Hello Sir,

Hope you are doing well.

I am not sure if you are aware of Paint Protection Films (PPF), but these are increasingly gaining wider acceptance in India and developed countries.

Garware Hi Tech Films claims to be the 1st producer of professional grade Premium PPF in India.

The company also deals in other value-added films like Sun Control Films (SCF). While I was going through the details of the company, what I found interesting was that management is aiming for Rs 2,500 crore sales in FY 26 against Rs 1,677 crore recorded in FY 24.

Below, we have shared our notes from the Q4 FY 24 con-call of the company to understand the outlook for the business.

 

1 New Portfolio Stock Recommendation – Released a new stock recommendation for Alpha and Alpha + Members

  • Key beneficiary of strong growth in Real Estate segment
  • 100% + increase in sales in last 3 years and management targeting 20-30% sales CAGR for the next few years
  • Improvement in product mix resulting in higher margins and ticket size
  • Improving balance sheet with reduction in net debt and working capital days
  • Attractive valuations and value unlocking through demerger

You can get the detailed report on the above stock and other recommendations by signing up HERE

 

Garware Hi Tech Films – Notes from Q4 FY 24 concall

– Introduction

  • The key driver of this success (FY 24 performance) was our PPF and SCF businesses, which experienced remarkable growth, which is slightly offset by the IPD segment due to industry-wide excess capacity
  • Approximately 78% of our revenue in FY ’24 came from export and around 89% from value-added films

– Paint Protection Films

  • There is lot of enthusiasm for further penetration of PPM films which is like 10% to 12% in advanced countries
  • If we talk of India, when we started, the market penetration was 0.5% only. As we speak, it has crossed 1.5%
  • PPF continues to deliver robust performance, operating at optimal capacity. The PPF business achieved 3x revenue growth in Q4 FY ’24 compared to Q4 FY ’23
  • To meet future demand, the board has approved Rs 125 crore in capital expenditure to establish a new PPF line with a capacity of 300 lakh square feet per annum, which is expected to commence commercial production by Q2 FY ’26
  • So, we expect the same revenues of Rs 350 crores with capacity utilization in 2-3 years
  • We have introduced complete range of products like PPF Plus, Premium, Titanium, Matte, Black and White. This is to cater all segments of customers

– Solar Control Films

  • Our SCF business surged by 67% in Q4 FY ’24 compared to last year, fueled by a combination of factors: favorable global economic conditions, expansion into new markets and the introduction of innovative products like Spectra Pro, DecoVista and Rooftop series
  • We anticipate robust demand growth for both automotive and architectural film segment on a global scale
  • We have created a new business segment with the new team to take architectural business to the highest possible levels
  • Now the excess inventory, the phenomena which was there is not there. So, we are seeing this growth from all around USA, Europe, Russia, China, Far East, Middle East, etc.

– Industrial Products Business

  • Shrink film and other specialty IPD products exhibited steady growth, partially offsetting the decrease in commodity and packaging business
  • Overall, on IPD segment also, we are expecting a bounce back. This year we are seeing a good momentum as we go on into that business

– Garware Application Studio (GAS)

  • They are the franchisee models where we just support them to grow, to stand on their own feet
  • We have done a product launch, which is called Titanium, which is a top range of the product. So, that Titanium product is only available to Garware Application Studio

– Balance Sheet

  • Our balance sheet has zero net debt and a healthy cash reserve of Rs 388 crore

– Guidance

  • My second question was on your guidance of Rs 2,500 crore that you had given in terms of revenues in FY ’26, I suppose. So, that guidance remains, or any change is there? – Yes, we are on track towards that
  • We are expecting like overall to go, to cross like Rs 2,000 crores for sure and the guidance about FY ’26 which we maintain around Rs 2,500 crores

 

(End)

 

Disclaimer: This is not a recommendation to buy/sell Garware Hi Tech Films. The securities quoted are for illustration only and are not recommendatory.

 

Best Regards,

Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.com/

 

SEBI Research Analyst Registration No. INH100001690
Research Analyst Details
Name: Ekansh Mittal     Email Id: [email protected]    Ph: +91 727 5050062

Details of Associate: Not Applicable

Analyst Certification: The Analyst certify (ies) that the views expressed herein accurately reflect his (their) personal view(s) about the subject security (ies) and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report.

Disclaimer: http://www.katalystwealth.com (here in referred to as Katalyst Wealth) is the domain owned by Ekansh Mittal. Mr. Ekansh Mittal is the sole proprietor of Mittal Consulting and offers independent equity research services to investors on subscription basis. SEBI (Research Analyst) Regulations 2014, Registration No. INH100001690

Address – 7, Panch Ratan, 7/128, Swaroop Nagar, Kanpur – 208002, Contact No. – +91-7275050062

Compliance Officer – Mr. Ekansh Mittal, +91-9818866676, ekansh@katalystwealth.com

Grievance Redressal – Mittal Consulting, grievances@katalystwealth.com, +91-9818866676, +91-7275050062

“Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors”.

“Investment in securities market are subject to market risks. Read all the related documents carefully before investing.”

The views expressed are based solely on information available publicly and believed to be true. Investors are advised to independently evaluate the market conditions/risks involved before making any investment decision

This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. Ekansh Mittal/Mittal Consulting/Katalyst Wealth is not soliciting any action based upon it. This report is not for public distribution and has been furnished to you solely for your information and should not be reproduced or redistributed to any other person in any form. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Ekansh Mittal or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Neither Ekansh Mittal, nor its employees, agents nor representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. Ekansh Mittal/Mittal Consulting or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement.

The recipients of this report should rely on their own investigations. Ekansh Mittal/Mittal Consulting and/or its affiliates and/or employees may have interests/ positions, financial or otherwise in the securities mentioned in this report. Mittal Consulting has incorporated adequate disclosures in this document. This should, however, not be treated as endorsement of the views expressed in the report.

We submit that no material disciplinary action has been taken on Ekansh Mittal by any regulatory authority impacting Equity Research Analysis.

Disclaimer: You can access it here – LINK

Whether the research analyst or research entity or his associate or his relative has any financial interest in the subject company/companies and the nature of such financial interest – No

Whether the research analyst or research entity or his associates or his relatives have actual/beneficial ownership of 1% or more securities of the subject company (at the end of the month immediately preceding the date of publication of the research report or date of the public appearance) – No

Whether the research analyst or research entity or his associate or his relative has any other material conflict of interest at the time of publication of the research report or at the time of public appearance – No

Whether it or its associates have received any compensation from the subject company in the past twelve months – No

Whether it or its associates have managed or co-managed public offering of securities for the subject company in the past 12 months – No

Whether it or its associates have received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past 12 months – No

Whether it or its associates have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months – No

Whether the subject company is or was a client during twelve months preceding the date of distribution of the research report and the types of services provided – No

Whether the research analyst has served as an officer, director or employee of the subject company – No

Whether the research analyst or research entity has been engaged in market making activity for the subject company – No