Got good insight in Garware wall rope. As i have also got interest in this company as it is operating in niche segment and can have first mover advantage with good research and development and moving from commoditised products to value added products. One more major advantage i am looking at is its CEO : who spent lots of time to understand this business and now completely groomed with his strategy to move ahead with value added products with high margins and major benefit is he is young and only 40 years old so he got lots of time and energy to move this company to different levels.
As i have some questions regarding its balance sheet if you can clear it will be benefit to take an investment decision.
1 ) as someone mentioned before they have charges only Rs.5 crs for tax in cashflow statement while it was Rs.20 crs in profit and loss statement
2)As you see their Short term loans and advances further increased to 204 crs. as on H1Fy17 balance sheet from Fy2016 - Rs.176 crs,comprise Advances recoverable in cash or in kind - 106.78 crs, what is this stand for ?
3) Short term provision has a huge amount of Rs.229 crs in the balance sheet - it comprises of other provision of Rs. 146 crs but no clarification of other provision?
I have the same concerns about quality of balance sheet. It has too much of short term assets and liabilities relative to the size of the balance sheet. Normally for a manufacturing company, I want to see lots of fixed assets as that is what is funded by debt and equity. This company has persistent short term assets, other liabilities and I could not find enough explanation for it in the balance sheet schedules.
Just in the first 2 quarters of this FY, net current assets have gone up by 23 Cr almost half of of the net profits for the period but cash has gone up by just 5 Crs. It also has a short term borrowings of 36 Crs on which it has paid interest expense of 3 cr in H1 FY17 while also carrying a cash balance of 83 Cr.
Overall not impressed with quality of balance sheet.
Just to elaborate on your points from annual report. Figures have changed a bit in H1F17.
The said deposit was received from Late Shri. R. B. Garware, and the same will be repaid on production of Probate of the Will dated 6th April, 2012 of Late Shri R. B. Garware. The figures include unpaid interest net of TDS.
What’s taxation here? Also, not sure what these “other provisions” are. Pretty big sum it is.
Investments include purchase in other Garware group companies (in lacs) - Majority of which are -
Not so good use of money?
Why so much advance tax?
Advances recoverable in cash or kind from creditors of 106 cr. What are these?
Summing up the interview to ET …CMD said - there are 4 major export markets (Canada, Scotland, Norway, Chile). They already have significant presence is Canada and Scotland. Eyeing Norway and Chile now. Efforts are on! Margins will be maintained going forward due to their R&D effort. Domestic sales will ramp up, and q3 was one off qtr due to demonetization. (Q3 by far has always been the weakest qtr for them due to lower exports. This time the domestic market was further impacted due to currency ban, and thus they ramped up efforts to boost exports to lower overall impact.).
So, they are clicking all the boxes here for a good runway…debt free, good young mgmt, targeting new markets, R&D spend paying off, not much dependence on crude in terms of margins…
Thanks dear Atul.
The company looks to have good credentials. I was a bit worried about their growth. It appears they will plan their expansion based on the demand but not on pushing their product for the market. They will always try to maintain their capacity utilisation @ 75-90%.
After Chile GWR is looking for a Country Manager in Norway slowly n steadily increasing it foot print & opp size .Beautiful execution happening under dynamic duo of Vayu & Shuja.
Garware-Wall Ropes Ltd. is a publicly listed company in India employing around 3600 persons, with annual sales exceeding US$150 million, exports to 72 countries around the world. It is recognized as one of the leading international manufacturers of synthetic netting, cordage, vinyl coated fabrics, and products fabricated from these materials, sold in a variety of industries as fisheries & aquaculture, sports & safety, shipping, mooring & towing, agriculture & other Industries. The company also has a geosynthetic division which provides various turn key services and supplies goods required by the geosynthetic market. GWRL has been growing rapidly in the aquaculture industry in key regions like Canada/USA, Scotland, the Mediterranean and is now focused on Norway. GWRL is now in this business for 40 years and is one of the biggest players in the aquaculture industry worldwide. Success has come to GWRL due to its commitment to a mission of providing “innovative solutions to our customers worldwide in order to enhance their profitability“. Continued product development based on voice of customer is the company’s greatest focus and achievement. GWRL has fully functional offices in the USA, Canada, the U.K., Australia and is also represented in Norway by our dedicated distributor.
Garware-Wall Ropes Ltd. is expanding and now looking for a Country Manager Norway
The Country Manager Norway will support the excisting partner and maintain excellent contact with the salmon farmers and their key staff. The Country Manager Norway will be responsible for getting frequent and accurate data of the market feedback on new products, their installation and performance, and add to the infrastructure for sufficient sales growth in Norway. As Country Manager Norway you will drive customer conversion from old products/ technologies to new and successful GWRL products. .
Your tasks will be:
Work closely with our Norwegian distributor to manage operations, develop business and increase profitability within the Norwegian market.
Manage operations, develop business and increase profitability within the Norwegian market.
Develop and implement strategies for sales area aligned with the GWRL´s objectives.
To develop and maintain strong contacts with potential customers within the Norwegian aquaculture industry to further the introduction and sales of GWRL products therein.
Close coordination with the research and development team in India to work on new product introduction into Norway.
Ensure consistency in quality through support of products, standards and specifications.
Give accurate feedback on performance and continually upgrade products, in order to become a leading supplier to the Norwegian aquaculture industry.
Does someone have any know how of the large number of Related party transactions (Deposits received and interest paid on these deposits) the company has with companies related to its KMPs and Directors? There are close to 15 such companies mentioned in the Annual Report, mostly being ‘XYZ Investments and trading co Ltd.’ Tried googling some of them but didn’t find anything useful.
Garware brands command a premium over other competing brands, generally ranging between 20-25%.
Garware HDPE Nets sometimes there is even a waiting period.
Fishing Nets have a life span of 6-12 months based on the product type. Only a few type of nets can be repaired and most others have to be replaced in case of any damage. This implies these are consumables rather than capital goods and fisherman have to keep buying every now and then.