Garware Hi-Tech Films Ltd (GHFL) has incurred a capex of Rs. 270 crore over the last two years. With the help of this capital
expenditure, GHFL was able to vertically integrate its business, strengthen its dealer network, launch its new product (PPF), and
increase the capacity of its current goods (SCF). Thus, ramping up of capacity provides the company with strong medium-term
growth visibility.
• GHFL has continuously increased the share of value-added products within its sales mix. Value-added products, which accounted for
48% of total sales in FY2017, increased to 80% in FY2023. This led to an improvement in its margin to 18.7% in FY2023 from 9% in
FY2017. As the company is planning to ramp up the capacity of value-added products and add new products, margins will continue
to improve going forward.
• The company has fully vertically integrated chips-to-film manufacturing facilities. These capacities are fungible and capable of
delivering customised products across a range of over 3,000 SKUs. Backward integration also helps the company’s R&D department,
as it leads to greater customization, faster time-to-market, and improved quality.
• Key risks: Sharp surge in oil price could impact margin/earnings. Sluggish demand in the automotive and real estate Industry
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