Ladies and gentlemen, good day, and welcome to the Borosil Renewables Limited Q4 FY22 results conference call, hosted by Axis Capital 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. Kevyn Kadakia from Axis Capital Limited. Thank you and over to you, sir.
Yeah, thank you, Faizan. Good afternoon, everyone. I'm Kevyn Kadakia, part of research for capital goods and logistics sectors at Axis Capital. On behalf of Axis, I'm pleased to welcome you all for the Borosil Renewables Limited quarter and full year ended March 2022 earnings conference call. We have with us the management team today from Borosil Renewables, which is represented by Mr. P. K. Kheruka, Executive Chairman, Mr. Ashok Jain, Whole-Time Director, Mr. Sunil Roongta, CFO, and Mr. Swapnil Walunj, Head of Marketing. We will begin with the opening remarks from Mr. P. K. Kheruka, followed by a Q&A session. Thank you, and over to you, sir.
Good afternoon and welcome to the Borosil Renewables FY 2022 investor call. It is a pleasure to be interacting with you once again. The board of the company approved the company's financial results for fourth quarter for the financial year 2022 and for the whole year 2022 as well on the fifth of May. Our results and an updated presentation have been sent to the stock exchanges and have also been uploaded on the company's website. During the year gone by, the company recorded net sales of INR 644.2 crore, an increase of 28% over financial year 2021. Sales volumes on a quantitative basis grew by 11% over the year. Net sales are also boosted by higher average ex-factory prices of tempered solar glass during the year.
Average prices during the year were about 133 rupees per mm per square meter as compared to rupees 119 per mm per square meter in financial year 2021, an increase of 12%. Export sales during financial year 2022, including to customers in SEZ, were INR 171 crores, comprising 27% of the turnover, an increase of 55% over financial year 2021. While direct exports were INR 127 crores, up from INR 67 crore in financial year 2021. During the last quarter of financial year 2022, the company recorded net sales of INR 179.1 crores. From a quantitative standpoint, sales volume were 2% higher than for the same quarter in the last year.
However, owing to a lower average ex-factory selling price by about 14%, the sales value was lower by 8%. For the year gone by, in addition to the inflation in prices of natural gas, soda ash, packing materials and other commodities, seen more so in the second half, logistic costs have also escalated disproportionately. However, higher annual average realizations for the year have covered these cost increases. EBITDA during financial year ended 2021, 2022, including a subsidy of INR 9.7 crores from the government of Gujarat, was INR 265 crores, corresponding to an EBITDA margin of 41.1% as compared to an EBITDA margin of 40.4% for the year ended March 2021.
During quarter four FY 2022, EBITDA margin was 34.9% as most part of cost increases took place in the last 3-4 months of the financial year, whereas the selling prices prevailing during this period were at the previous lower levels. Consequently, the cost increases are not commensurately covered in the selling prices. High EBITDA led to an increase in the profit after tax, and the company has recorded a profit after tax of INR 165.9 crores, which is an increase of 85% over FY 2021. Profit after tax during quarter four FY 2022 was INR 46.4 crores. This is a decline of 31% as compared to quarter four FY 2021, which was an exceptionally high base quarter, driven by the then prevailing high prices of solar glass.
The profit after tax as a percentage of sales during the last quarter for the financial year 2021-22 was a healthy 25.9%. The demand for solar glass remains high in both the domestic and export markets. The current geopolitical climate has also heightened the need for power security by enhancing solar capabilities available from domestic production. The country has seen solar installations rise to over 12.4 GW in the financial year 2022, which is almost 80% higher than the previous year.
This is expected to rise exponentially in the coming years, led by the policy and fiscal measures undertaken by the government in the recent past. There has been a significant import of modules in the last quarter of the financial year 2021-22 by developers and others to avoid payment of basic customs duty, which came into effect from April 1, 2022. While this may to an extent impact demand for components during the current quarter, we see no signs of this nature. During financial year 2022, the average gross pull of glass from our furnaces was 443 tons per day on a capacity of 450 tons per day. We have been producing at capacity and selling out the entire production.
As many are aware, the company has undertaken a brownfield expansion project, SG3, to enhance the capacity by another 550 tons per day, bringing the total production from this location up to 1,000 tons per day during the second half of this year. Global supply chain bottlenecks are likely to delay the commissioning by two or three months. This will significantly enhance the capacity and capability of the company to meet the growing demand for current products as well as the larger sizes glass, which are becoming more popular. As some of you are aware, the company entered into an agreement to acquire a 100% stake in the Interfloat Group, the largest solar glass manufacturer in Europe. Interfloat Group has a production capacity of 300 metric tons per day in solar photovoltaic, solar thermal, and greenhouse glasses.
It has manufactured solar glass since 2010 and enjoys deep-rooted relationships in the European glass trade for over 40 decades. The acquisition was made for a consideration of EUR 52.5 million, which is tantamount to about 425 crore INR. There is an additional consideration payable based on performance over 2024, 2025, and 2026 by sharing the EBIT, but not exceeding 50% of each respective year. During the calendar year 2021, the Interfloat Group posted a revenue of EUR 60 million, which works out to about 525 crore INR. The acquisition will accelerate investments in new products and technology development in Interfloat that will benefit customers.
Borosil's expertise in achieving high efficiency in the manufacturing process to enhance throughput and lower costs will bring economies of scale to Interfloat's expansion and manufacturing plans. We expect a significant jump in the demand for solar glass in Europe in view of the enhanced focus by the governments to reduce dependence on Russian gas and Chinese solar components. Many new module manufacturing plants are expected to be commissioned besides capacity expansions by the existing manufacturers. Customers of solar glass in Europe are looking for availability of higher volumes from a diversified and reliable supply chain with domestic roots. There is a plan to increase the capacity at the Interfloat plant from 300-500 tons per day in the next 18 months.
The current SG3 expansion in India will take Borosil Renewables domestic capacity to 1,000 metric tons per day by September 2022. Together with the 500 tons per day enhanced capacity from its European operations and proposed SG4, the company expects to have a total capacity of 2,050 tons by the end of the year 2022-23, while de-risking production from a single location. The company also plans to further increase its capacity to 2,600 tons per day in calendar year 2025 by way of SG5. We are pleased with the performance in financial year ended March 2022. We saw increased sales serviced at virtually 100% capacity production from the factory.
The implementation of the third furnace has progressed well, but for small unforeseen delays owing to global supply chain issues which are outside our sphere of control. We have completed the acquisition of Interfloat to establish an on-ground presence in an important market for Borosil Renewables. I'm proud of our team's achievements and look forward with confidence to continue doing their best in the future with a larger team that now includes our colleagues in Europe. With that, I would now like to open the floor to questions you may have. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Reminder to the participants, anyone who wishes to ask a question may press star and one at this time. The first question is from the line of Avnish Khara from VT Capital. Please go ahead. Mr. Avnish Khara, your line is in talk mode. Please go ahead with your question. Mr. Khara, your line is unmuted. Please go ahead with your question. The current participant has left the question queue.
We'll move on to the next question from the line of Mohit Kumar from DAM Capital Advisors. Please go ahead.
Yes. Good afternoon, sir, and congratulations on a very good quarter, especially the entire fiscal year. Sir, the first question is on the GMB plus Interfloat, which you're acquiring. What was the margins in FY 2022 for the entity, and how do you plan to improve it? Is there any plan to increase the capacity for Interfloat and GMB over medium term?
We have not shared the margin with anybody yet so far. I can just say it was very good. Once we take a call to share this information, we'll certainly share it. The issue with Interfloat is that during the current year, the prices of inputs like natural gas, electricity and soda ash, which has bedeviled everybody, have gone up there as well. Therefore, that has brought margins under some pressure. It is still profitable, but the margins have reduced somewhat. We are renegotiating prices with our customers, and after some time, once the horizon becomes clear, we will be very happy to share the outlook with you.
You must remember that the agreement was signed as recently as the twenty-fifth of April, which has really given us about ten days between then and now to have been able to understand the workings of the company in detail. I'm now asking Mr. Ashok Jain to add his observations here.
Yeah. Moreover, the closing of the transaction is yet to take place, which will be two months plus down the line. Once we have control of the company, then we will start sharing all the information, including consolidation and all. Let's wait for some more time before you have all the numbers with you. We will have complete transparency in terms of information sharing as per the listing requirement.
Understood, sir. Given the fact that your acquisitions will get commissioned in this fiscal year, right? I think in quarter three CY 2022, yeah, how do you see the demand panning out? Are we in talks for further some kind of quantity tie-ups given this large capacity is coming up?
Yeah. Demand in India is quite good actually. Last year, the country had added more than 12 GW, and only less than half of it was manufactured in India. With BCD and PLI scheme having come into play, the domestic manufacturing of modules is likely to run up quite significantly. The imports are going to drop. That would mean that the demand for glass is going to be substantially higher than before. We are well in time to commission our SG3 project by September. Our customers are of course in touch with us for long-term tie-ups as well. We believe that we will be able to conclude some of these contracts within this quarter. As of now, nothing has been done. In the sense concluded, but discussions are in progress with at least three, four large buyers.
We will have long-term ties with them. Also, we are quite sure of, like, the demand and sale of the extra production will not be a challenge.
How was the capacity utilization in Q4 FY 22, and how is it currently?
Q1 FY22 was fairly flat out at, as was mentioned, 443 tons per day or so. That is against the capacity of 450 tons per day. It was 100%. In current quarter also, besides certain downtime in the machines in April, we are running at almost full capacity.
Last question, Mohit. How are you managing our gas requirements? Is it completely spot in your, or is it some mix of APM or something?
Yeah. We have a couple of different type of arrangements. We hardly buy anything under spot. We are fairly comfortable in terms of the costing because we are not buying under spot. Of course some quantity is coming under APM as well, as has been the case. About 1/3 of the requirement is under APM.
Understood, sir. Thank you and all the best, sir. Thank you.
Thank you. The next question is from the line of Keval Nashre from DSP Investment Managers. Please go ahead.
Hello. Thanks for the opportunity, sir. I have two questions. First is related to your German acquisition. What is the annual solar PV addition in the European market that we expect? And second is, what percentage of total solar glass requirement in Europe is currently imported?
Annual addition in Europe are almost close to 20 GW , in that sense, in the entire Europe put together. But the manufacturing, local manufacturing is quite limited as of now. It is less than 3 GW . Similarly, like Indian program of Atmanirbhar Bharat, they are also having solar accelerator program, where local module manufacturing and local solar cell manufacturing is being promoted. We believe that the local manufacturing of solar modules will go up to 8-10 GW in next two, three years' time. This will propel the demand for solar glass into Europe, which is one of the reasons why we have taken this step of getting into this acquisition and also looking at expanding it immediately.
Got it, sir. Second is in India, as you see many module manufacturers are aggressively expanding their capacity post the BCD. Also by CY 2025, we will be able to cater to 15 GW of solar modules in India. What is the possibility of us signing annual contracts with all these large module manufacturers?
I just mentioned that we are in discussion with many, many large module manufacturers.
Okay.
The agreements have not been concluded as yet, but they are in advanced stage of finalization. They are also eager, the customers are also eager to have long-term supply arrangement in order to ensure the supply chain. We are also keenly interested to have those contracts so that our capacities are fairly stable and we have benefits of larger production runs with higher efficiencies.
Got it, sir. Thank you so much.
Thank you. The next question is from the line of Anuj Upadhyay from HDFC Securities. Please go ahead.
Yeah, thanks for the opportunity, sir. You mentioned about the average accepted price of tempered solar just for the entire year as INR 133. Could you just quantify it for the quarter and for the corresponding quarter of previous years as well?
We already mentioned that the quarter for FY 2022 realization has been lower by 14% of the previous year corresponding quarter. In terms of the number for this quarter, it was about the average of the full year only. It was closer to that number only.
133 around.
INR 1 here and there. INR 134 actually.
134. Okay. This is slightly lesser than what we saw during the Q3. Q3 saw the number rising slightly above 140. Factoring the thing that the input cost has already gone up. Any reasons for why the realization was down by say 3% or 4% on a quarter-over-quarter basis?
Yeah. It's
The input cost has been much higher.
As we have been explaining in all our conference call or investor calls, the prices are largely depending on the landed cost of imports. As the landed cost of imports have moved southwards or northwards, our prices have been adjusted accordingly in the quarter-to-quarter basis. This is why you see that there has been a decline in the last quarter. As we speak, the prices have again started to go up from the level prevailing in the last quarter, completed quarter. Prices are actually up by about 14%-15% already in the current period. These are fluctuations which we have to live with in terms of the international supply chain. India still depends on imported glass to the extent of more than 65%.
It is quite sizable amount to ignore, and the prices are accordingly getting moved because of the imported prices.
Okay, sir. Next on this acquisition of Interfloat, sir. You mentioned that Europe is also following in the similar pattern which has been seen in India, where the domestic manufacturing is getting more important. Could you also highlight or mention about what kind of import restrictions or the duty they are imposing on the Chinese solar glass manufacturers over there?
Europe has anti-dumping duty against China of the order of 55%-60%, depending on the source. Against other countries, they do not have any anti-dumping duty. India is preferred source of import in Europe because of China plus one strategy. We find a better pricing also in terms of our realization because the local prices are fairly high in terms of the prices over there. We are very keen to expand our products or our supply to European markets.
Okay, sir. Could you mention about the proportion of export in the overall sale? Post this acquisition, what kind of change we are expecting in import-export going ahead, sir? Import expansion, domestic and export sales say over next two to three years down the line.
Our direct exports are about 20% of our production, which we believe we will continue to have on a longer term basis. SEZ exports are close to about 7%, so that's within India, but it's an export from that perspective. We believe that this percentage will continue after the expansion.
Fair enough, sir. That's it from my end. Thank you.
Thank you. The next question is from the line of Monika Gandhi from Aditya Birla Sun Life Mutual Fund. Please go ahead.
Hello.
Yes, please go.
I'm her colleague, Sachin from Birla Mutual Fund only.
Please go ahead.
I just want to ask the question. See, last quarter margin got impacted because of, you know, increase in the input costs, mainly the fuel costs, soda ash and gas prices. Considering the fact that
Borosil Renewables is, you know, only manufacturing in India. Now is not the price able to pass it on to end user?
Yeah. This question is to be answered in the same way like the import prices are the governing factors for what would be the prices which we can get from our customers in India. All said and done, we try to pass on the cost increases, but again, we are restricted by the landed cost because the customers have choice to import. We have to assume that there is a certain time lag between the cost increases and the time to adjust any selling prices, because we have to convince the customers to absorb certain portion of the cost increases. We are in continuous dialogue with our customers to do so. As I said, the prices from China or Malaysia have already started to go up.
There has been a rise in the prices in the current quarter. We'll see an impact over a period of time, over a period of quarters, that these costs are to a great extent passed on.
Okay. How frequently you negotiate the contract with your customers?
Our supplies are normally on month-to-month basis, so every month there is a price negotiation and quantity confirmation from the customers. Sometimes it is done on quarterly basis also.
Okay.
Yeah. That is from our side.
Yeah. These cost increases are applicable to all the solar glass manufacturers around the world. We are not the only ones to get affected because of the cost increases. Everybody is looking at their own balance sheet and P&L and trying to readjust the prices to the reality. This of course has some time lag.
Okay.
Thank you. The next question is from the line of Pradyumna Choudhary from JM Financial. Please go ahead.
Yeah. Hi, sir. Thank you for the opportunity. I just wanted to understand, like, you've explained the rationale why we have gone ahead and purchased Interfloat. From the seller's perspective, I just wanted to understand their rationale, especially considering that even the valuation seems to be on a reasonable side, I would say.
Sellers are actually not a glass manufacturer background, and they are basically financial investors. Just to assume that they are not an actual glass manufacturer. Actually they were looking at the CapEx plan, which was in front of them, and they also looked at what Borosil Renewables had been doing in the same space. They were quite comfortable in talking to us on the particular transition. They also saw that we have been doing quite well in terms of our production, our profitability, and they cross-checked our background and everything, and the transition got finally negotiated and concluded.
In terms of their thought process, they would have also thought that by joining hands with us as a major partner, we will be able to smoothen out the CapEx program as well as run the operations more for long-term basis, because we are a glass manufacturer so more than six decades standing. They saw a good partnership in us. Initially, they had agreed for 85% stake sale, but finally they agreed for 100%. At the same time, they visited our plant and they were comfortable with our project, our operations and our profitability and every other aspects of business. Also saw that the Indian market is very fast growing in this space.
They went ahead with a swap of certain portion of the acquisition cost, so that they are also equally interested in that sense through holding company like Borosil Renewables. Also through that they are remaining interested in the European operations as a subsidiary. The transition got concluded at very comfortable level. This EUR 30 million cash payment and EUR 22.5 million shares is something which is comfortable from our side as well in terms of obligation and ability to do the transition.
Okay. Thank you, sir. That's all from my end.
Thank you. The next question is from the line of Dhiren from PhillipCapital. Please go ahead.
Yeah, good afternoon, sir. Thanks for the opportunity. How are we looking to fund the expansion that we are planning for Europe as well as for our SG4 and SG5?
For the European expansion, we are still calculating the CapEx requirement. The existing team has worked out some numbers which we are evaluating. Also, we are looking at the project design itself, and there could be certain changes there. In terms of the financing of the overall project cost there, we will be taking certain amount of loan in the target company. Also there is some government subsidy from the state government over there, which will be utilized for the project. Some amount of funds will be provided from internal accruals of the company, which have been accumulated in the company, and more or less they've been utilized to some extent for the project already.
This will be a financing pattern for the European operations CapEx. In India, for SG4, we are still not firmed up our financing plan, but it will surely be a mix of debt and equity and internal accrual. Maybe in next couple of quarters, we will be coming back to you with that information after approval from the board of directors.
Okay. Sir, is the cost of operation in Europe the same as we operate in India? Or is it higher?
In terms of the input costs, basically the soda ash and other commodities are internationally priced. Currently the gas price is out of whack from the perspective of European operations because of the Russia-Ukraine crisis. In terms of the manpower cost, it is higher in Europe. At the same time, the local production is very valuable over there for the domestic buyers. Correspondingly, they are able to recover higher selling price from the customers. On a net basis, if you see, though the costs are higher, the prices are also higher. There is a decent amount of EBITDA in the company, which is quite comfortable from the European operations point of view.
What is the market share of Interfloat in European region?
It's close to two-thirds as of now, and one-third is being made by imports from India, Malaysia, Vietnam, and other places.
Okay. Sir, lastly, this 13%-14% rise that we are seeing currently, so is it fully covering the cost inflation which is there?
No, not fully.
Okay. You feel that, you know, margin pressure would continue even in Q1?
I wouldn't comment on that because the prices keep changing every 10 days. Prices could change rapidly also. I would not put a number to it as of now.
Okay. Thank you so much.
Thank you. The next question is from the line of Kashyap Javeri from Emkay Investment Managers. Please go ahead.
Yes, sir. Thank you very much for the opportunity. Couple of questions from my side. One, you know, this total 1,000 TPD capacity-
Sorry to interrupt you, sir. The audio is not clear from your line. Please check.
Is this better?
Yeah, please go ahead. Thank you.
This 1,000 TPD capacity would be equivalent to how many, you know, megawatts, if we were to convert, say, that?
It will be close to 6 to 6.25 GW. 6 GW plus.
6+ GW.
Yes.
The second question is on this, you know, again, Interfloat. In the last question, you mentioned that it's about the market share of Interfloat is about two-thirds. If I got the number correctly, you said total, you know, the size of European market is about 20 GW, of which domestic production is about 3 GW. Of that 3 GW, Interfloat is about two-thirds.
Local manufacturing is about 2.5-3 GW. Whatever the Interfloat production is taking place, the entire production is getting sold in Europe. That would be equal to about 65%-66% of the demand.
Sure. You know, I can see about INR 300 crores of CWIP already there on the book as of March 2022. This additional 550 TPD which we are putting up, what would be the cost per TPD that we are incurring?
The last approved price for the project is INR 650 crore, which has been approved by the board. From the angle of 550 tons, it would be like in that ratio, INR 650 crore of 550 tons per day.
Okay. Last question from my side. In this 450 TPD, you know, I understand about two and a half years ago when you know, I had met Mr. Shiveer Kheruka, there was you know, some talks about reducing the thickness of the glass and consequent improvement in the overall freight cost and you know, its impact on the margin. In this 450 TPD today, what's the breakup of you know, if you look at the thickness, you know, what would be the breakup?
We have been successful. The question was about thinner glass. I'm very happy to say as much as 27.3% of the total production of the company is now being sold in thicknesses which are less than 3.2. It is taking its time in getting accepted, but it is getting accepted and we are drawing more. These sales are more remunerative for us.
When you say less than 3.2, this will be largely 2 mm?
Sorry. No. This includes 2 mm, 2.5 and 2.8 mm. All three thicknesses.
Okay. The difference in the freight cost as a percentage of the selling price would be what number between the two?
Freight difference is not significant. Actually, the prices are in lower thicknesses higher than the proportionate reduction in the thickness. Like, say, 1 square meter of 3.2 may be selling at, say, INR 500, and 2.1 may be selling at 4.1. It is not proportionately down in that sense. You get a higher average per square meter, per mm of glass when you sell a lower thickness glass.
These glasses are becoming popular because of the bifacial modules coming into play in a very big way in China and other parts of the world, including now in India. This demand would rise significantly in the years to come, which will be good for the company because the company is equipped to make 2 mm glass and supply it to the customers here. We are already exporting 2 mm glass.
Okay. Last question from my side. In your, you know, the total order book as of today, or let's say total sales also today, how much would be PSUs?
I'm sorry, how much would be what?
PSUs.
PSUs are very limited because BHEL has just resumed their production. Earlier, they were running at about 200 megawatts, but they had stopped production in between. They are the largest customer in PSU. But otherwise, there are not many PSUs. Rajasthan Electronics & Instruments and Central Electronics Limited are also, to some extent, the buyers.
Okay, sir. That is from my side, sir. Thank you so much.
Okay.
Thank you. The next question is from the line of Akshay Kothari from Envision Capital Services. Please go ahead.
Yeah. Thanks for taking my question. Sir, I wanted to understand regarding this Interfloat acquisition. Like in India, the pricing power we have is based on the landed cost of imports. In Europe, how is the pricing power like? You did mention that their local manufacturing is favored by the local population. Can you throw some light on that?
In Europe, the domesticity of the source of supply is very important. Therefore, in the case of many consumers who are large volume consumers, they do not compare the prices with imported prices, which is done mainly by the smaller producers. Yeah, the system of pricing, system of buying there is a little bit different.
Particularly in Germany and other parts, there are annual contracts done by the Interfloat Group with the customers because the customers are wanting a dependable supply source and also a consistent volume coming to their factories. Because solar glass after all is about 11%-12% of the cost of module, and they would like a dependable source which is available in the form of Interfloat there. The pricing is not exactly in tune with the imported landed cost, but it is on certain decent margin basis on which Interfloat has been able to sell their volumes to the customers. Customers are willing to pay that slightly extra price for this kind of assurance, assured supply chain.
Could you just give a sense of cost of generation of power from solar energy vis-a-vis any other source of energy in Europe, or like, what is the differential going on right now?
Solar energy is much cheaper than any other source of energy.
Okay.
We could not give you more detail than that.
Okay.
Because we're not that familiar with that market yet.
Okay. Okay.
By far the cheapest source of supply.
Okay. Were there any other buyers for Interfloat?
No, it was a bilateral transaction. We had a discussion with them, and then we both got interested in the transaction, so there was no process being run. It was a bilateral deal.
Okay. Thanks a lot and all the best. Thank you.
Thank you.
Thank you. The next question is from the line of Levin Shah from ValueQuest Investment Advisors. Please go ahead.
You are on the line.
The current participant has placed the call on hold. We will move on to the next question from the line of Nikhil Chaudhary from KRIIS Portfolio. Please go ahead.
Yeah. Hi, sir. Good afternoon. Thank you for the opportunity. Am I audible?
Yes, please.
Hello? Yeah.
Yeah, you are audible. Please go ahead.
Sir, most of the questions have been answered. I just wanted to understand the normalized margins, like considering the Interfloat maybe going through some supply challenges and that is why the margins may be depressed. But if you could give some margin color, whether it is higher than Borosil or similar to Borosil, the normalized margins. Second question was on the gas supplies front. Like, are you seeing normalization of gas supplies or, do we see the challenges to.
Mr. Choudhary, sorry to interrupt you. The audio is breaking from your line now. Please check.
Hello. Is it better?
Yes, please go ahead.
Hello. Yeah. I just wanted to understand. I'll repeat my questions. Wanted to probably get some color on the normalized EBITDA margins of Interfloat, if you could share. Like, is it better than Borosil or similar to Borosil? I can understand the current challenges that are depressing the margins. You could probably share some color on that. Second thing, sir, we made an acquisition at the time when the gas supplies are really challenging for the glass manufacturers in Europe. Is it getting better or do we see some challenges going forward? Because suppose if they don't normalize and the capacity remains unutilized, probably even if you have paid some reasonable price, it doesn't probably make sense for us to pay even INR 400 crore then. Just wanted some color on that.
The production is not unutilized. All the glass being made there is being sold. There is no shortage of demand for the glass. That is to answer your last question first. Giving you any sense of the normalized margin is premature at this time because we really need to be in control of the company before we can share this information. Regarding your question, which was regarding the prices of gas in Europe, the answer is that the government is very acutely seized of this problem. They recognize that the price of gas is very high and something has to be done to protect the industries which are dependent upon the supply of gas and which are of national strategic priority.
They have mentioned Interfloat by name, among a list of companies which are going to qualify for some support from the government. However, the exact nature and extent of support has not yet been discussed. What is in the air is that at least one proposal which we have heard is that any price above a certain ceiling, which is fixed by the government, is going to be borne by the government.