Thank you. Very informative
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Q2 FY20 Highlights:
• Net Sales declined by 11.2% to Rs.232042 Cr in FY20 as compared to Rs.261.83 Cr in FY19
• Profit before tax reduced by 10.6% to Rs. 43.54 Cr in Q2 FY20 as compared to Rs. 48.69 Cr in
the same quarter last year
• Net profit after tax has grown by 40.5% to Rs. 46.26 Cr in the quarter as against Rs. 32.93 Cr in
the corresponding period of FY19
• EPS for Q2 FY20 is at Rs. 21.14; this is a growth of 40.5 % over Q2 FY19
H1FY20 Highlights:
• Net Sales decreased by 8.2% to Rs. 464.75 Cr in H1FY20 as compared to Rs. 506.09 Cr in
H1FY19
• Profit before tax decreased by 9.6% to Rs. 85.74 Cr in HIFY20 as compared to Rs. 94.84 Cr in
the same period last year
• Net profit (PAT) has increased by 18% to Rs. 75.86 Cr in the period as against Rs. 64.30 Cr in the
corresponding period ofFY19
• EPS for the period is at Rs. 34.67 in HIFY20; this is a rise of 18% over HIFY19
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Garware tech is a seasonal business with best qtrs being Q3 N Q4 tks to exports. I think Y on Y wud be a better comparison matrix.
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Also, floods in Maharashtra, Kerala might have impacted the sales.
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https://www.icra.in/Rationale/ShowRationaleReport/?Id=90777
Rationale
The reaffirmation of ratings reflects Garware Technical Fibres Limited’s (GTFL) conservative capital structure, strong
liquidity position, healthy profitability indicators supported by improved product mix, prudent working capital
management and strong cash flow generation from the business. GTFL remains well diversified in terms of geography,
business segments and product profile. Owing to consistent focus on value added products, the company was able to
gradually expand its OPBIDTA margin to 18.9% in FY2019 from 10.0% in FY2015. Moreover, due to strong accruals,
prudent working capital management as well as moderate capex plans, it continues to generate free cash flow from
business. ICRA expects GTFL’s capital structure as well as coverage indicators to remain strong with the company likely to
remain in net cash surplus position and the Total Debt/OPBIDTA expected to remain below 1.0x over the medium term.
The ratings continue to derive comfort from the well-entrenched position of GTFL in the domestic market with healthy
market position in fishnet, ropes and twines business. The rating strengths are partially offset by a price sensitive
domestic market witnessing muted growth over the last few years and competition from the unorganised segment.
ICRA expects the company to maintain its healthy operating performance, given its focus on value added products, rising
share of exports in the overall revenue and new product development, which command premium over its existing
product. Its liquidity position remains strong, with GTFL reporting cash and investments (including investments of ~Rs.
250 crore in fixed maturity plans) to the tune of Rs. 350 crore as on September 2019. ICRA expects its credit profile to
improve further over the medium to long term, supported strong accruals and healthy growth prospects in the overseas
market. ICRA expects the company to maintain its credit profile through its organic or inorganic investment plans.
However, the impact of any such investments, on the credit profile would be evaluated by ICRA on a case-by-case basis.
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a good writeup on Garware tech fibre
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In the last five years, Garware has obtained 43 patents in different productive fields.
Posted on December 5, 2019
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From the beginning, the owners and executives of the global salmon industry have focused their concerns on the nutrition of the specimens. “And it is understandable, there is most of the productive costs. However, we have recently seen a growing focus on crop networks and funding systems. They have realized that if these structures are in good condition, the health of the fish can improve considerably, there is less mortality due to attacks by predators or the maintenance performance is reduced. With the above, costs are reduced and benefits are maximized, ”says Vayu Garware, the president and CEO of Garware Tecnhical Fibres , the main provider of these inputs globally and is located in India.
[But how has a company that only entered the aquaculture business in 2004 managed to position itself in the first places in a short time? “For two reasons,” says the president of the company open on the Indian Stock Exchange. “The first is because we put customers in the focus of our developments. If they have a problem, we look for a solution that gives them value, ”explains the businessman from his offices in Pune, one of the two cities - the other is Wai - where they have factories to serve sports, fishing or mining industries of about 70 countries, just to name a few activities. “The other reason is that we are going to constantly visit our clients. We don’t listen to them only from our office, ”says the businessman who, before taking the reins of the company,
R&D
Like Vayu Garware, the company’s CEO, Shujaul Rehman, has repeatedly visited major salmon producing countries, including Chile. “For example, this vision allowed us to develop our V2 culture networks, which are becoming a global success due to their copper particles that are inside the fibers of the networks and that have demonstrated a high antifouling capacity, by about the other solutions that exist in the market and with positive impacts for the environment, ”says the executive.
Next to the offices of the president and CEO of Garware Technical Fibers , is the one of the Technical and New Business President, Sanjay Raut, “which gives an account of the importance that the company attaches to the development of specific solutions for our clients,” says the head of the investigations carried out by about 30 you collaborate directly and without counting on the alliances that have sealed around the world. “In the last five years we have taken out 43 patents and others are coming,” says Raut, before getting up from his desk and taking a sample of one of his main pride for the salmon farming sector. “The Sapphire Ultracore wolf network is characterized by its steel soul, considerably reducing breakage by the action of marine mammals and with a rigidity such that it prevents them from pushing the nets into the cage raft and, in this way ,
The value of people
But, like the importance they attach to R&D, in Garware Technical Fibers They also care about 6,000 direct and indirect workers. Here, without a doubt, the key person has been in charge of Human Capital, Ravendra Mishra, who has been concerned with developing different programs that seek to improve the conditions of its employees. “One of them is to participate in Great Place tu Work, where we have been climbing in the ranking for seven years, when we participated for the first time,” says the representative of a company that, in its 40 years of life, has never had a worker’s strike. “In the end, it’s about listening to your demands and making the best effort to meet your demands. This has allowed us to have a very low labor turnover and, in addition, to get them to do their best to get the company to become a global leader, ”Mishra concludes.
It should be noted that in the next editions of AQUA, the innovations and results of the company will be addressed in detail, which will open a subsidiary in the region of Los Lagos in the coming days and will actively participate in AquaSur 2020.
Garware detalla su apuesta por el mercado acuícola chileno - SalmonExpert.cl Chile: The company of Indian origin has focused on developing textile solutions designed for local industry, such as networks to prevent predators and tarps to reduce the infestation of fish by parasites.
Garware Technical Fibers Ltd is a company dedicated to providing innovative solutions that add value to the operation of its customers.
Garware is listed on the Bombai’s Stock Exchange, is based in India and from there exports to 75 countries, and “today it has become the leading provider of networks for the global aquaculture industry,” says Salmonexpert Francisco Serra, Business Associate of the brand in Chile.
The company has offices in Australia, Canada, Norway, UK, USA and also in Chile, where Garware began with some tests from 2014, so that from there its participation was growing every year within the national market.
Serra delivers more details about the main products that the company is distributing in the country, their characteristics and the problems that Garware networks address and intend to solve in Chilean aquaculture.
What are the main products they are offering, particularly for Chilean salmon farming?
Garware has textile solutions in different industries that go through products for aquaculture, fishing, sports, transportation, safety nets in construction, geosynthetics, and products for agriculture, among others. In the case of the aquaculture industry, Garware has focused on developing textile solutions designed specifically for this industry, such as Star fishnets; nets to avoid predators (birds and sea lions); maneuvering ends and particularly for ends X2 for anchorage systems of the cultivation centers, which stands out for its low elongation and high resistance properties; tarps to reduce the infestation of fish by parasites and to prevent the entry of harmful microalgae to the cages.
What are the main local problems they are addressing?
For our company it is very important to listen to the client’s voice, know their needs and from there work the best solutions. We want to provide the greatest possible value to salmon producers in the development of solutions in fish nets that support the effects of abrasion and are an ideal alternative for washing in situ ; Wolf nets with greater resistance to cutting by sea lion bite; use of skirts for non-pharmacological control of Caligus. And solutions to minimize the effects of biofouling, or bioincrustrations in the entire range of aquaculture products.
How does the technology that minimizes the effects of fouling operate? Is the product available for Chile?
Indeed, this technology is available in Chile, we call it V2 and with it you can make fishnets, wolves, tarpaulins and capes. Garware has developed a special procedure that incorporates copper in the extrusion of the HDPE, with which the final product has the characteristic of being able to leach in a controlled manner the elements that will allow the networks to remain clean for longer in the water, reducing costs in network washing.
How is the experience of working with Garware in Chile?
Chileans and Indians are from different cultures, but with the same approach: they come to Chile to grow and stay. When you get to know the people of Garware better, you realize that they are a big family, they have the “Great Place to Work” certification, they are very innovative and in the last five years they have made more than 27 product patents; and they are also organized, as certified by their ISO9001: 2015 and ISO14001: 2015 certifications.
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i feel embarrassed to have found this stock so late; inspite of this being discussed on Valuepickr for so many years. I went through some of the posts on this thread and did some scuttlebutt myself. I feel a conviction that stock will grow steadily in years to come
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what was the scuttlebutt u did and what were the findings ? what prompted u to discover this stock?
My friend has a small start-up that’s into cleaning of lakes, they get projects from government bodies in the big cities to clean/maintain lakes. His opinion was that Garware nets were of good quality.
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Can anyone explain the surge in stock price observed? Trading at 1450 now.
hello vivek sir, one of my friend works with this company, 4 interesting things came out
- their nearest competitor has a much smaller market share
- they apparently have to reject some of their orders since they dont have sufficient capacity
- they have some very loyal customers in Europe and Canada, who prefer their products
- they are currently focusing on some high margin products rather than on high volume ones
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VP has some great threads where just by reading thread n buying some stocks huge wealth can be created.GTF being a prime example. still lot of juice left imho.
discl- invested since last 5 years @ 150-200 and averaged on upside .Havent sold any share.
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https://pragativadi.com/geo-textile-tubes-an-innovative-solution-for-coastal-defences/
Garware Technical Fibres Ltd. (formerly Garware-Wall Ropes Ltd.), a leading solution provider of technical textiles for the Indian and global markets, held a press conference in Bhubaneswar on the success of Pentha Project which was completed within a span of 3 years (2013-2016) in Odisha. The Pentha project was a pioneering project in Odisha to use soft intervention technology with 3 tiers of geo-textile tubes, for coastal protection.
The Geo-textile tubes helped in withstanding the extremely severe cyclones (viz ) ‘Phailin’ ,’Hud Hud’ and ‘Fani’ that hit the state of Odisha and its coastal neighbours. The geo-textile tube acts as a massive bund that can be used as a protective measure against tidal wave action due to cyclones or tsunamis. At the time of cyclone last year in the months of April 2019, the Pentha Village and the adjoining villages were not affected because of the existence of the Geosynthetics-Tubes.
Sharing his view on the success of the Pentha Project, Mr.Tiru Kulkarni, President Geosynthetics Division Garware Technical Fibres Ltd. stated, “The Pentha Project is a landmark project for Garware technical Fibres Ltd.; as this project had proved to be immense help for the villagers residing along the coastline. The livelihood of people based out at Pentha is primarily based on farming and the Geosynthetics-tubes helps in protecting around 6000 hectares of crop land and prevents the salty water to enter into the paddy fields. We at Garware Technical Fibres Ltd. believe to work for the welfare of the society and contribute towards a better living. The innovative techniques used by our personnel have helped in successful completion of the Project. We hope to add value to the society with our growing business.”
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Q3 FY20 Highlights:
-
Net Sales increased by 6.1% to Rs. 235.78 Cr in Q3 FY20 as against Rs. 222.18 Cr in Q3 FY19
-
Profit before tax increased by 5.2% to Rs. 38.29 Cr in Q3 FY20 as compared to Rs. 36.40 Cr in the same quarter last year
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Net profit after tax has grown by 17.2% to Rs. 28.95 Cr in the quarter as against Rs. 24.71 Cr in the corresponding period of FY19
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EPS for Q3 FY20 is at Rs. 13.23; this is a growth of 17.2% over Q3 FY19
9M FY20 Highlights:
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Net Sales decreased by 3.8% to Rs. 700.53 Cr in 9M FY20 as against Rs. 728.28 Cr in 9M FY19
-
Profit before tax decreased by 5.5% to Rs. 124.03 Cr in 9M FY20 as compared to Rs. 131.25 Cr in the same period last year
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Net profit (PAT) has increased by 17.7% to Rs. 104.80 Cr in the period as against Rs. 89.01 Cr in the corresponding period of FY19
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EPS for the period stood at Rs. 47.89 in 9M FY20; this is a rise of 17.7% over same period last year
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Pretty detailed and insightful article on Garware’s innovation and work ethics.
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The company’s past performance looks excellent. They created new and better products, thus claiming better margin, and focused on operation excellence. Leading to good EPS growth over the years. But there are few concerns in related party transactions of Garware Technical Fibers.
- In FY 2013, company sold a flat to Mr Vayu Garware for Rs 10.2 Cr. and company has again leased out the flat from Vayu Garware from.
a. Rent Paid in 2014 - 63 L (Rental Yield 6.17%)
b. Rent Paid in 2015 - 84 L (8.23%)
c. Rent Paid in 2016 - 78 L (reported in 2016 that they paid 72 L in 2015) (7.64%)
d. Rent Paid in 2017 - 79 L (7.74%)
There is no separate line item for this transaction in 2018 onwards, but the question is if the company needed to have a flat. Why not to have flat on company’s book? Company paid on average 7% rental payment for the property. I highly doubt there exists a property in India giving such high rental yield. - Company year after year take deposits from several companies owned by promoter group and at the end of the year returns most of the deposit, but pays interest for such money.
| Financial year | Deposits Received | Interest Paid | Interest Rate |
|---|---|---|---|
| 2008-09 | 10.09 Cr | 0.87 Cr | 8.62% |
| 2009-10 | 17.04 Cr | 1.39 Cr | 8.16% |
| 2010-11 | 20.5 Cr | 1.6 Cr | 7.8% |
| 2011-12 | 25.5 Cr | 2.8 Cr | 10.9% |
| 2012-13 | 37.99 Cr | 3.69 Cr | 9.7% |
| 2013-14 | 48.45 Cr | 2.83 Cr | 5.8% |
| 2014-15 | 11.17 Cr | 2.45 Cr | 21.93% |
| 2015-16 | 18.88 Cr | 3.05 Cr | 16.15% |
| 2016-17 | 19.32 Cr | 3.15 Cr | 16.3% |
| 2017-18 | 47.53 Cr | 3.62 Cr | 7.6% |
| 2018-19 | 47.9 Cr | 4.19 Cr | 8.74% |
Except for a few years, Interest charged has been modest, but why does company continuously need to take deposit when company is itself cash rich. At the end of FY 2018, company had an investment worth of 244 Cr, why could company not utilize this amount rather than going for 48 Cr deposit in FY 2019.
- In recent years, company’s investment has increased highly, 9 Cr in 2016 (mostly into their other subsidiaries and all) to 384 Cr in September 2019 (Mostly into debt mutual funds). What is the company’s intention with this increasing investment amount? Dividend Payout as percentage of net profit has continuously declined over the years. It was 25% in 2012, declined to 15% in 2015 and came to the level of 9% in 2019.
People tracking the company can throw some light on these issues.
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Garware-Analysis.pdf (189.6 KB)
Attached is my analysis of the company.
Positives:
Its moving towards creating a MOAT business.
Negatives:
Related Party transactions (Mainly coming to know by reading though various forums.
Please let me know
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Hi Vivek,
Keen on hearing you view about entering GTF at current rates. Do you see any major slowdown happening due to covid or does garware’s exposure to multiple industries ensure that it pulls through