February 17, 2025

BSE Limited National Stock Exchange of India Limited

Phiroze Jeejeebhoy Towers, Exchange Plaza, C-1, Block - G,
Dalal Street, Bandra Kurla Complex,
Mumbai - 400 001 Bandra (East), Mumbai - 400 051
Scrip Code: 543212 Symbol: BOROLTD

Dear Sirs,

Sub: Transcript of Earnings Call

Please find attached transcript of the Earnings Conference Call held on Tuesday, February 11,
2025.

The aforesaid transcript is also available on the Company's website at [Link].

You are requested to take the same on records.

Yours faithfully,

For Borosil Limited

Anshu Digitally signed
by Anshu Arvind
Arvind Agarwal
Date: 2025.02.17
Agarwal 21:32:49 +05'30'

Anshu Agarwal
Company Secretary & Compliance Officer
FCS – 9921

Encl: as above
 “Borosil Limited
Q3 FY '25 Earnings Conference Call”
February 11, 2025

MANAGEMENT: MR. SHREEVAR KHERUKA – MANAGING DIRECTOR

AND CHIEF EXECUTIVE OFFICER – BOROSIL LIMITED
MR. RAJESH KUMAR CHAUDHARY – WHOLE-TIME
DIRECTOR – BOROSIL LIMITED
MR. ANAND SULTANIA – CHIEF FINANCIAL OFFICER –
BOROSIL LIMITED
MR. RITURAJ SHARMA – PRESIDENT, CONSUMER
PRODUCTS – BOROSIL LIMITED
MR. BALESH TALAPADY – VICE PRESIDENT-INVESTOR
RELATIONS – BOROSIL LIMITED

MODERATOR: MR. ANIRUDDHA JOSHI – ICICI SECURITIES

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 Borosil Limited
February 11, 2025

Moderator: Ladies and gentlemen, good day, and welcome to the Borosil Limited Q3 FY '25 Earnings
Conference Call hosted by ICICI Securities Limited. As a reminder, all participant lines will be
in the listen-only mode and there will be an opportunity for you to ask questions after the
presentation concludes. Should you need assistance during the conference call, please signal an
operator by pressing star then zero on your touchtone phone. Please note that this conference is
being recorded.

I now hand the conference over to Mr. Aniruddha Joshi from ICICI Securities. Thank you, and
over to you, sir.

Aniruddha Joshi: Thanks, Lizann. On behalf of ICICI Securities, we welcome you all to Q3 FY '25 Results
Conference Call of Borosil Limited. We have with us today senior management represented by
Mr. Shreevar Kheruka, Managing Director and CEO; Mr. Rajesh Kumar Chaudhary, Whole-
Time Director; Mr. Anand Sultania, CFO; Mr. Rituraj Sharma, President, Consumer Products;
and Mr. Balesh Talapady, Vice President, Investor Relations.

Now I hand over the call to the management for initial comments on the quarterly as well as 9-
month performance, and then we will open the floor for a question-and-answer session. Thanks,
and over to you, Shreevar Sir.

Shreevar Kheruka: So thank you, Aniruddha and ICICI Securities for raising this call. I wish everyone a good
afternoon. The Borosil team is delighted to be communicating with everyone again. I'm pleased
to inform you that Borosil Limited's Board approved the financial results for Q3 FY '25 and 9
months FY '25 during our meeting on 7th February '25.

We have submitted our results and an updated presentation to the stock exchanges, and they are
also available on the company's website for your review. This quarter, we have sustained our
growth momentum driven by, I would say, not as strong as before consumer demand, but we
have been able to execute across key categories, which gives us industry-leading revenue growth
for both the quarter as well as the 9-month period ended sales.

Our revenue performance remains robust, reflecting the trust consumers place in our brand. We
continue to enhance operational efficiencies and ensure sustainable growth across all business
verticals. I'm pleased to share that Borosil Limited delivered a strong performance in 9 months
FY '25 with revenue from operations reaching INR837.6 crores, up from INR715.1 crores in the
same period last year.

This indicates a 17.1% year-over-year growth. And, as mentioned before, we are one of the
industry's top performers as far as revenue growth is concerned. This underscores the strength
of our strategy, operational excellence, and most importantly, the trust and loyalty of our
customers. It also reflects our ability to tackle challenges head on and make the most of new
opportunities with new products introduced as well as reinforces our Borosil's strong position in
the market.

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 Borosil Limited
February 11, 2025

As far as profitability is concerned, in 9 months FY '25, the company achieved an operating

EBITDA that is before investment and onetime income of INR140.2 crores, up from INR119.3
crores in 9 months FY '24, which is also a 17.4% year-on-year growth, reflecting our continued
focus on efficiency and growth.

The operating EBITDA margin for 9-month FY '25 stood at 17% versus 16.7% in the same
period last year. One of the downsides for us this year was the uniform code for Pharmaceutical
Marketing Practices 2024, which restricts pharmaceutical companies and their agents like
distributors, wholesalers, and retailers from offering gifts.

This has impacted our B2B sales, which was a reasonable portion of our revenues, and that
affected bulk orders and distributor engagements. To counterbalance this, we shifted focus to
online sales, and that has experienced strong growth, although the loss of a key channel or sales
in a key channel has definitely impacted overall sales growth.

Also, given the switch to more e-commerce sales, the marketing expenses have also increased
because of higher customer acquisition costs, and that has put some pressure on margins. As a
result, the company has incurred higher A&SP expenses of INR18.56 crores in 9 months FY '25
and INR5.74 crores in the quarter Q3 FY '25 as compared to the same period last year.

As the Diwali festival being a little bit early this year compared to last does not make the exact
quarter-on-quarter sales exactly comparable. So I think it's better to look at the 9-month sales
data versus specifically looking at Q3 or Q2 sales data because of the 1-month earlier Diwali
this year.

Additionally, other operating income includes INR12.6 crores from shared service support
income for 9-month FY '25 and INR1.2 crores for 9-month FY '24, with the associated expenses
captured under total expenses.

Consequently, profit before tax for 9-month FY '25 came in at INR86.3 crores, up from INR81.2
crores in 9-month FY '24, which includes a one-time income of approximately INR13.5 crores
from the sale of certain tenancy rights at our erstwhile office premises in Mumbai.

At the same time, depreciation and finance costs have increased substantially by INR27.8 crores,
and this was largely due to the commissioning of our new Borosil glass furnace in the last quarter
of FY '24. The investment income was also lower by about INR1.4 crores in 9 months FY '25
as compared to the same period last year. As a result, PAT for 9 months FY '25 reached INR63.1
crores compared to INR60.8 crores in the same period last year.

Furthermore, as per the Union Budget 2024, the discontinuation of indexation benefits on long-
term capital assets, effective July 23, 2024, led to a reversal of deferred tax credit. This resulted
in higher taxation for 9-month FY '25, impacting profit after tax by INR2.7 crores.

Now let's take a closer look at both the category-wise performance for 9 months FY '25. The
Borosil Consumer division continued to expand across both glassware and non-glassware
categories under the Borosil brand, along with our Opalware range under the Larah brand.

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 Borosil Limited
February 11, 2025

The Larah Opalware segment known for its modern design and superior quality reported sales
of INR292.6 crores in 9 months FY '25, up from INR268.5 crores in the same period last year,
reflecting a 9% growth.

In our glassware segment, which includes Borosilicate microwavables, lunch boxes, serving
ware, glass tumblers, and storage solutions, we recorded a very strong year-on-year growth of
22.9% with revenues reaching INR190.9 crores in 9 months FY '25 compared to INR155.3
crores in the same period last year.

The non-glassware segment, which has a range of small home appliances, insulated bottles and
flasks, cookware, and other kitchen essentials also performed quite strongly, posting a 17.8%
increase in revenue. Turnover for the segment reached INR340.9 crores in this year's 9 months
compared to INR289.5 crores in the same period last year.

This impressive performance reflects the successful execution of our strategy to expand the
Borosil portfolio, catering to the evolving culinary and serving needs of Indian households. It
also reaffirms the strong brand equity and broad appeal of Borosil across multiple product
categories.

During the quarter ended June 30, 2024, the company successfully raised INR150 crores through
a QIP to facilitate the repayment/prepayment of long-term project loans and for general
corporate purposes.

Post-issue expenses of INR4 crores, the entire net proceeds of INR146 crores have been utilized.
The company has utilized INR107 crores for the repayment of working capital loans and INR39
crores for the repayment/prepayment of long-term project loans.

Pursuant to the composite scheme of arrangement during the quarter ended 31st December '24,
the company has also paid INR93.07 crores to Borosil Scientific Limited towards repayment of
the loan, including interest.

As of 31st December 2024, Borosil Limited has a net debt of INR20.4 crores.

Through portfolio optimization, we have enhanced efficiency and profitability, streaming our
offerings to focus on high-growth categories.

Our premium product lines have continued to witness strong traction, reflecting evolving
consumer preferences. We continue to invest in design, functionality, and quality enhancements,
further strengthening our leadership in key segments.

In addition, our initiatives in e-commerce and digital have gained strong momentum. By
leveraging technology and consumer insights, we have effectively scaled our reach and
engagement, thereby helping customers.

At Larah, we believe dining should be a perfect blend of beauty and functionality, transforming
everyday meals into memorable experiences. We launched our premia dinner set collection
which is a sophisticated new addition to our premium kitchenware lineup.

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 Borosil Limited
February 11, 2025

The premia collection combines exquisite aesthetics with practical functionality, making it an
ideal choice for contemporary homes. Featuring intricately embossed designs, this collection
brings a touch of timeless elegance and luxury to any dining table.

On the marketing front, our campaigns have delivered a strong impact, reinforcing our brand
leadership.

Our integrated campaigns have helped us to deepen customer connections and expand market
penetrations. We are seeing significant engagement growth across digital platforms, which
reflects the success of our content-driven approach. The focus on brand storytelling and
consumer experiences will continue to be a strategic priority for us.

Additionally, our media engagement and industry outreach have further strengthened our
positioning. As I mentioned in previous calls, I want to reaffirm that since acquiring Larah in
2016, this flagship brand has been on a remarkable growth trajectory.

Larah's success is a testament to our strategic vision, operational excellence, and unwavering
focus on customer satisfaction. Sales for Larah have grown at a CAGR of 22% from INR87
crores in FY '16-'17 to an impressive INR358 crores in '23-'24. Similarly, our non-glassware
segment has emerged as a key growth driver for Borosil with a CAGR of 50%.

Sales have grown from INR23 crores in '16-'17 to INR387 crores in '23-'24. This achievement
reflects our commitment to broadening our product portfolio and staying ahead of evolving
consumer needs.

The commissioning of our new borosilicate glassware furnace last year marks a major milestone
for us. By expanding production capacity, we're not only meeting the growing demand but also
strategically reducing our reliance on imports. This move aligns seamlessly with our mission to
drive a shift from plastic and steel towards healthier, more sustainable glass alternatives.

Our approach of combining product innovation with accessible pricing has resonated strongly
with consumers, particularly in everyday use categories like lunch boxes, which appeals across
all age groups.

As awareness of the benefits of glassware continues to grow, we see this momentum sustaining
in the long run. Our key focus right now is to broaden and strengthen our brand presence. We
are committed to transitioning consumers from plastic and melamine to glass storage and Opal,
while also encouraging greater adoption of microwavable products.

To diversify our portfolio, we've continuously introduced new innovations, including high-grade
steel products and home appliances. Our ultimate goal is to establish Borosil and Larah as a go-
to brand for modern Indian kitchens, catering to every storage, preparation, cooking, heating,
and serving needs.

We are highly confident in the medium-term outlook for our business. While we may experience
periods of slow growth and cautious consumer sentiment, which are natural in market cycles,
our long-term growth potential remains strong.

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 Borosil Limited
February 11, 2025

Our strategy is focused on expanding our consumer reach through targeted initiatives and
launching innovative products that cater to evolving customer needs. We also plan to optimize
our supply chain and marketing efforts to drive maximum impact.

With that, I would like to throw the floor open to questions.

Moderator: Thank you. The first question is from the line of Resha Mehta from GreenEdge Wealth. Please
go ahead.

Resha Mehta: Compliments for the revenue growth considering the muted macro demand. The first is on the
sourcing. I'm fairly new to the company. So first on the sourcing, if you could just clarify that
now glassware with the furnace that we have is everything 100% in-house?

Or how is it for each of the segments, if you could elaborate on glassware and non-glassware, is
there anything that we in-source or everything is outsourced? And what would be the China
sourcing component over here? For each of these segments, if you could also comment on what
would be our utilization for glassware and opalware?

Shreevar Kheruka: Okay. So thanks for your interest in the company. I'll answer this question from multiple
perspectives. As far as I'll go segment by segment.

As far as opalware is concerned, 100% is in-house manufactured and there is no external

sourcing. Coming to glassware, glassware has 3 separate product categories. One is pressware,
which is entirely made in-house after the addition of our new production line. Second is
blownware, which is a very small segment, maybe only 5%, 7% of our overall glassware sales,
and that is imported, and that will continue to be imported.

And the third is what we call tube-made glass products, which are actually manufactured by
Borosil Scientific and that is purchased from Borosil Scientific. So these are the 3 categories. I
would say glassware and even the blown glassware is not bought from China.

So glassware is 100% either made in India or then some quantity comes from other geographies,
but that's hardly 5%, 7% of the total glassware sales. As coming to non-glassware.

Resha Mehta: Sorry to interrupt. Just the last one you said what is it that we get it manufactured from the
scientific ware, which one?

Shreevar Kheruka: These are our glass bottles and our vision glasses, some storage containers.

Resha Mehta: And I mean, from an overall revenue or a manufacturing standpoint, that would be how much
that is basically sourced from?

Shreevar Kheruka: No, we don't share that data. But I would say the vast majority of glassware is the press
production, which is anywhere made in-house. Coming to non-glassware, it's 100% outsourced
at the present moment. It used to be mostly coming in from outside of the country.

But I would say in the last 2 years, we've now about 30% to 35% made in India, 65% is imported
still. With various BIS norms coming into play, I would say, if I have to take a bet in the next 3

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 Borosil Limited
February 11, 2025

years, this will become 70%, 80% in India, and maybe 20% outside of India, that will be the
shift.

And we are also evaluating our production versus outsourced production here. I think we'll be
taking a call very shortly on capex in this area because as you can see, the market is growing,
and we have also done reasonably well in the segment.

So overall, the in-sourcing is definitely the theme and made in India is definitely the theme that
we see across this range. And coming to capacity utilization, I would say, in opalware, we are
roughly at about 85% capacity utilization this year. And in glassware, as far as the press is
concerned, we would be closer to 55%, 60% capacity utilization.

So there's room for growth in both these product categories. The other area is, there's no real on
the non-glassware front, there's no capacity utilization anyway is outsourced. So it doesn't make
sense to have any number on capacity utilization. So yes, I think that answers more or less all
your questions. But some data we can't share.

Moderator: The next question is from the line of Aniruddha Joshi from ICICI Securities.

Aniruddha Joshi: Sir, 2, or 3 questions from my side. So first of all, just wanted to understand regarding this ban
in a way, the metal bottles, etc. So what does the current situation mean the SMEs are, I guess,
allowed to import right now.

But till what time they might be allowed to import again, in India, I guess, the capacity to produce
the products that are getting consumed right now is very limited, the high-quality production
capacity. So what can be the ultimate solution over here? So that is question number two.

Secondly, now that can be a very big opportunity for a successful brand like Borosil because we
can gain market share as the smaller stock unorganized players may struggle to set up the new
manufacturing units as early as Borosil. So what is our strategy in this market?

And lastly, if the steel bottle market itself may in a way decline, can that be taken over by
glassware bottles?

Shreevar Kheruka: Okay. So look, I'll answer the last one first, and the answer is no. Because steel has a totally
different requirement. So I don't think glass can replace steel from an application or from a use
perspective because people go to the gym or sit on the train or go on a bike to work, unlikely
that they will carry a glass bottle for fear of breakage.

So we have, frankly speaking, no alternative but to decide to make this product in India. And I
think very shortly, we'll be doing that. We do see some short-term challenges in terms of revenue
growth I think we've alluded to that in the past also. But I think these are short-term challenges.

As you rightly kind of highlighted, there's actually a very strong medium-term opportunity for
us because when we set up the manufacturing plant here, we are likely to be doing it in a much
more organized way than, let's say, smaller players. And I hope that will give us a long-term
reason to win in this category in a bigger and better way than we have.

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 Borosil Limited
February 11, 2025

So whatever we do, we'll be doing it with some large scale in mind. And I expect that the short-
term headwinds will be able to, let's say, overcome that from a medium-term perspective.

We have imported more products in the short run to avoid or to, let's say, reduce the impact of
the sales slowdown. But yes, there will be some small short-term impact. And we're actively
working even today to increase our domestic sourcing.

The challenge is that we can't even just go ahead and choose any vendor. We really have a lot
of quality control mechanisms, which are in play to make sure we give a quality product to the
end customer. So we can't compromise our brand even if we have the cost of losing sales even
in the short run.

So there are certain challenges. But I think in the medium term, I'm not even saying long term,
but even in the medium term, I think it's a fantastic opportunity for us. And it will only help us
increase our sales and increasing profit in the medium term.

Aniruddha Joshi: The second question is on the small kitchen appliances. So we have entered multiple kitchen
appliances, obviously, at the top end or premium end of the market. So what is the current
revenue run rate and whether the products are available pan-India or we are still present largely
in metros and Tier 1 cities? And how do you see this business panning out?

We see there is some stress at the bottom of the pyramid and overall other kitchen appliance
companies have also reported muted growth rates over the past 2, or 3 quarters. And even e-
commerce is the only channel that is doing well in that kind of market. So how do you see the
market panning out? And what is the 3-year road map for this business as well?

Shreevar Kheruka: See, non-glassware, you can see the growth, 18%, okay, 17.8% to be precise. It's on Page 13 of
the presentation in 9 months. So I can say that non-glassware primarily comprises 3 categories,
that is your kitchen appliances, Second is the hydra, bottles and the third is steel servingware.
And the steel servingware is still quite small. The other 2 categories are, let's say, the dominant
in share from non-glassware.

So I would say we have scaled reasonably well in that segment. And I think the mass premium
segment where we operate, we are not really spending too much money in advertising for this
category. Of course, we spend a lot of money advertising overall for the brand. But for this
specific category, we don't really spend much money. And it's more dependent on customer pull.

And hopefully, you can see reviews on Amazon and other social channels. You'll find that people
generally have a good view of our products. So we are a quality-led company in terms of the
feel of the product, the performance of the product has to really help customers give word-of-
mouth feedback to their friends and relatives. And we have been quite successful over there.

So I don't see that the muted growth from this is something for us at this scale to really be too
concerned about. The larger challenge even here is the supply chain because, again, BIS issues
even in appliances are getting larger and larger.

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 Borosil Limited
February 11, 2025

Although we have successfully transitioned a lot of this range from India to Made in India. There
are a few products that still are not in the ecosystem, the vendor ecosystem doesn't exist in India.
But I think we'll be able to find solutions here in terms of the supply chain, the supply chain for
the steel bottle is more critical at this stage at least compared to the appliances.

But overall, I believe this market has substantial potential. We are available, like you rightly
mentioned, more in metros. But actually, we are seeing the penetration increasing in terms of a
number of retail outlets in which our appliances are available. But I would say it's still the tip of
the pyramid.

There's a huge number of places where we are not available. And our team is working diligently
to add those areas wherever it makes sense. But online, I think we have a fairly good presence
even here. But on the trade side, I think there's still a lot of work to do.

Aniruddha Joshi: Sir, last question, and then I will join back in the queue. So what is our current channel-wise
mix, let's say, in 9 months FY '25? So general trade, even modern trade, e-commerce, including
our own website and other e-commerce? And also, what is our strategy for quick commerce?

Lastly, we have seen there is a lot of stress in the MFI channel also. So, one is Borosil present
in the MFI channel? And again, this means, is there any impact we have also observed in that
channel?

Also, in the case of CSD, some of the companies have said that there is inventory correction
happening and that can lead to relatively lower primary sales, while secondary sales may remain
healthy. So again, what is our impact due to the changes in CSD norms per se? Yes, that's it
from my side.

Shreevar Kheruka: Thanks. Aniruddha. You said one question, you've asked ten there anyway. To answer your
questions, I would say that as far as percentage share of channels is concerned, we don't share
that data. And I would not like to share it either. We want to reach the customer.

The basic strategy is that the customer is who we care about, how to reach the customer that the
customer chooses, whether he or she wants to buy online, wants to buy on quick commerce,
wants to buy on trade, that's the customer's prerogative. We have to be everywhere.

And wherever the customer decides to buy our product, they will find it there. So that's actually
the strategy, not necessarily speaking quick commerce or e-commerce or those are just means
to the end. And those channels, every time there's a change in their own competitive intensity,
their own desire to kind of penetrate the market.

So, we just follow those trends. We are not making those trends. But yes, to substitute plastic in
the kitchen, to substitute, let's say, melamine, these are the strategies that we have and the
channel is just a means to achieve that end.

As far as the question of the channels is concerned of MFI rather specifically, we are not directly
present in MFI. And therefore, you're right, there has been some, at least what I've heard is that
there has been some stress there.

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February 11, 2025

We have not been impacted because we didn't have much revenue from that segment. Not to say
we won't participate in the future. But at the moment, we don't have much revenue directly.
Maybe some of our distributors would be doing it on their own independently, but nothing direct.

Coming to CSD, you're absolutely right. You have good research. There has been some
correction in stocking at CSD. But these things happen in business every 2, or 3 years, something
or the other happens. So sometimes something grows a bit less, sometimes it grows more. I
would say that's just a general business case.

So I would not highlight it. The one thing that has to be highlighted, which I also shared in my
opening remarks, is the gifting reduction in B2B for your pharma companies, this has definitely
impacted not just us but the whole industry. So that is something that is a one-off. I do believe
that eventually, this should come back. But at the moment, I would say that if I had to pick one
thing in the whole year, that was the biggest impact from a sales perspective for us in this year.

Other things are business as usual, whether it's an increase in quick commerce or a decrease of
any other channel. Those are just normal things, and I would not say they are from a larger trend
perspective, they are not that meaningful.

Moderator: We'll move on to the next question. That is from the line of Dhaval Shah from Girik Capital.

Dhaval Shah: Very good growth in non-glassware compared to the industry. So sir, my question is related to
the brand extension in terms of getting more products and to support our growth going forward.
So if you could tell us more about it. Also, opalware now seems to be hitting full utilization, and
we are already at INR400 crores annual run rate. So how do we get growth going forward from
the opal segment? And also the newer categories, which we had spoken about. So how do we
get growth for the future years?

Shreevar Kheruka: Yes. So we are actively working. Let me talk about categories first. Although we ourselves say
opalware, actually, the appropriate definition for that is not opalware. The appropriate definition
is dinnerware. We say as opalware, let's say, serving wear is the appropriate definition for that
category.

Now in opalware, we do see more competitors coming also maybe in the future. But there is still
a lot of scope in the broader category of serving to substitute plastic, melamine, and even bone
China. So we are actively working on other materials. And hopefully, soon, we should be able
to launch some products. I don't know how the scale will work over here. But that's certainly
something we're working on, and we will be launching in the next few months, new products in
the general dinner or serving ware segment.

We also have other products, other categories we are working on, in the non-glassware space,
which I believe we will also probably look at launching in the next 3 to 6 months. So I would
say that new categories will drive some percentage of growth.

Obviously, when you launch a new category, there's no guarantee of success. We have succeeded
many times. We also failed many times. So we keep trying, and I believe that if we do the right
process, we should have a fair share of successes.

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February 11, 2025

But I would not like to comment too much on that because it's still work in progress. And
hopefully, that should also cover some percentage of, say, losses that happen in the short term
coming from things like BIS implementation.

So let's not look at opalware growth. I don't have any answer for you specifically that how
opalware will grow, but I do have an answer on how serving ware will grow. And I have always
maintained that overall as a company, we should have a 15% to 20% kind of medium-term
CAGR, which I still believe that we can achieve.

Although in the very short run, there may be some challenges owing to BIS, but I would say we
should be able to overcome that. And if you look at historical numbers from 2016 till now, even
through COVID, we have grown at better than 20%. So while, of course, the base grows higher,
I would say that 15% to 20% is achievable when we look at new, new category launches as well.

Dhaval Shah: Sir, 2 questions on this topic, sir. So one is now when we say about newer category of products
we get into. So in the dinnerware you have a lot of, you say Bone China or maybe something
else. So in terms of positioning of the products, so we have glassware, I mean, borosilicate glass
though not as pure dinnerware, but as at the premium end of the pyramid, and then we have
opalware.

So the newer category would be priced below that or somewhere in between. So, as I can
understand, we will be occupying more shelf space at the retailer end. So how the pricing would
work because yes, giving the premiumness of Borosil as a brand in the consumers' minds. Then
I have other questions. This one, please.

Shreevar Kheruka: Okay. So you mentioned that glassware is the high end of premium, that's not entirely correct.
It's probably a mass premium product, slightly higher than mass premium, but there are also
other products that are even more premium than glass.

So, we are evaluating entering even further more premium categories as one option. But in
principle, we don't really go after markets which are too low in cost. That's not like, say,
melamine, that's not the idea to get into those kind of categories where it's not good for you or
not good for environment, not good for health. So we'll not enter those categories.

The idea would be to look at categories which are good. Our tagline performs beautifully. So
products that have some high performance and they must look good also while performing. So
those are categories where we will enter.

I would not like to give too much away at the moment because it's still work in progress. When
we launch it, we'll definitely talk about it. But it's not necessary to say that glass is the highest
end. There are even many categories that are more premium than glass.

Conversely, there are categories which are cheaper than opal, but also are healthy and which
may be looking for some disruption. So those are also categories we can think about. But I would
not like to comment more on it until we actually have a firm launch of those products.

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February 11, 2025

Dhaval Shah: And now the other question is on the margins front. So 2 things here. So one is that this quarter,
the margins were clearly below expectations of the investors. So there must be some line item
that could have seen a lot of inflation, a lot of onetime maybe.

So I would like to understand in detail about it. And secondly, now in the short term, is there
some cost or some BIS regulation as a one-off it could be, which could put further pressure on
the margin? So as over a longer-term period, a 2-year period, we are aiming to have a 20%
EBITDA margin at a company level. So in that journey, what should we be expecting?

Shreevar Kheruka: I'll refer to EBITDA margins because going after PAT doesn't make sense right now because
our depreciation has skyrocketed, which is always expected given the capex invested. So if you
look at EBITDA margins, we are roughly around 17.5% EBITDA margins.

And as mentioned already, it's not a gross margin issue. It's an EBITDA margin issue, okay?
Gross margins, which we don't share of course the data, so you don't have it, but our gross margin
has actually been growing. Even this year, we have grown at least 2 percentage points in gross
margin across all the categories.

The challenge has been, as I mentioned earlier, there's been a change in channel mix, and
advertisement expenses for online have increased which has contributed to this. The second
thing is because, again, this a course change in channel mix, things like institutional sales, which
were relatively more profitable because normally, these are large volume orders, they are more
efficiently producible and they are delivered at one location.

So freight costs are lower and so on, plus manpower costs are lower because these are large key
customers. So the loss of the pharma, let's say, orders have definitely contributed to some
reduction in margin.

Now I would say that's a temporary phenomenon that should reverse itself. So we look at the
gross margin and the gross margin is more, I would say, indicative of any challenge, let's say, in
the category itself, which we don't see. So the number which I have also always mentioned that
in the next say, two, or three years, can we increase our EBITDA margin to beyond 20%. I think
that is very much on the cards.

There will be short-term blips. It's never a straight-line increase. So we are going through one of
those blips. And given the fact that gross margins are improving, I'm not too worried about it.

Dhaval Shah: Would that be a related issue that could come would be in terms of higher sourcing cost and
thus, again, some pressure on the margin? Is that what you mean?

Shreevar Kheruka: See, the higher sourcing cost would be applicable for everybody in the whole industry, okay?
So in my opinion, that should not reduce margins because the product price may go up and the
total demand of the product may suffer to some extent if you increase the price. I don't think the
margins will be impacted there. Your revenue growth may be impacted for sure.

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And in the short term, if you're not able to get the full supply chain in order, you have fixed
overhead, which you will not be able to absorb, okay? The short-term margin impact will only
come from overhead, not from the actual gross margin of the product.

And in the long term, the impact will be dependent on how efficiently we can make the product
in India. And therefore, how little an impact it will be -- there will be definitely some impact to
the end customer in terms of higher selling prices, but how we can limit that impact? But I would
say I don't see any margin impact because of this in the medium-term at all, only revenue growth
in that.

Dhaval Shah: Sir, when are the BIS norms kicking in?

Shreevar Kheruka: They've already kicked in.

Dhaval Shah: So is there some quota in terms of reduction of imports? Or how is it?

Shreevar Kheruka: No, there's no quota per se, but fresh imports are not allowed.

Moderator: The next question is from the line of Aman from Seven Rivers.

Aman: So my first question is on opalware. We haven't grown much there in this quarter. And since we
had launched some premium products recently, does that mean there was volume loss in this
quarter?

Shreevar Kheruka: No, actually, volume growth was higher. The premium product is just a small percentage of
overall sales, at least at the moment. There's no volume loss. In fact, like I said, volume growth,
overall 9-month revenue growth of 9% volume growth is probably slightly higher than that. But
again, I'll just repeat the main issue was because of the loss in institutional sales, which has
impacted the revenue growth of the organization. And because most of that has come out of the
opalware sales.

Aman: And my second question is on the utilization of glassware capacity. So when do we expect to
reach the maximum capacity there?

Shreevar Kheruka: Well, we have overall given three years as, let's say, the time frame in which we should utilize
the whole glass capacity. But we hope to do it in two. Let's see. It's only year one, which we are
going through at the moment. So it depends on the market.

I mean we are not really having a lot of tailwinds from a market perspective at the moment. So
we would hope that we have some more tailwinds. And if things go well in terms of our new
product development, even in glassware, I do hope that we can do this in two years. But in any
case, it should not be longer than three.

Aman: So it's fair to assume like FY '27, we should be able to completely utilize this?

Shreevar Kheruka: Yes, absolutely.

Aman: And do we have a number for steady-state EBITDA margins then?

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Shreevar Kheruka: Yes, we have already indicated that we expect somewhere in the 20% to 22% EBITDA margin
overall.

Aman: And my other question is again on other expenses. So other expenses have come in higher than
last year, like you mentioned. But in our Q2 call, we were expecting some normalization in ad
spends from this quarter on, right? So are we expecting ad spends to stay elevated for some time?
If you could give us some time line there?

Shreevar Kheruka: Yes. Like I said, the challenge has been the channel mix because the e-commerce has become a
larger share. So normally for e-commerce, you have to spend more advertising money to keep
sales localized. And that because of the B2B business reducing the ad spend has kind of been
impacted in a negative way, meaning we have to spend more.

It's hard to give you very short-term input on this in what will happen in Q4, and Q1. In the long-
term, we have always indicated that at a certain scale, our ad spend should come down, and that
will also be a part of the operating leverage, which I still expect it has to happen. But
unfortunately, in the very short run, in quarter-on-quarter, it sometimes gets impacted. But I do
expect our ad spend used to be 10% at some point. Now it's down to 8%. And hopefully, over
the next two, three years, it should come down to 6%. And I think we should be able to maintain
that.

Aman: You just said that there was some slowdown on some of the channels. Is it like a broad-based
slowdown? Like in all the channels, are we seeing some slowdown? Or how do you see?

Shreevar Kheruka: Generally, you can see data across. There has been a general consumer slowdown. I mean, it's
not just restricted to kitchen products. If you look at numbers shown by most of the consumer
facing companies, I don't think there's been really very aggressive growth. So in general, there
is a slowdown. And specific for us, there was a slowdown in the B2B channel.

Aman: Another question I have is on sir, would you have a number for us for change in margins when
it comes to importing bottles versus, let's say, sourcing them from India manufacturing?

Shreevar Kheruka: At the moment, I can't share. I mean that's too early. It's too early.

Aman: And how much do these bottles contribute to sales?

Shreevar Kheruka: See, non-glassware is about 1/3 of our sales, if I'm not mistaken. And this is a large chunk of
non-glassware. It's about 40% of our sales. And yes, it's about half of that, let's say 20%.

Aman: 20% or so?

Shreevar Kheruka: Yes.

Aman: And the last question I have is, so we are doing about INR20 crores in depreciation every quarter.
Can we expect this number to come down next year since the second opalware furnace might be
near full depreciation, right?

Shreevar Kheruka: No, no. The depreciation takes about five, seven years, if I'm not mistaken.

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Aman: So this number will be around this INR20 crores for the -- throughout next year, right?

Shreevar Kheruka: Yes. Is not a bad thing.

Aman: And sir, do you have any capex plans to be shared with us for next year?

Shreevar Kheruka: At the moment, I have nothing specific to share. But like I told you, thematically, we will have
to put the most likely the capacity for the bottles here in India. And that will have some capex.
I don't know the exact number, but my sense is somewhere in the INR50 crores to INR70 crores
range would be the capex.

Aman: INR50 crores to INR70 crores for bottles for next year?

Shreevar Kheruka: Yes. This includes working capital and everything.

Moderator: The next question is from the line of Akhil Parekh from B&K Securities.

Akhil Parekh: Sir, my first question is on the opalware. I mean you have mentioned the reason for weakness in
sales in opalware mainly because the gifting sales has not happened. Would you be able to
quantify how much is the impact or maybe broadly how big was gifting as a percentage of all
these?

Shreevar Kheruka: I would say it's cost us at least about 10% of revenues of our opal revenues.

Akhil Parekh: And this is like a permanent loss, I believe, right? I mean it's not going to come back next year
because of this.

Shreevar Kheruka: Look, I don't know very well, but I think there's some change now. So maybe we'll expect this
to bounce back. But it's not clear to me yet.. So when we get orders, we'll tell you.

Akhil Parekh: And secondly, you mentioned that the capacity utilization is already at 85%, right? I mean we
know that it takes a lot of time for a glass facility to come on stream.

So theoretically speaking, I mean, shouldn't we have already started building a new facility? Or
is it that the channel level inventory in Opalware is right now at a higher level? And it might
take more time for that capacity to get absorbed.

Shreevar Kheruka: See, firstly, we are doing debottlenecking for our current capacity. And so our furnace will be
down this quarter, 1 furnace will be down next quarter for rebuilding. When we rebuild these
furnaces, we will increase our capacity by roughly 10% as it is. So our capacity will go from
100 units to 110 units in this coming year just by simple debottlenecking.

Then we have another potential to further debottleneck, which could maybe increase it from 110
to 120 units about 2 years out. So effectively, we have room to go from 85 to 120 in the next 2
years. In this interim, we do see competition may be increasing here. So we should then evaluate
whether we want to focus more on this category or look at other categories within the dinnerware
segment. We see some opportunities there as well.

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So at this moment, we are not ready to commit to any further opal capacity increase, except for
the 100 to 120 sales journey, which will happen just with very minimal capex and will happen
organically in the next couple of years.

Akhil Parekh: It's a bit surprising to hear that competitive intensity has gone up in opalware ,we always thought
that it's very difficult to have opalware capacity and the business is very complicated. And the
market size is not big enough for the other players to kind of enter into this segment.

Would you be able to comment on which are the players because our channels in past, like a
year back were indicating built and probably trying to enter into this segment. Is that correct?
Or maybe if you can throw some more light on competitive intensity part?

Shreevar Kheruka: So your assessment is right in that there is very few players can play in the segment because of
the challenges that you already mentioned. But there are at least 5 players in India who can do
this, out of which 3 are already playing. So our understanding is that a fourth player coming in
this segment. It's coming, it's about to come.

Akhil Parekh: But if we don't expand in opalware, I mean, my ballpark assumption is that 50% of our operating
profits are coming from the opalware segment as a percentage of the total. And if we don't grow
in that segment, our margin trajectory won't it get impacted because of that?

Shreevar Kheruka: No, that's not correct because glassware also will actually may have even better margins than
that. And we are growing aggressively in glassware. And glassware capacity utilization, as
already mentioned, is, say, 55%, 60% long way to grow. And we can further expand capacity
quite organically over there in, I would say, in a relatively low capex manner.

So I would not jump to that conclusion that Opalware is the only one that's profitable.. So we
have other levers also. In non-glassware also, there are other product categories, which we can
start working on and then also get into manufacturing there.

So there are many levers to increase the margin. Opalware is one, glassware is the second. And
the BIS implementation will also open up at least 1, if not 2 more avenues for margin expansion.
Again, the reason I don't talk much about it is we should prove it and then talk about it. So no
point in giving something and then everything takes time. So anything new we do does take 12,
18, or 24 months to see results.

So in the very short run, that it's not likely to happen. But in the medium term, all these market
changes may give big opportunities to existing players.

Akhil Parekh: And just 2 last questions, if I can squeeze in. One is, so capacity-wise, like glassware and
opalware is completely in-house sourcing, right? And non-glass is completely outsourced at that
point?

Shreevar Kheruka: Broadly, yes.

Akhil Parekh: And in the pressware facility, the end product would be drinking glasses or with the --

Shreevar Kheruka: Lunch Boxes.

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Akhil Parekh: And these are largely imported at this point of time, if I'm not mistaken?

Shreevar Kheruka: No, we make it all. It used to be imported.

Akhil Parekh: It used to be. I mean, so it's more of an import substitution plus domestic growth. I mean that's
what I'm gonna say.

Shreevar Kheruka: That's right.

Moderator: Ladies and gentlemen, that was the last question. I now hand the conference over to the
management for the closing comments.

Shreevar Kheruka: Okay. Well, thanks, everyone, for the interest in the company. And I just want to end by saying
that as already mentioned, revenue growth has been good. Margins, definitely, as you can see,
there are some challenges. But from an organization perspective, our concern is always 3, 5, 10
years out. And in that particular thing, we do things to grow the organization from that
perspective, even at the cost of short-term decision-making, which can improve margins or
which can help you in the short run to show, let's say, better numbers, but it may hurt growth.

So our focus has been on growth, on communicating to customers what we're all about, on
spending money on developing teams. And definitely, when you have quarters such as a couple
of ones that have just gone by where demand has not been so robust, then you do see some short-
term impact on the margin. I'm not too worried about it.

I think we have to build a company which is very strong and customer-centric for the future.
India's opportunity is vast, and that's how we look at the business, not specifically too worried
about quarter-on-quarter from a margin perspective. It's just a kind of thought I would like to
leave everyone with. But really thank you for your support and your engagement and look
forward to speaking with you next time. Bye-bye.

Moderator: Thank you, members of the management team. Ladies and gentlemen, on behalf of ICICI
Securities, that concludes this conference call. We thank you for joining us, and you may now
disconnect your lines. Thank you.

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