Borosil shares show 5% crack on weak profit growth in March quarter

Borosil profit declines

Shares of Borosil Ltd fell over 5 percent on Tuesday after the company reported a 35 percent decline in net profit for the March quarter under rising cost pressure.

The company's consolidated net profit for the quarter stood at Rs 22.34 crore against Rs 34.18 crore a year ago, a decline of 35 percent. Sequentially, net profit fell 4 percent.

Borosil saw its profits cracking despite an 18 percent surge in revenue over the last year to Rs 264.32 crore, while its total cost zoomed 12 percent to Rs 235.69 crore during the quarter under review.

For fiscal 2023, the growth in net profit was 6 percent to Rs 90.20 crore from Rs 85.23 crore last year, while revenue increased 22 percent on-year to Rs 1051.91 crore.

Borosil, through its subsidiary Klass Pack Limited (KPL), entered into a binding share purchase agreement (SPA) last month to acquire an initial 90.17 percent stake in Goel Scientific Glass Works Limited (GSGWL), with the option to increase its stake up to 100 percent. Following the completion of the transaction, GSGWL will become a subsidiary of KPL and subsequently a step-down subsidiary of Borosil.

KPL operates in the primary pharmaceutical packaging sector, specialising in the production of tubular glass vials and ampoules. Subject to the approval of the National Company Law Tribunal, Mumbai Bench, for the ongoing Composite Scheme of Arrangement involving Borosil, KPL, and Borosil Technologies Limited (a wholly owned subsidiary of Borosil), the lab glassware, lab instrumentation, and pharma packaging businesses of these entities will be consolidated under KPL.