Garware Hi Tech Films –
Q4 and FY 24 highlights –
Q4 outcomes –
Revenues – 446 vs 349 cr, up 28 pc
EBITDA – 89 vs 70 cr, up 27 pc ( margins @ 20.1 vs 20.2 pc )
PAT – 57 vs 43 cr, up 34 pc
FY 24 outcomes –
Revenues – 1677 vs 1438 cr, up 16 pc
EBITDA – 321 vs 269 cr, up 19 pc ( margins @ 19.1 vs 18.7 pc )
PAT – 203 vs 166 cr, up 22 pc
EBITDA growth in FY 24 and Q4 driven primarily by increased sales of Sun Protection Films ( SPFs ) and Paint Protection Films ( PPFs) driven by extensive marketing and sales initiatives. SPFs, PPFs are higher margin segments for the company. However, the industrial products division ( IPD ) was muted in FY 24
**Company’s business segments – **
Consumer products division ( CPD ) –
Auto – Sun Control Films
Architectural – Sun Control Films
Paint Protection Films
Safety films
All these are value added products
CPD – constitutes 65 pc of company’s business
Industrial Products division ( IPD ) –
Value added products –
Shrink Films ( contributes 10 pc of company sales )
Electrical / Electronic Insulators
Release liners
Insulators + release lines contribute to 14 pc of company’s sales
Commodity products ( within IPD segment ) –
Thermal lamination
Plain Films
Packaging Films
These commodity products contributed to 11 pc of company’s sales
Launched titanium PPF with lifetime warranty
Launched new architectural films – DecoVista and Spectra
Expanding their PPF network / Garware Application Studios ( GAS ) to tier 2 cities ( total count now @ 120 + ). Now present in Lucknow, Belgaum, Goa etc. Aim to take the GAS + PPF distributor numbers to 200 in next 2 yrs
Company’s PPF is currently available in 650 dealerships. Aim to take this beyond 900 in next 2 yrs
Completed some new projects in FY 24 – Central Bank of Brazil, Biggest mall in Mohali, renowned developed in Pune for their residential projects ( for their SPFs )
89 pc of FY24’s revenue came from value added products ie – SPF + PPF + Shrink Films vs 80 pc in FY 23 ( rest comes from commodity films )
Company’s SCF manufacturing is completely backward integrated ( only company in the world to achieve this ). Company’s brands for these films are among top 3 brands in US+EU.
Also, Company is the sole producer of premium PPFs in India
Higher sales of premium/luxury cars in India is a huge tailwind for company’s PPF business. Current adoption rates in India are around 1 pc vs >10 pc for US, China
Company putting up a new PPF line with capacity of 3 lakh sq ft / yr. This is likely to go commercial by Q2 FY 26. Seeing strong demand in PPF segment. Total capex requirements for this should be around 150-160 cr
SPF sales in Q4 @ 185 cr vs last few Qtr’s avg of 150 cr or so. SPF sales momentum should continue as the overstocking related issues are now behind in US + EU mkts
PPF sales in Q4 @ 110 cr. For FY 24, PPF sales @ 450. Company is in advanced discussions with various customers in developed Mkts to sell company’s PPFs. Should see good breakthroughs going fwd
In the domestic mkt, company sees most of the growth to be driven by SPFs in Architectural segment. PPF segment should also continue to do well
Aim to hit 2600 cr of revenues in FY 26. Company believes, its on track to achieve the same
Company is seeing very good response from various automotive dealers from tier 2 cities
( like Lucknow, Kanpur, Raipur etc ) to take up franchise of GAS ( Garware application studios ). On an avg, GAS studios are doing PPF work on 15-20 cars per month per studio
@ penetration levels of 1.5 pc, company already has a ready addressable mkt of 60,000 new cars per yr for its PPF products ( in India ). With increased car sales and increasing penetration of people opting for PPF, this addressable mkt should keep increasing every year for a long time to come. For high end cars, PPF work costs upto 1-2 lakh per car
Company also does PPF work directly with Automotive OEMs
Domestic : Export sales breakup @ 20 : 80
40 – 50 pc of PPF + SPF exports by the company are under Garware’s own brands, rest are contract manufactured for other players
Garware has trained over 700 applicators across India for application of their PPF. These films are quite expensive and their application is an extremely specialised kind of Job
Company’s liquidity position is extremely comfortable. May even go in for inorganic opportunities to utilise the cash on books
Will continue to spend aggressively towards marketing and promotional events / ads – to grow the domestic business
Disc: holding, biased, not SEBI registered
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