Can Borosil Renewables Pull Off a Tata Motors Style Turnaround?

Warren Buffett once said, "Turnarounds seldom turn".

His advice is grounded in decades of experience - that it's often wiser to invest in a good business at a fair price than to bet on fixing a broken one.

Honestly, I think that's solid advice. I, too, approach turnaround stories with a healthy dose of scepticism. Betting on a struggling company getting its act together can be risky - sometimes you just end up throwing good money after bad.

But let's not throw the baby out with the bathwater either.

Take Tata Motors, for instance. The company went from posting a loss of Rs 287 bn to a net profit of Rs 318 bn in FY24.

Whether or not you'd invest in it today, you have to admit - that's the kind of turnaround that deserves to be studied. It's proof that under the right conditions, with the right moves, a struggling business can bounce back.

Now, here's one company I've got my eye on: Borosil Renewables.

It is a leading manufacturer of solar glass, with over 40% market share in domestic production in India - and it also led in Germany. Its products are used by solar module manufacturers across India and abroad.

But the last couple of years haven't been kind.

It has taken a hit from cheap solar glass imports flooding the market from places like China and Vietnam. As a result, it has posted losses for two consecutive years, and return ratios have dipped into the red.

But here's where it gets interesting.

Recently, the government imposed anti-dumping duties on imported solar tempered glass from China and Vietnam . This has been a huge breather for Borosil Renewables. It's helped the company get better prices for its products.

Add to that a growing demand for solar modules and an opportunity for import substitution (imports still make up over 50% of consumption), and the picture starts looking a little brighter.

It has also been burning cash on its German subsidiary. But with a new European government actively backing domestic investments in solar manufacturing, there's optimism that things could improve on that front too.

Still, the most reassuring signal for me isn't the policy support. It's the promoter's own bet on the business.

But before I go there, let's take a step back.

We often see articles highlighting that a well-known investor or a big mutual fund has bought into a company. And that tends to grab a lot of attention, especially among retail investors. There's this obsession with "smart money" - the idea that if the big guys are buying, the stock must be a winner.

And sure, sometimes that's true. But here's the catch: just because an institutional investor bought in, especially through a QIP (Qualified Institutional Placement), doesn't guarantee future gains. In fact, there are plenty of cases where the stock has fallen after such fundraisings.

Why? Because these investors, for all their expertise, are still outsiders. They don't run the business - they're just betting on it. And often, these placements happen at premium valuations, when companies need capital the most.

Now contrast that with something else: insider activity - specifically, promoters investing their own money into the business. For me, that speaks volumes.

One type of insider activity I really track is preferential allotments to promoters. Unlike QIPs, preferential issues allow promoters to participate, along with other investors. The money raised could go towards debt repayment, working capital, or growth initiatives. Plus, it helps promoters maintain their stake without heavy dilution.

And the price at which these shares are issued? That's a key data point.

If a promoter is willing to infuse capital at a certain price, it likely means they see a lot more value ahead (as compared to the price they are infusing money at).

So here's what's happened with Borosil Renewables:

A few months ago, it raised Rs 1 bn through a preferential issue to promoters- 18.9 lakh shares issued to promoters at Rs 530 per share.

Along with that, 112.7 lakh warrants were issued to non- promoter investors, also priced at Rs 530, convertible into equity within 18 months. That's another Rs 6 bn raised.

What's the plan for the money?

A part of it goes toward repaying debt. The rest is earmarked for capacity expansion - to benefit from the shifts I mentioned above.

And as I write this, the stock trades at around Rs 558 per share - not far from where the promoters put their own money in. That's not something to be ignored.

With regulatory tailwinds, improving global outlook, and the promoter's skin in the game, I think Borosil Renewables is a potential turnaround story worth watching. It's not a guaranteed success - none of them are. But the pieces are falling into place.

What do you think?

Let me know your views in the comments.

Warm regards,


Richa Agarwal
Editor and Research Analyst, Hidden Treasure
Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst)