Garware Hi Tech films –
Q1 FY 25 results and concall highlights –
Revenues – 474 vs 380 cr, up 25 pc
EBITDA – 130 vs 89 cr, up 78 pc ( margins @ 27 vs 20 pc – massive margin improvement )
PAT – 88 vs 44 cr, up 100 pc
Cash on books @ 493 cr
Revenue growth driven by continued growth momentum in SCF and PPF business
Architectural SCF witnessed high growth with introduction of new products like SpectraPro and DecoVista
IPD division witnessed recovery in both speciality and commodity segments. Focussed approach on high end products like lidding films, PCR/floatable shrink films is leading to margin improvement in this segment
Segment wise sales mix –
Consumer Products Division ( SCF + PPF ) – 67 pc of revenues
Industrial Products Division ( VAP + Commodity products ) – 33 pc of sales. In the IPD, 66 pc of sales come from Value Added Products like – shrink films and other special IPDs. Rest 33 pc revenues come from commodity products
Overall, at a company level, VAP:Commodity products ratio @ 88:12 vs 83:17 in Q1 LY ( massive improvement towards VAP )
Opened new Garware Application studios in tier 2/3 cities like – Nahsik, Faridabad, Agra, Jammu, Srinagar, Azamgarh, Noida, Dehradun, Bhopal and Ahmednagar
Aggressively ramping up engagement with – Influencer community, car experts, Architects
Company is the only manufacturer of professional grade PPF in India
Company has one of the world’s largest single location SCF capacity
Domestic : Export sales ratio @ 24:76
Company’s new capacity of 300 lakh Sq Ft / annum is expected to begin production in Q2 of FY 26. Company is expected to spend Rs 125 cr for the said expansion. Company is currently running on full capacity and likely to do so till the new capacity comes up. This facility should have a revenue potential of between 300-350 cr / yr
Even within the SCF, company is increasing the sales of higher end – higher UV and heat rejection films. Margins in these films are 20-30 pc higher than the absolute basic SCFs ( with much lower UV and heat rejection properties )
Far higher margins in Q1 are also because Q1 is exceptionally good for SCFs
Company has the highest degree of vertical integration when it comes to making SCFs,PPFs – this gives them a big edge over the Chinese / Korean competition
Interms of revenue contribution in the CPD, max revenues come from SCF – Auto, then PPF, then SCF – architectural. SCF-architectural is currently growing at the fastest rate. Also, the runway for growth is the highest in the architectural segment because of under-penetration
Despite Q1 being a seasonally strong Qtr, company is confident of maintaining EBITDA margins of > 20 pc for full FY 25
Company is very confident of clocking 2000 cr and 2500 cr of sales for FY 25 and FY 26 !!!
Rough break up of company’s CPD sales between Branded : White Label ( sale to OEM etc ) stands at 50:50
Disc: holding, inclined to add more, biased, not SEBI registered, not a buy/sell recommendation
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