Stock To Watch: This Small Cap Multibagger Stock Doubles Every Four Years

This small cap stock Borosil Renewables from the glass industry has doubled every four years in price. From the price of Rs. 0.53 in July 2005, the stock has gained to Rs. 2.04 in July 2009, and now in another 13 odd years it is trading at a price of Rs. 635.6 as on July 25, 2022. This is hence a multibagger scrip with 1-year return at 122% and 3-year returns placed at 356%.

About Borosil Renewables

This company as per its website has a legacy in manufacturing specialty glass and in 2010 it pioneered into solar glass production. Importantly this is the only company with this facility which initially took off its operations through Gujarat Borosil Ltd. Later in the year 2020, the company Borosil Renewables came into existence after amalgamation of Gujarat Borosil with Borosil Glass Works.

Company's product

Solar glass is the primary product of the company that finds application in real estate for formulating energy-efficient buildings, automotive as well as in solar plants.

Company is amping up its production capacity

After winning an award in 2021 for successfully commercialising indigenous technology, the company is targeting to reach 2000 TPD (equivalent to 10 GW/annum) by 2024. Currently between 2022-24 it is looking its manufacturing to reach 1000 TPD.

 

Borosil Renewables Europe acquisition

The company apart from India operations is also dependent on revenues from foreign source over 20%. Likewise, in order to strengthen its international portfolio, in April this year, the firm has announced acquisition of 100% stake in Interfloat Group, Europe's largest manufacturer of solar glass. With its acquisition of the Interfloat Group, BRL's solar glass output will grow to 750 TPD from the current 450 TPD, an increase of 66 per cent, the company said in a regulatory filing.

How will the current macros play out for the company?

While the energy crisis facing the world is certainly a positive for the firm, the supply side issues as well as the moves of countries to promote their own goods shall weigh on the company. Further, as per experts, though the fundamentals of the company are appealing with good RoE, RoCE, sales and margin figure, what needs to be watched out is how the company is able to progress internationally.

Also, there is an interpretation that currently all the positives of the company are factored into the stock and hence the run-up, so any negative news on any of the front can lead to discounting in the stock. Furthermore, while the company currently enjoys monopoly it is soon to face competition from the likes of Adanis, so, better be on a watchful sight.