/** Title: Borosil Q4 FY26: Growth Holds Up While Hydra And Energy Costs Test Margins Slug: borosil-fy26 */

Borosil Q4 FY26: Growth Holds Up While Hydra And Energy Costs Test Margins

Borosil Limited closed FY26 with steady top-line growth, but profitability was pressured by a difficult operating environment. For Q4 FY26, consolidated net sales came in at INR 277.9 crore, up 5.2% year-on-year. EBITDA was INR 37.9 crore, down 4.1%, while PAT was INR 10.6 crore, down 5.0%. The quarter also saw EBITDA margin (before exceptional and one-time items) fall to 11.5% from 14.2% in Q4 FY25.

For the full year, net sales increased 7.6% to INR 1,171.1 crore. EBITDA before exceptional and one-time items was broadly flat at INR 176.7 crore, and EBITDA margin eased to 15.1% from 16.3%. PAT was INR 74.7 crore, a 0.6% increase.

The headline numbers, however, do not fully capture the two themes that dominated management commentary: supply disruption in Hydra, the company’s vacuum-insulated stainless steel bottle range, and the sharp rise in energy costs linked to LPG and gas.

A year of mix resilience, but Hydra was a drag

Borosil’s portfolio is split across three reported categories: Glassware, Non-Glassware, and Opalware (under Larah). FY26 growth was led by Glassware, which expanded 17.3% to INR 295.5 crore. Opalware grew 7.3% to INR 411.9 crore. Non-Glassware, which includes Hydra and domestic appliances, grew only 2.4% to INR 463.7 crore.

Management repeatedly pointed to Hydra as the swing factor. The BIS quality control order created supply chain constraints that affected product availability, reduced sales, and also hit operating leverage. In the call, management stated that Hydra sales were down meaningfully, and also referenced an estimated INR 100 crore sales loss in FY26.

Q4 category performance reflected the same pattern. Glassware grew 5.8% to INR 64.7 crore, Opalware grew 7.7% to INR 98.2 crore, while Non-Glassware grew 2.8% to INR 115.1 crore.

Cost pressures: gas, LPG supply shocks, and China dumping

Margins came under pressure from two directions.

First, the company faced fuel-related disruptions in Q4. Management said production at the borosilicate pressware furnace and the opal glass furnace in Jaipur was temporarily impacted because LPG supply was restricted, linked to a force majeure situation arising from the West Asia crisis. Management clarified this did not hurt sales volumes due to available inventory, but it did impact costs and fixed cost absorption.

Second, competitiveness in borosilicate glass remains challenging. In response to an investor question on why margins did not improve despite ramp-up, management said there is significant dumping from China across categories. While Borosil can charge a brand premium relative to dumped prices, pricing pressure remains a structural headwind.

The energy point was quantified during Q&A. Management indicated that gas cost inflation had a direct annual impact of around INR 30 to 35 crore across three furnaces, and also described gas costs rising around 2.5x.

At the same time, the company is positioning energy self-sufficiency as a medium-term margin lever.

Capex and execution: Make in India becomes the response strategy

Borosil’s response to FY26 headwinds is centered on domestic manufacturing and lower energy costs.

The most important capex is in Hydra. The company is setting up a manufacturing unit with three double-wall lines for vacuum-insulated stainless steel flasks, bottles and containers. The presentation disclosed an estimated initial capex of INR 65 crore and initial capacity of about 3.6 million units annually. Management said commercial production from two lines is expected before end of Q1 FY27, and the third line by end of Q2 FY27.

Management also addressed the margin question. It said gross margin improvement of at least about 10% versus trading margins should be achievable, but only after an initial stabilisation period of 6 to 12 months.

The second major lever is renewable energy. Management disclosed a further investment of INR 75 crore towards a 20 MW ground-mounted solar project with battery energy storage. It is expected to be commissioned in Q1 FY27, and management estimated the savings at about INR 28 crore at EBITDA level for FY27. With the earlier 8.6 MWp and 7.2 MWp solar installations, the company said total solar capacity after Phase III would cover about 61% of overall power requirements.

A third set of initiatives targets capacity and product availability in glassware.

1. Bharuch facility: The company disclosed current sales of about INR 100 crore from products sourced from Borosil Scientific Limited’s Bharuch plant. It has approved a new manufacturing facility at Bharuch with capex of INR 42 crore, expected to be commissioned by end of Q3 FY27. The facility will manufacture using borosilicate 3.3 glass tubes and will be BL-owned but operated by BSL under a contract manufacturing model.

2. Jaipur furnace expansion: The board approved expansion of the borosilicate glass furnace from 25 TPD to 32 TPD by adding a third forming line. Capex is estimated at INR 50 crore. The presentation notes that the existing furnace is at around 90% utilisation and was commissioned in Jan’24.

Taken together, management guided FY27 capex broadly around INR 110 crore, including maintenance capex, while noting the number could move up if more projects are approved.

Working capital and ROCE: the balance sheet is still stable, but efficiency slipped

The company’s operational ROCE declined to 10.7% in FY26 from 11.5% in FY25, as per the presentation’s ROCE bridge. Working capital employed increased to INR 312.6 crore from INR 268.1 crore, and working capital days rose to 97.4 from 89.9.

Management explained that inventory build-up continued for two consecutive years, but for different reasons. The Hydra inventory built up earlier was largely depleted, but appliance inventory was built in FY26 due to another QCO affecting electrical appliances. Management also highlighted that borosilicate furnace output exceeded sales, leading to higher glass inventory.

Net debt increased to INR 49.7 crore at FY26 end from INR 26.6 crore at FY25 end. Management stated cash from operations was about INR 119 crore in FY26 and indicated it expects inventory drawdown and internal cash generation to support near-term funding needs.

What to track next

Management was candid that FY26 was tougher and that the next quarter or two could still carry challenges as new initiatives stabilise. Yet it reiterated medium-term ambition: revenue growth of 15% to 20% year-on-year and EBITDA closer to around 20%.

For investors, the near-term checklist is clear.

Hydra: whether supply normalises as in-house manufacturing ramps in Q1 and Q2 FY27.

Energy: whether the solar plant is commissioned in Q1 FY27 and delivers the estimated INR 28 crore FY27 EBITDA benefit.

Glassware profitability: whether anti-dumping action, if any, changes competitive intensity, and whether pricing can keep up with gas cost volatility.

Borosil’s portfolio has shown resilience in categories like glassware and opalware. The FY26 performance indicates that execution and compliance-related supply chains, especially in Hydra, now matter as much as brand strength. If the company delivers on its manufacturing and energy initiatives on the stated timelines, FY27 could look structurally different from FY26.