The country’s installed solar power capacity stands at 92.19 gigawatts (GW), a 35x growth since 2014, according to the data as of October 2024.
The National Institute of Solar Energy has projected that India can generate ~748GW of solar power, assuming 3% of the wasteland area is covered by solar photovoltaic (PV) modules. This potential is 8x the present capacity of 92.19GW.
The Government of India is constantly making efforts to promote the use of solar energy through various schemes and benefits. The government aims to reduce the projected carbon emissions by 1 billion tonnes by 2030 and achieve net zero carbon emissions by 2070.
The government has also allocated ₹10,000 crore for solar power grid projects in the Union Budget 2024-25, a rise of 110% over the amount allocated in the Union Budget 2023-24.
Now, the question arises: Which company will directly benefit from this increased demand for solar power? We are referring to product manufacturers as well as allied companies.
Perhaps the company best placed is Borosil Renewables Ltd, the largest manufacturer of solar glass in India. Solar glass is used in solar photovoltaic modules, roof-top solar panels, utility-scale solar projects, and greenhouses.
What to expect?
Borosil Renewables manufacturs textured low iron solar glass ranging between 2mm and 6mm thickness, and sheet length up to 3500mm and width up to 2500mm. The company is the largest solar glass manufacturer in India with a capacity of 1,350 tonnes per day (TPD), of which, 350 TPD is at the company’s manufacturing facility at Tschernitz in Germany’s Brandenburg.
In 2022, the company acquired Interfloat Group, Europe’s largest solar glass manufacturer, consisting of Glasmanufactur Brandenburg (GmbH), which operates the 350 TPD facility at Tschernitz.
Borosil Renewables reported 58.7% of total consolidated sales from domestic markets and 41.3% from international markets, predominantly from the European Union, Turkey, America, Middle East, and North Africa regions.
The company reported a profit for the nine months ending 30 September 2024 and earnings per share (EPS) of ₹0.97 and ₹0.69, respectively.
As per screener.in, the company has a median sales growth of 27.5% for last 10 years, and the stock is trading at ~6.7x the book value.
Nearly 61.6% of total shareholding is with promoters, while FIIs hold around 4.2%, DIIs around 0.2%, and the public holds around 34% of total shares, as of September 2024.
Players in the solar glass industry
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Globally, China is the largest manufacturer of solar glass. However, in India, Borosil Renewables is the largest manufacturer of solar glass by capacity.
A few of the competitors are Vishakha Renewables Pvt. Ltd from Gujarat, Gold Plus Glass from Delhi, and Triveni Renewables Pvt. Ltd from Andhra Pradesh. Since the competitors are private limited companies, the comparison is made only on the production capacity as shown above.
Borosil Renewables has ~43% share in the solar glass installed capacity, while Vishakha Renewables has ~28% share. Other players have less than a 15% share in the solar glass installed capacity.
Main concern
According to Borosil Renewable’s report, solar glass is a significant component imported into India with a 10% import duty in the solar module ecosystem. This makes imports from low-cost countries a concern for domestic manufacturers. Countries like China drop their prices when the duties are increased. So, companies have proposed anti-dumping duties and minimum import price (MIP) per tonne of solar glass.
Recently, Borosil Renewables released information on its application to the ministry of commerce and industry for alleged dumping of solar glass from China and Vietnam into India. The company stated that “the ministry of commerce and industry, in its preliminary findings, has recommended imposition of provisional anti-dumping duty, pending completion of the investigation, vide its notification dated 5 November 2024″, and the matter is now with the ministry of finance.
Why Borosil Renewables?
The following points help us understand why Borosil Renewables may be well placed to tap into the big solar energy opportunity:
• Borosil Renewables, being the leader in solar glass manufacturing, has shown a consistent growth in revenues over the last ten years.
• There are new entrants for solar PV module manufacturing in India. Since Borosil Renewables is a reputed company, the new entrants might prefer to use their products, considering the experience and reliability.
• Recent news of imposition of anti-dumping duties on imports of solar glass from China and Vietnam in India will increase the sales of domestic solar glass manufacturers in coming times.
• Borosil Renewables has submitted a draft letter of offer for a rights issue in June 2024,
• With the raised money, the company is estimating to repay outstanding borrowings of ₹128.1 crore, which will address the concerns over low-interest coverage ratio of the company.
• The company plans to invest around ₹211.1 crore in the geosphere from money to be raised through the rights issue. This will reduce the cost of raw materials and increase profitability in coming times.
So, with the growing use of solar energy for power generation and alternative applications, the companies manufacturing solar glass as well as solar PV modules will gain a lot. Borosil Renewables has expertise in the field of glass manufacturing and should remain a preferred supplier for solar glasses to solar PV module manufacturers as well as for alternative applications of solar energy.
For more such analysis, read Profit Pulse.
Having said that, as we said before, the big risk is low-cost imports, as there were no duties on solar glass earlier. However, the government has recently introduced a 10% customs duty on solar glass imports. Further, as discussed above, if the government approves the anti-dumping duty on imports of solar glass and MIP per tonne, Borosil Renewables will potentially gain the most from this opportunity.
Note: We have relied on data from www.screener.in as well as the company’s presentation throughout this article. Only in cases where the data was not available have we used an alternative but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Mohit Bhambhani is a seasoned financial professional with over 13 years of experience in the field of financial research and corporate advisory. He also has substantial experience in Indian stock markets. With an analytical approach, he studies the performance of companies deeply, bringing value to the readers.
Disclosure: The writer/his dependents hold the stocks of Borosil Renewables Ltd discussed in this article.
