Borosil Renewables Ltd- What is causing the share price surge?

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According to the management of Borosil Renewables, the demand for Solar glass in India stands at 650TPD. Of which 60% is met with imports (Malaysia+China) and 40% of the market is with Borosil Renewables. 

Chinese and Malaysian manufacturer(mostly Chinese manufacturer manufacturing in Malaysia), get lot of govt subsidies which lowers their cost of production.  Indian manufacturers without any short of subsidy are not able to compete with them. That’s explains why Borosil Renewables have been applying for various kind of duties to safeguard the domestic industry(their margins).

Countries such as China, Malaysia & Vietnam have duties on imports of solar glass to their country. But they are free to export to India.

Imports of components used in solar industry has increased as India launched its ambitious national solar policy named Jawaharlal Nehru National Solar Mission in January 2010.

With the current govt, trying to protect the domestic industry from unfair competition is putting in several kind of duties. Also there is a push towards more and more products being manufactured in India to be used in Solar Panels.

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With the imposition of various duties to safeguard the domestic industry, the domestic manufacturing will increase.  There are some schemes running that mandates solar panel to be made in India.                  

Now, let us look at where China stands in the larger scheme of things.

China has the market share of 80% in the global solar panel production capacity. They are also a leader in terms of setting up their own solar capacity. China has a total solar power capacity of 240GW and it added 40GW in the CY2020To give you a perspective, India’s total Solar power capacity stood at 37GW in 2020 i.e. China adds a India every year in terms of new solar capacity. 

 

The industry is asset intensive with Revenue to Asset turnover (Fixed Asset Turnover of 1:1). 

In 2018, with the energy intensive and polluting glass industry facing over-capacity issues, China’s government forbade companies from adding new production capacity. That has led to supply constraint.

 



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Shekhar Yadav

Shekhar Yadav

It was only during the third semester in Engineering that Shekhar overheard a Gujarati guy in his class discussing stocks. After a few discussions with him, he realized that this was what he wanted to do in his life.
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