage and opalware, while also encouraging greater use of microwave products. To diversify our offerings, we consistently introduce new items such as portable high-grade steel products and home appliances. Our ultimate goal is to position Borosil and Lara as the preferred brands in modern Indian kitchens for all storage, preparation, cooking, heating, and serving needs. We are confident in the medium-term outlook for our business. While we may encounter phases of slower growth and cautious consumer sentiment, which are typical of market cycles, we remain optimistic about the long-term growth potential. Our strategy is centered on broadening our consumer reach through precise, targeted initiatives, introducing cutting-edge products that align with the shifting needs of our customers, and streamlining our supply chain marketing efforts for maximum impact. With that, I would like to throw the floor open to questions. Thank you. Thank you very much, sir. We're now coming to the question-and-answer session. Anyone who wishes to ask a question may press Star and One on the touch-tone phone. If you wish to remove yourself from the question queue, you may press Star and Two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question from the line of Mr. Varish Bhangur from Brescon Ventures. Please go ahead. Hello. Hello, everyone. Sir, your line is unmuted. Please go ahead. Yeah. Sir, I think you have some good set of numbers. So, I think here down the line, our opalware capacity will be consumed up if I'm not wrong. So, my first question is that, do we have any product pipeline or, let's say, where we want to put up a capacity in order to keep consuming our growth trajectory? And the second question is on the BIS implementation. Now we are two months into the BIS implementation, and do we see that the domestic supply chains are, I mean, have the capacity to fulfill our non-glassware segment, or do we need to put up our own capacity whenever this inventory from China ends? So, I'll do one of the questions. As far as our opal capacity is concerned, I would say that we have at least two years to go before we fully utilize the capacity. We are probably de-bottlenecking within this year. So, I think we will take that call probably sometime in the next year. And as far as BIS is concerned, I believe that we have important enough inventories, and we have local sourcing also, which will help us, let's say, transition away from imports to domestic sourcing in adequate time. And therefore, it should be relatively seamless, this whole transition. Yeah, got it. Those were my questions. Thank you. Sir, does that answer your question? Yeah, those were my questions. Thank you. Thank you very much. We have the next question from Aman from Seven Rivers Holding. Please go ahead. Yeah. Hi, everyone. So, I have a few questions. So, first is on gross margins. Sir, GM has sort of come off from previous quarter. So, is it because of product mix, or is it because of price cuts? Because some of our peers have mentioned that Q2 had higher-than-expected price cuts affecting their value growth. So, how is that progressing for us? Hi, are you all doing good? Yeah, hi. So, it's about the product mix. On account of product mix, there is a change in gross margin. So, to clarify, I don't mean to take any price cuts, of course. There's been no price cuts. Okay. So, we sell more large boxes across the range. Then, therefore, their price slightly lower in general compared to their mixing bowls. So, there would be some impact there. But I don't think it's worth reading into that trend in the sense that we are not discounting a product to sell to achieve our sales. Sir, we have done 25% growth in glassware. What's the contribution of pressware products in this, if you could give us some idea there? I think pressware were more than glassware in the sense that the other parts of glassware are actually unbeatable. So, pressware would be probably closer to 30%. But I guess the exact numbers I'm not having much in front of me, but maybe someone from my team can clarify. So, you're right. The majority of the growth is coming from the pressware segment only and from the lunch boxes that we have done. And on working capital, so we are at about eight-to-nine months of inventory on cost now. I believe that's planned because of the value quarter. But do you have a target for this FY close? If not a target, would you say it would be lower compared to FY 2024? September is not the right month where we look at the right inventory levels, probably. So, October and going forward, also third quarter, we'll have higher sales probably. So, on an annualized basis, probably we should not be much higher than where we were in March 2024. And some of the inventories have been added because of the BIS regulations. So, overall, I think we should have a comfortable position by the end of this financial year. Yeah. So, and, sir, one last question. There are some news reports making rounds that Borosil Limited plans to do some CapEx in Gujarat. So, if you could share some more information on that. Is it for bottles or anything else? No, at the moment, we don't have such plans. If there's anything, probably it will be approved in the board, and it will be informed to everybody at the right forum. Okay. Okay. That's all for me. Thank you. Thank you very much. Participants, if you wish to ask a question, you may press Star and One at this time. We have a question from Jasdeep Walia from Clockvine Capital. Please go ahead. Hi, sir. Thanks for taking my question. Sir, does this quarter have an element of higher festival stocking versus last year on account of seasonality? And hence, maybe we can expect sales growth likely to be subdued in the next quarter, which is the December quarter? Yeah. Hi, Jasdeep. Can you just repeat that question? Your voice is a little muffled. Yeah. Sir, does this quarter have an element of higher festival stocking versus last year? And hence, is the sales growth likely to be subdued in the next quarter? Because I think last year's festival stocking would have happened in third quarter, right? Jasdeep, the stocking is higher because of the earlier Diwali compared to last year. But it does not imply that the sales growth would be lower in the next quarter. Sales growth is a regular kind of a thing. Got it, sir. Got it. And, sir, what is the amount we'll be spending on CapEx this year? We have already mentioned this in the previous earnings calls. The estimated CapEx for this year is about INR 100 crores. Okay. And the broad split of that CapEx is what? There's about INR 25 crores, which will be spent on the second phase of solar project that we are doing. And then, approximately INR 25 crores will be spent on the rebuild of both the opalware furnaces, which is Furnace One and Furnace Two. And there is some de-bottlenecking that will be done to increase the production. That's about INR 25 crores. And INR 25 crores is the retention amounts from the previous two big CapExes that we have done, which is increase of opalware capacity as well as setting up a borosilicate furnace. That's about INR 25 crores. So, these are the broad makeup of INR 100 crores. Got it. And during this rebuild of both the furnaces for your opalware facility, do you expect any impact on sales this year? I don't think there will be any impact. Got it, sir. Thank you, sir. That's all from me. Thank you very much. Participants, I would like to remind you that you may press Star and One if you wish to ask a question. We have a question from Vipul Kumar from Sumangal Investment. Please go ahead. Hi. Thanks for the opportunity, sir. So, my question is regarding other expenses, which have risen substantially year-over-year and Q and Q also. What are the main heads where the expenses have increased, other expenses? So, there's an element of power and fuel in that. So, other expenses includes the power and fuel cost also. So, that's about maybe INR 11-12 crores. And Mr. Rituraj Sharma has already mentioned that there are some preponderance on the A&SP expenses. That's about INR 12-13 crores. That's a major chunk of money. INR 12-13 crores is for what? Would you repeat, sir, please? For advertising and sales promotion expenses. So, that is additional INR 12-13 crores, if I understand correctly, right? Over and above normal. Yes. Okay. Thank you, sir. Thank you very much. We have a question from Dhaval Shah from Girik Capital. Go ahead, sir. Yeah. Hi, team. Great set of numbers on the top line growth. Sorry for interrupting, sir. Dhaval Shah, can you please be a bit more loud? Yeah. Am I audible now? Much better. Okay. Thank you. Great set of numbers comparatively. Yeah. Sir, my question is, the other income part, could you please clarify again what is the actual other income and is it the receivable towards Borosil Scientific Limited for the quarter? Yeah. So, the other income for the first half includes about INR 8.4 crores, which is the shared service income. We have discussed this in the previous earnings calls also. And the attributable expenses basically is covered under the total expenses. Okay. Okay. And for the quarter, it will be how much? Roughly four and a half crores. Four and a half. Okay. Fine. Yeah. And my second question is that, so, as we have visibility for the next two years in terms of available capacity for opalware, suppose that for our growth, would we be looking at other categories of glass, or it could again be in opalware? Or it's too early? So, Dhaval, right, currently we are covered, like Shiva mentioned. And I think the market also is very dynamic and evolving. So, I think when we reach there, we will take a call, whether it's glass or any other category. Okay. And one of our competitors, capacity of soda-lime glass is going to be live in, or should have gone live by now. So, you're seeing any sort of pressure or higher competitive intensity in the market? In my opinion sorry. Go ahead, sir. Go ahead, Shreevar. Sorry. In my opinion, the product is a totally different product range. Soda-lime glass is used extensively for bottles. It's used extensively for tumblers, both of which are not core, let's say, to our product range. So, I don't believe there's great overlap of products. So, to that extent, I don't think that there's any challenge to our borosilicate or our opal glass sales. Yeah. And I'm quite certain that they're not really overlapping in any way. Sure. Great. Great. And, sir, from our new borosilicate furnace, we would have tried a lot of new products as well as the existing product range. So, if you can briefly share with us which product has been quite liked and has been a hit in the market. And so, yeah, so something on the new product, which we've launched, because we are the category leaders and we have a strong market share, plus we dedicate helping this. But I think our focus here is mainly lunch boxes. And you can probably see that in the market. There's a big shift from plastic to glass. And that's a trend we're kind of doubling down on. And I think in the foreseeable future, this will continue. So, there are many, many SKUs, too many to mention on this call. But we have all shapes and sizes of lunch boxes and for entry-level pricing of INR 499 also. So, for different customers, we are trying to convince them to switch from plastic and glass by, sorry, plastic and steel, by offering a healthy and a hygienic and as well as a cost-effective alternative. So, so far, we see traction there, and we hope that will continue. We do have many other products in the Borosilicate range that we still have not been able to launch, which we will do so over the next six to 12 months. With that, we expect to consume our capacity. If I was to say one thing which has helped us is the lunch boxes, the Borosilicate lunch boxes, which has got good traction in the market already. Okay. On that, one participant asked about lower gross margin. Is it related to the higher lunch boxes sale? Is it? Yeah. Look, as far as gross margins are concerned, it's a product-linked issue. I mean, lunch boxes definitely, compared to selling a mixing bowl or lunch box, it's definitely got a lower gross margin. As the volumes of lunch boxes have gone up, then you have some impact there. But there could be other. We've had thousands of SKUs. So, I mean, the important thing to note is that we have not been either discount. We will not either increase, reduce MRPs or increase our discounts anywhere. It's just a product-linked issue. And I would not be too bothered about that from a longer-term perspective. It's just a multiplier factor or product-linked effect. Yes. Okay. And, sir, have you completely stopped trading now in Borosilicate category? Not in the category. We make pressware. And that, we have absolutely stopped trading, obviously. Firstly, I would not even call it trading. We were adding value to the product, not just trading it. But we were, say, outsourced. We had outsourced manufacturing for pressware. And that is something that now we are insourced. And therefore, we don't have any reason to purchase pressware from anywhere else. But there are some other products in the blown area, blown glass, which we do not manufacture, which we will continue to buy in the future. Okay. Okay. Got it, sir. Okay. Thank you. Thank you very much. Before we take next question, we would like to remind participants, you may press Star and One to ask a question. Next question we have is from Aditi from Niveshaay. Please go ahead. Hello. Hi. Good evening, everyone. Am I audible? Yes, ma'am, you're audible. So, I wanted to know the current capacity utilization from the different divisions like Pressware and Opalware for this quarter. Hello? Hello? Can you just repeat that again, please? I wanted to know the current capacity utilization from your pressware division. We would be close to 65%. Okay. And in the last quarter, you mentioned that you achieved to aim around 100% capacity utilization within this year. So, do you continue with that? I mean, are we online? I think last time we mentioned that in the next two years. So, this year plus next year, I think we optimized. Initially, when we had initially projected, we said we'll do it over three years. And we hope to achieve it in two years rather than three. Okay. Okay. And that's what we hope at that decision. Right. And for the opalware, I think it must be 100% during the quarter? Yeah. During quarter, it's yes. Sorry. Go ahead, Anand. Yeah. For the quarter two, it has been 100% capacity utilization. For the first half, it has been close to 85%. Right. Right. And could we meet the entire demand, or we were short out of the supply thing to meet the demand, the existing demand, in opalware segment? I believe we could meet everything that we had ordered, sir. That's right. Okay. Okay. My next question is, in terms of your visibility on revenue and margin for the next two years? We've always been guiding on a 15%-20% short-term figure. And I would stick by that guidance. It's hard to give a specific number because anything, I mean, in the short run, in the very short run, things change based on many external factors which are beyond our control. But I would say, from our growth perspective, 15%-20% should be in the range of what we can achieve, absent external shocks. Okay. Got it. And my last question is, can you comment on your current distribution network as compared to the last year? I mean, what growth have we achieved from our distribution network? Rituraj? So, in our case, we have had growth across channels. And the growth has come from trade, the general trade, the e-comm, large format stores. So, across channels, we have got growth. Okay. Okay. I got it. Thank you so much. Thank you very much. Ladies and gentlemen, we would like to remind you, if you wish to ask a question, you may press Star and One. We have a follow-up question from Dhaval Shah from Girik Capital. Go ahead, sir. Sir, my question was regarding our sales channel mix. So, given e-commerce has become a large category for consumer facing products, consumer derivatives, etc. Dhaval, sorry to interrupt you. Are you wanting to echo in? Can you just repeat the question? Hello? Hello? Hello? Go ahead. Sir, go ahead. Yeah. Yeah. Yeah. Okay. So, my question was on the sales channel mix. Given e-commerce has become a significant channel, and over time, we have seen that the profitability, the margin, it was evolving as a channel. So, how would you state the margin across different categories? Sorry, different channels, be it wholesale or a general trade and an e-commerce, how is the margin differentiation now? Is it narrowing? Is it same? How is it now? Well, I don't think we have meaningful differences between the various channels in terms of gross margin. And I think each channel has some quarters which are better and some which are worse. But I don't think there is a big gap that we are selling something much cheaper on e-commerce or much more expensive in trade. So, I don't think of course, we know the data, but we don't share that. But I don't think we should look at it from a. There's no material impact from one channel versus the other if you look at the overall sales in the channel. Okay. Okay. And this category being easy to be bought online, our products. So, how is the reaction from the general trade and our offline channels? Are they? Do we have a separate category for it? Because it's a very fast-growing category for us. And now we are also there on quick commerce as a category. We are available there as well. So, how is the traditional channel reacting to this? I think we have a fairly differentiated strategy for channels in terms of products. So, the way we're set up is we have category managers and we have product management. And each category manager and product manager speak to figure out what works for the different channels. And therefore, we try and reduce competition amongst the channels because the customers also come in are fairly different. And they have different needs. So, we try and have different product categories for different channels. And that's definitely something which reduces friction in the system. Okay. So, did you notice any extra discount by these large Flipkart and Amazon in their Big Billion Days sales, which was over and above the price which you are selling, or generally, would you be selling over the year? Rituraj? No, in our category, there was no I mean, nothing majorly noticeable. Okay. So, no extra discount from the e-commerce website side? I mean, nothing majorly noticeable in the category. I mean, yeah. Yeah. Okay. Okay. Understood. Great. Thank you. Thank you very much. Participants, if you wish to ask a question, you may press Star and One. As there are no further questions, I would like to hand the conference over to management for closing comments. So, thank you, everyone, for your participation and your insightful questions. We really appreciate it. We've had a very good quarter from a revenue growth perspective in a fairly challenging demand environment. And we hope we see some green shoots in the future for growth of the demand environment, of the general demand. But in spite of that, I think my team has done remarkably well. And my congratulations to them. And my thanks to all our channel partners and our suppliers for supporting us through and through for the last many years. And to, of course, our shareholders for supporting us and believing in us. So, thank you very much. I look forward to speaking with you at the end of Q3. On behalf of ICICI Securities, that concludes this conference call. Thank you for joining us. You may now disconnect your lines. Thank you.