GARWARE HITECH FILMS -
Q2 and H1 FY 24 highlights -
Financial outcomes in Q2-
Revenues - 397 vs 395 cr
EBITDA - 65 vs 67 cr ( margins @ 16 vs 17 pc )
PAT - 46 vs 48 cr
SunControl, PaintProtection businesses - did well. Industrial products division witnessed some decline
Value Added sales @ 90 pc of total sales - very positive for long term. Commodity products sales now @ 10 of the total
Consumer Products division - ( includes sun control, paint protection films ) grew by 53 pc !!!
Industrial products division reported a decline of 32 pc in revenues
Paint protection film revenues doubled in Q2 vs Q1 FY 24 !!! This happened due robust demand from US and Indian distributors
Company has tied up with over 500 OEM car retailers for installation of PP films. Aim to tie up with over 900 dealers by next yr
Sun Control films grew by 8 pc vs Q1 FY 24
Expanding into architectural and decorative sun control films - should have a bright future going forward
Industrial Products business (IPD) de-grew sharply in Q2 due strategic focus on Consumer products division (CPD) and headwinds in IPD business. Seeing some recovery in IPD business in Q3
Company’s Gross Debt at - NIL
Cash Balance @ 350 - indicating strong financial position
Company has ramped up its marketing expenses wrt to both SCF and PPF business. This capped the EBITDA margin expansion in Q2. CPD is an invest to grow business with higher margins. That’s why the higher initial spends
Currently, the company is receiving overwhelming response in the CPD division
For SCF,PPF, Shrink films etc - company is the only fully backward integrated player in the world
Have spent additional 8 cr towards pushing the CPD in Q2. Likely to continue this kind of spending in Q3, Q4 and then revise it in FY 25
IPD business demand from North America was subdued in Q2 which led to business decline and a hit on margins. Hence, despite clocking much higher CPD sales, overall margins remained at similar levels as LY
Expecting North American IPD business to see some recovery in Q3
Have got commercial approvals from M&M for PPF coatings on XUV-700. Expecting approval from another 3-4 OEMs going forward. This should lead to more than decent volume uptick in domestic PPF volumes
Company still maintains a sales guidance of Rs 2500 cr for FY 26 - company is confident of achieving the same !!!
For FY 25, Architectural and Paint protection films should be the primary growth drivers
The new SCF lines are fungible and can be used to produce PPF products as well. Can be used in accordance with demand from these two segments. De-Bottlenecking can be resorted to further expand capacities
Company sees structural improvement in Gross Margins 18-20 months down the line
PPF sales in Q2 @ 120 cr ie 30 pc of topline. This percentage should further improve going forward
Sales from SCF @ 36 pc of topline in Q2. Business momentum in SCFs is also strong
In 2-3 yrs, expect 80 pc of business to come from SCF + PPF ( 40 pc each ). Expect remaining 20 pc of business to come from IPD
PPF penetration in Indian Auto Mkt is about 0.5 pc of total Cars. In China, US the penetration is > 10 pc. Company aims to take Indian penetration to around 2 odd pc of the cars
Disc: holding, biased, may add more if performance improves, not SEBI registered