Express Pharma

Borosil Glass Works Limited registers standalone revenue of Rs 119.6 crores

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EBITDA grew by 44.4 per cent during the period compared to H1FY16

Borosil Glass Works Limited (BGWL) achieved standalone revenue of Rs 119.6 crore recording a growth of 27.3 per cent during H1FY17 over the same period in the previous year. This performance was led by a very robust growth of 39.5 per cent in the Consumer Products Division (CPD) and a strong growth of 16.3 per cent in the Scientific & Industrial Products Division (SIP). Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) grew by 44.4 per cent during the period compared to H1FY16. The company recorded improved margins as it benefitted from a higher scale of operations. Operational growth was accompanied by growth in investment income. Net profit after tax grew from Rs 10.6 crore in H1FY16 to Rs 20.6 crore in H1FY17, a growth of 94.5 per cent.

The Board of Directors of BGWL, Hopewell Tableware, Vyline Glass Works and Fennel Investment and Finance at their respective meetings held recently, approved a Scheme of Amalgamation of three related companies with BGWL in order to derive synergies by bringing these entities under a single entity and pursue growth opportunities for the future. This move would also reduce the extent of related party transactions and eliminate cross holdings to simplify the group structure.

The scheme envisages the amalgamation of the following entities with BGWL: (1) Hopewell Tableware, a 100 per cent subsidiary of BGWL, (2) Vyline Glass Works (Vyline), a promoter held company and (3) Fennel Investment And Finance, an associate company. This will help to reduce operational cost and increase operational efficiency.

As per Shreevar Kheruka, MD, BGWL, “Our vision is to be the most customer-centric company in India. The company’s strategy of leveraging its strong brand and distribution channel by organic as well as inorganic expansion into new product categories has started resulting in attractive growth numbers. With a more simplified corporate structure, the implementation of GST around the corner and further operational improvements from growing scale expected in the next couple of years, both the divisions of the company are likely to benefit in the future with CPD and SIP expected to grow at over 15 per cent and 12 per cent respectively in the medium term.”
On January 29, 2016, the company acquired 100 per cent equity share in Hopewell Tableware, marketing its products under the brand ‘Larah’. With Larah, the company has gained participation in the fast growing opal glass market. During H1FY17, Larah recorded Rs 44.6 crore sales as against sales of Rs 48 crore during the full year FY16. The company’s strong pan-India distribution network, sales presence and channel loyalty has lent scale to Larah. The company has also commenced a mass media marketing campaign and the initial response has been very encouraging.

On July 29, 2016, the company acquired 60.3 per cent equity share of Klasspack, a Nasik- based manufacturer of glass ampoules and tubular glass vials. Hitherto Borosil was marketing lab glassware to pharma companies for their research lab and quality control lab needs. With the addition of the Klasspack range to its portfolio, the company can now service the product manufacturing glass packaging needs of its existing customers. During the two months up to September 30, 2016, Klasspack achieved revenue of Rs 6.5 crore as against revenue of Rs 28.8 cr during the full year in FY16. The company’s revenue inclusive of Hopewell and Klasspack during the period H1FY17 was Rs 170.7 crore as compared to Rs 93.9 crore during the same period in the previous year. These figures are not comparable as the H1FY17 figure includes revenues of companies acquired post H1FY16.

The company has used acquisition of synergistic businesses as a means to supplement organic growth. Organic growth in both the business divisions has been achieved by improved sales in the existing range of products as well as the introduction of new products, thus selling more to the same set of customers. In CPD the new product range includes lunch boxes, storage products and kitchen appliances. These are expected to leverage the lifestyle changes towards convenience and improved presentation that the modern Indian homemaker is looking for. The company sells its products through different channels including modern retail and traditional trade with the target segment being the aspirational middle class customer.

In SIP, the company introduced the brand ‘Labquest’, with a range of bench top instruments. In this division, the company’s diversified and large product range, international quality benchmarks and nationwide ‘Just In Time’ supply abilities ensure strong brand loyalty and high customer retention. In addition to the domestic market, where the company is the undisputed leader for glass consumables, it has also forayed into exporting its SIP range of products to the Middle Eastern, African and South East Asian markets.

EP News Bureau

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