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Borosil expects ₹27 crore quarterly profit boost after exiting German operations

Borosil Renewables expects a ₹27 crore jump in quarterly profit after its German subsidiary GMB Glasmanufaktur Brandenburg GmbH filed for bankruptcy and ceased operations. The company has stopped funding the unit, which was posting losses of nearly ₹9 crore each month due to weak local demand and rising competition from Chinese imports. The German subsidiary was a loss-making entity that contributed 22% to the company’s revenue but had little to no impact on the bottom line. “There has been a significant demand constraint because of stoppage of manufacture of solar modules in Germany. All of these are now being imported from China,” said Pradeep Kheruka, Chairman of Borosil Renewables. He added that a newly elected German government is yet to take a clear stance on supporting the domestic solar industry, leaving no visibility on a turnaround. Under German law, the subsidiary was required to file for insolvency once it could no longer fund its operations for the next two weeks. An interim administrator has now taken over and will assess the future of the assets over the next three months. “We decided it was not fair on Indian investors for us to continue to bleed in this manner,” Kheruka said. Borosil's debt exposure to the subsidiary stands at €35 million, of which €27 million was funded directly by Borosil Renewables. However, the company may still recover some of its investment in land, building, and new machinery at the plant.