Borosil Renewables' Q2 EBITDA fell 7.3% despite revenue gain

Borosil Renewables reported Q2 FY27 revenue from operations of Rs 396.2 crore, up 4.7% year on year, but earnings before interest, tax, depreciation and amortisation (EBITDA) fell 7.3% to Rs 116.3 crore. A lower fuel surcharge and routine furnace maintenance reduced realizations and production, taking EBITDA margin down 440 basis points to 28.6%.

Why did Borosil's Q2 FY27 EBITDA fall?

Borosil's Q2 FY27 EBITDA fell because quarterly realizations declined and routine furnace maintenance slightly reduced production, even as revenue increased. Revenue from operations rose to Rs 396.2 crore from Rs 378.4 crore in Q2 FY26, while total income increased 7.0% to Rs 407.0 crore. Total expenditure, however, climbed 14.1% to Rs 290.7 crore, compared with Rs 254.7 crore a year earlier. That gap between income growth and expenditure growth resulted in EBITDA of Rs 116.3 crore, down from Rs 125.5 crore.

The margin effect was more pronounced than the revenue change. EBITDA margin fell to 28.6% in Q2 FY27 from 33.0% in Q2 FY26, a reduction of 440 basis points, where one basis point equals one-hundredth of a percentage point. Management identified the decline in gross margins as the resultant impact. The quarter's profit before interest and tax was Rs 94.7 crore, down 8.7% year on year, despite depreciation and amortisation declining 1.0% to Rs 21.6 crore and finance cost falling 27.3% to Rs 2.6 crore.

How did fuel surcharges affect Borosil's Q2 realizations?

Borosil's Q2 realizations moderated after it reduced a fuel surcharge of about Rs 9.50 per square metre in response to temporarily lower gas prices. Average selling price, measured in rupees per square metre per millimetre, was Rs 155.9 in Q2 FY27. This was lower than Rs 160.30 in Q1 FY27, although it remained above the Rs 150.20 recorded in Q4 FY26. The lower surcharge therefore affected reported selling prices during the quarter rather than indicating a uniform decline across the preceding three periods.

The presentation says the decline in gas prices proved short-lived and that realizations had reverted near Q1 FY27 levels in Q3. This pricing mechanism matters because the surcharge changes with gas prices and feeds directly into reported realization. Separately, routine furnace maintenance caused a slight dip in production, which management said weighed on gross margins. The two stated factors, lower realization from the surcharge reduction and lower output during maintenance, explain why a 4.7% rise in Q2 revenue did not translate into higher EBITDA.

How did Borosil's Q2 compare with Q1 and H1 FY27?

Borosil's Q2 FY27 performance was lower than Q1 FY27 on both revenue and EBITDA, but its H1 FY27 results remained ahead of H1 FY26. Revenue from operations declined 2.3% sequentially from Rs 405.7 crore in Q1 FY27 to Rs 396.2 crore in Q2 FY27. EBITDA fell 18.1% from Rs 142.0 crore, and the EBITDA margin declined from 33.8% to 28.6%, a sequential contraction of 520 basis points. Net profit decreased 20.0% quarter on quarter from Rs 87.7 crore to Rs 70.1 crore.

For H1 FY27, revenue from operations increased 12.8% to Rs 801.8 crore from Rs 710.7 crore in H1 FY26, while EBITDA rose 18.5% to Rs 258.3 crore from Rs 218.0 crore. H1 EBITDA margin increased 80 basis points to 31.2% from 30.4%. Net profit was Rs 157.8 crore in H1 FY27, compared with a net loss of Rs 226.5 crore in H1 FY26; the earlier period included an exceptional item of Rs 359.8 crore, while H1 FY27 reported no exceptional item.

The lower operating result in Q2 did not prevent year-on-year growth in profit before tax and net profit for the quarter. Profit before tax rose 39.2% to Rs 92.1 crore from Rs 66.2 crore, while net profit rose 53.1% to Rs 70.1 crore from Rs 45.8 crore. The comparison reflects that Q2 FY26 included an exceptional item of Rs 33.9 crore, whereas Q2 FY27 had none. This distinction separates the reported increase in net profit from the quarter's decline in EBITDA and operating margin.

What recovery does Borosil expect from Q3 FY27?

Borosil expects earnings to revert from Q3 FY27 as production rises and selling prices increase, according to management's presentation. The company said realizations had already returned near Q1 FY27 levels in Q3 after gas prices rose again. This is an expectation disclosed by management, not a reported Q3 financial result. Its stated recovery mechanism is the normalization of the fuel-linked selling price together with higher production after routine furnace maintenance.

The company is also executing a 60% capacity expansion, which would increase installed capacity from 1,000 tonnes per day (TPD) to 1,600 TPD. Borosil describes this as equivalent to raising module capacity served from about 6.5 gigawatts to about 10.5 gigawatts. In its current operations, a solar-wind hybrid plant supplied 78% of renewable power needs. Management said its priorities include improving operating performance and manufacturing efficiencies while addressing solar-glass demand and reducing import dependence.

The expansion is set against a domestic solar-glass demand estimate of 10,400 TPD, equivalent to about 62 gigawatts, compared with current domestic capacity of 2,900 TPD. The presentation projects domestic capacity will rise to 7,900 TPD, or 47.4 gigawatts equivalent, by March 2027, still below the stated demand level. Those market figures provide the context for Borosil's capacity plan, but they do not change the immediate Q3 outcome, which management links to pricing and production normalization.

Conclusion

Borosil's Q2 FY27 result shows that revenue growth alone did not protect operating profitability: revenue increased 4.7% to Rs 396.2 crore while EBITDA fell 7.3% to Rs 116.3 crore and margin fell to 28.6%. The stated causes were temporary fuel-surcharge moderation and reduced production during furnace maintenance. Over H1 FY27, however, EBITDA rose 18.5% to Rs 258.3 crore and margin increased to 31.2%.

The next item to watch is management's stated Q3 FY27 normalization, based on selling prices returning near Q1 levels and production rising after maintenance. Longer term, the execution of the 60% expansion from 1,000 TPD to 1,600 TPD is relevant, particularly against the presentation's projected March 2027 domestic capacity of 7,900 TPD versus demand of 10,400 TPD.