Garware High tech films

Garware High Tech Films (GHFL) is a leading manufacturer of high-performance polyester films, solar
control films, and paint protection films. It has a rich history dating back to 1957 when it was
founded as Garware Polyester. Over the years, the company has grown significantly, expanding its
product portfolio and global reach.

GHFL's business model is focused on manufacturing and supplying high-quality, innovative films for
various applications across diverse industries. The company has a strong emphasis on research and
development, continuously investing in new technologies and product innovations to meet the
evolving needs of its customers.

GHFL caters to a wide range of industries, including:

 Automotive: Solar control films for automotive glass, paint protection films

Garware High Tech Films automotive applications

 Architecture and Construction: Solar control films for windows and facades, decorative films

Garware High Tech Films architecture and construction applications

 Industrial: Films for lamination, packaging, electrical insulation, and other industrial
applications
Garware High Tech Films industrial applications

 Renewable Energy: Films for solar panels and other renewable energy applications

Garware High Tech Films renewable energy applications

GHFL's commitment to quality, innovation, and customer satisfaction has made it a trusted partner
for businesses worldwide. The company's strong brand image and global presence have contributed
to its success in the competitive market of high-performance films.

Here's an overview of Garware Hi-Tech Films Limited's (GHFL) operations, financial performance,
industry trends, risks, and strategic initiatives, based on the provided sources:

Overview of the Company's Operations:

Business Activities: GHFL is primarily engaged in the manufacturing of polyester films, which are
used in a variety of end applications1. The company is a leading manufacturer of specialty
performance polyester films in India2. It is also the sole manufacturer of solar control window films
in India2.

Product Divisions: The company has two primary product divisions: the Industrial Product Division
(IPD) and the Consumer Product Division (CPD).

The IPD serves converters who use films for applications like flexible packaging, shrink labels, and
insulation in electrical devices34.

The CPD includes products such as window lamination, solar films, and architectural films34.

Global Presence: GHFL has a wide customer base across 90+ countries567. It has established a
strong presence in international markets, including the USA, Europe, Russia, the Far East, China, the
Middle East, Africa, South America, Australia, and New Zealand6.

Manufacturing: The company has three manufacturing plants in India8.

R&D: GHFL has a dedicated R&D center accredited by the Department of Scientific and Industrial
Research, Government of India9. The company focuses on developing new products and applications
for BOPET films, solar control window films, lidding films, and paint protection films910.

Integrated Operations: GHFL is perhaps the only company in the world with backward integration for
manufacturing its raw materials and components for the manufacture of solar control window
films2.

Financial Performance Review:

Revenue Growth:

The company's standalone revenue from operations increased by 21% from ₹1,311.24 crore in FY23
to ₹1,581.65 crore in FY2411.

The consolidated revenue from operations also increased by 17% from ₹1,438.01 crore in FY23 to
₹1,677.02 crore in FY2411.

Profitability:

Standalone Profit After Tax (PAT) increased by 23%, from ₹147.60 crore in FY23 to ₹180.93 crore in
FY2411.

Consolidated PAT increased by 22% from ₹166.14 crore to ₹203.29 crore11.

The company's standalone profit before tax increased by 23% due to higher sales volume and a
reduction in finance costs12.

The company has shown consistent profitability, with a net profit of ₹18,093 lakh in 2023-24,
₹14,759 lakh in 2022-23 and ₹16,021 lakh in 2021-2213.

Earnings Per Share (EPS): * Standalone EPS increased by 23% from ₹63.53 in FY23 to ₹77.88 in
FY2414. * Consolidated EPS increased by 22% from ₹71.51 to ₹87.5014.

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Market Capitalization: The market capitalization of the company increased by 233.81%1516.

Dividend: The company declared a final dividend of ₹10 per equity share for the financial year ended
March 31, 202417.

Exports: Exports constitute 76% of the total turnover of the company3.

Key Financial Ratios:

The interest coverage ratio increased by 80.14%18.

The debt-equity ratio decreased by 80%, indicating lower leverage18.

The current ratio increased by 26.42%18.

The net profit margin increased by 1.63%18.

Shift to Value-Added Products: The share of value-added products has increased from 48% of overall
revenues in FY17 to 89% as of FY24. These value-added products include SCF, shrink films, PPF, and
low-oligomer products [previous conversation].

Segment Performance: The company has seen strong growth in both the CPD and IPD segments
[previous conversation].

In FY24, the CPD segment contributed 65% of the revenue whereas IPD contributed 35% of the
total revenue [previous conversation]

In the second quarter of FY25, CPD accounted for 71% of the total sales, while IPD accounted for
29%.

In the second quarter of FY25, the growth of PPF and SCF was 67% and 64% year-on-year,
respectively, and the IPD business grew by 30% year-on-year [previous conversation].

Industry and Economic Trends:

Growth in PET Film: There is consistent demand for PET film in the packaging segment, driven by the
need for hygienic packaging and increased consumption of packaged food19.

Specialty Films Focus: Companies in the specialty film sector are focusing on sustainability and value-
added products19.

Competitive Landscape: The packaging industry remains highly competitive, with pressure on
margins due to excess supply19.

Real Estate Demand: There is growing demand for window films in the real estate sector, including
offices, commercial buildings, and malls, for their energy efficiency and UV protection20.

Automobile Sector Growth: The paint protection film segment is a thriving industry driven by
increasing consumer awareness, technological advancements, and expanding applications21.

Shift to Consumer-Oriented Business: The company has moved away from a high-volume, low-
margin business of commoditized polyester film to a consumer-oriented company with a major share
in value-added products [previous conversation].

Diversified Product Portfolio: The company has diversified its product portfolio with the introduction
of new products like Rooftop series, Spectrally Selective Films, and Titanium, Matt, Black, and White
Paint Protection Films9.

Risks and Uncertainties:

Operational Risks: The company recognizes the potential impact of operational risks, particularly
equipment obsolescence, on its production22.

Competition Risk: The addition of capacities by competitors has intensified competition22.

Fluctuation in Raw Material Prices: The company’s major raw materials, PTA and MEG, are derived
from crude oil, making it susceptible to fluctuations in crude oil prices23.

Market Risk: The company faces market risk due to changing consumer demand, and it is exposed to
currency fluctuations due to significant export revenues2324.
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Logistics Risk: Logistics risks encompass transportation challenges and the availability of shipping
containers24.

Regulatory Compliance: The company operates in a strictly regulated environment and faces
reputational risk in case of non-compliance with laws and regulations25.

Cybersecurity Risks: The company has initiated the process of enhancing backup systems and
strengthening strategies on cybersecurity26.

Geopolitical Risks: Geo-political situations like the Israel-Hamas war have forced global businesses to
revisit their operations, delivery, supply chains, and contractual aspects27.

Outlook and Strategic Initiatives:

Focus on Speciality Films: The company is strategically focusing on increasing the share of specialty
value-added products and reducing the volume of commodity films28.

Expansion in PPF Market: The company sees significant growth opportunities for PPF in domestic
and emerging markets due to low market penetration21.

Product Diversification: The company is diversifying its product portfolio with new products such as
rooftop series, spectrally selective films, and new colors of paint protection films9.

Sustainability Focus: The company is focusing on sustainability, with products like recyclable shrink
film1019.

Digitalization Initiatives: The company is implementing digitization initiatives in production and

Cost Reduction Measures: The company is actively pursuing cost reduction measures to address the
challenges posed by excess capacities and price competition28.

Market Expansion: The company is exploring opportunities in new markets and aiming to grow its
customer base in regions such as the USA, Europe, China, South America, Africa, the Middle East,
Australia, and New Zealand30.
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Customer-Centric Approach: The company is taking a customer-centric approach to create value for
customers by ensuring product quality and innovative service offerings31.

Emphasis on R&D: The company is continuously investing in R&D and developing new products to
meet the growing demands of the industry9.

Risk Management: The company has a Risk Management Committee to frame, implement, and
monitor the risk management plan

tell me about Overview of the Company's Operations:Financial Performance ReviewIndustry and

 Revenue Growth:

o What were the key drivers of revenue growth (or decline) this quarter?

o How does this compare to guidance and historical trends?

 Profitability:

o What were the key factors impacting gross margins, operating margins, and net
income?

o Are there any one-time items impacting profitability?

 Guidance:

o What is the company's guidance for the next quarter and full year?

o How does this guidance compare to analyst expectations?

2. Business Operations:

 Market Share:

o Is the company gaining or losing market share?

o What are the key competitive pressures?

 Customer Trends:

o Are there any significant changes in customer behavior or demand?

 New Products/Services:

o Are there any new products or services being launched?

o What is the expected impact on revenue and profitability?

 Operational Efficiency:

o Are there any initiatives underway to improve operational efficiency and reduce
costs?
3. Strategic Initiatives:

 Growth Strategy:

o What are the company's key growth strategies?

o How are these strategies progressing?

 M&A Activity:

o Are there any plans for mergers, acquisitions, or divestitures?

 Capital Allocation:

o How is the company allocating capital (e.g., share buybacks, dividends, R&D)?

4. Risks and Challenges:

 Economic Outlook:

o How is the company managing the impact of potential economic headwinds (e.g.,
inflation, recession)?

 Supply Chain Issues:

o Are there any ongoing supply chain disruptions?

o How are these issues being addressed?

 Competition:

o What are the biggest competitive threats facing the company?

5. Management's Outlook:

 Management's Tone:

o What is the overall tone and sentiment of management during the call?

o Are they confident in the future prospects of the company?

 Key Takeaways:

o What are the most important takeaways from the call for investors?

Important Considerations:

 Listen Carefully: Pay close attention to management's answers and the tone of their
responses.

 Take Notes: Jot down key information, including financial figures, guidance, and strategic
updates.

 Review Transcripts: After the call, review the official transcript for a more detailed analysis.

 Consider Analyst Questions: Pay attention to the questions asked by analysts and
management's responses.