Garware Hi-Tech Films, formerly known as Garware Polyester, stands as a pioneering force in the polyester film manufacturing industry and a significant player.
Mr. Joshi
Question 1: Mr. Joshi, Congratulations on the excellent performance of Garware Hi-Tech Films limited. Before we go into the details, could you give us an overview about the company and its history?
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Answer 1: Garware Hi-Tech Films, formerly known as Garware Polyester, stands as a pioneering force in the polyester film manufacturing industry and a significant player in the global market for high-performance films. With a history dating back to 1957, we have built a legacy of over 90 years rooted in innovation, quality, and excellence. Our company is renowned for its advanced technologies and diverse product portfolio, which includes solar control window films, safety and security films, and paint protection films, serving the automotive, architectural, and industrial sectors.
This remarkable journey was driven by the vision and leadership of Dr. Shashikant Garware, a pioneer of industry, a doyen of the polyester revolution in India, and a beacon of philanthropy whose legacy continues to inspire us. Under his guidance, Garware Hi-Tech Films Ltd. introduced numerous technological advancements, including high-tech polyester products for electrical insulation, yarn, packaging, and the establishment of robotic injection molding plants for magnetic tapes. In 1982, it was under his vision that the company introduced U.V. Stabilized Polyester Film, a product patented for its energy-saving and efficiency-enhancing properties, marking a significant milestone in our innovative journey.
Question 2: Mr. Joshi, could you share some of your company’s notable achievements and accolades?
Answer 2: Certainly. We are a fully vertically integrated company and are proud to be the world's largest manufacturer of sun control films, as well as operating the largest paint protection film manufacturing facility globally. It's worth highlighting that we are the only manufacturers of sun control films and paint protection films based in India.
Our accomplishments have been recognized with several prestigious awards. We are honored to have received the Gold Shield Award from the Government of India, the CII Innovation award 2023, and have been the recipient of the Top Exporters’ Award from Plex Council for 4 consecutive decades.
Our technological leadership and unwavering commitment to innovation have enabled us to control approximately 70% of the shrink films market in India through our extensive range of industrial film products (IPD).
Question 3: Who is the executive leadership of GHFL? Who looks at the daily operations/day to day decisions at GHFL?
Answer 3: Dr. Shashikant Garware, in his capacity as Chairman and Managing Director, has been the driving force behind our company's vision and mission, playing a crucial role in shaping our strategic direction. His leadership has laid a strong foundation for the company's continued success. The next generation of leadership, including Ms. Monika Garware, Ms. Sonia Garware, and Ms. Sarita Garware, are actively involved in managing day-to-day operations. They guide the company towards new achievements with their combined expertise in marketing, sales, manufacturing, and administration, ensuring that the various business verticals grow robustly and dynamically.
This leadership is further supported by a team of experienced management professionals, a strong and motivated sales and marketing force, & a highly innovative technical team. These teams work together to oversee the operations of our manufacturing plant, continuously drive product innovation, and ensure that we remain at the forefront of our industry.
Question 4: Mr. Joshi, we have seen the stock price has seen a 6x return & the profits have grown 22% YoY in FY24, what have been the key drivers behind this tremendous growth?
Answer 4: Certainly, we achieved significant success in FY24, driven by our strategic focus on specialty films and value-added products, with Paint Protection Films and Architectural Films now accounting for 88% of our total business.
In the automotive segment, we have significantly strengthened our presence in tier 1 and tier 2 cities through targeted micro-market omnichannel sales and marketing initiatives. Collectively, we now operate over 120 Garware Application Studios and have a distributor network across tier 1 and tier 2 markets, serving more than 650 dealership stores with Garware Automotive Films. We also boast a strong force of over 750 trained and certified applicators under our well-established brand name.
In the architectural films segment, our focus on premiumization has led to margin expansion and successfully catered to the demands of premium customers. We have streamlined our product portfolio into premium and non-premium categories, with a strong emphasis on securing high-margin sales through key projects and B2B accounts.
Concurrently, our investments in digital marketing and robust lead management systems have deepened customer engagement and maximized conversions. Collaborations with influencers have further enhanced our brand’s authenticity and extended our reach.
Additionally, our active participation as sponsors and suppliers at prominent events like the Royal Enfield Motoverse, Automechanika, Plex Council Expo 2024, and D-Arc Build has significantly increased our brand visibility and fostered customer loyalty.
Question 5: Mr. Joshi, could you please provide an overview of Garware Hi-Tech Films' performance during the first quarter of FY25? Let us begin with your performance in the automobile segment.
Answer 5: Certainly. We experienced tremendous success in FY24, and I’m pleased to report that we have sustained that momentum into Q1 FY25, showcasing significant growth. Our overall sales and EBITDA margins for Q1 FY25 have increased by approximately 25% and 80% year-over-year, respectively. Additionally, our Profit After Tax (PAT) for Q1 FY25 has doubled compared to the same period last year.
In Q1 FY25, our automobile films business contributed close to 60% of our overall revenues, becoming the top portfolio for us. Our Sun Control Films (SCF) business demonstrated robust revenue growth, driven by higher sales of high-end, value-added products, and successful expansion into new markets and customer segments.
In the Paint Protection Films segment, we have broadened our portfolio to cover the entire price spectrum, catering to both premium and mass-market customers. This includes our top-tier Titanium Series, as well as the Matte, White, and Black Series, along with Premium and Plus SKUs in the medium and mass-market segments. Demand for these products remains strong, with operations currently running beyond capacity. We have also continued to expand our network of channel partners and Garware Application Studios (GAS) into high-growth and emerging markets.
Question 6: How was your performance in the architectural and industrial films segment in Q1FY2025?
Answer 6: In the Architecture segment, we have grown significantly, and it is on the path to contribute 25%-30% of our overall SCF portfolio (up from 15%). We launched several innovative solutions that enhance both the aesthetics and functionality of buildings. Our architectural films are designed to improve energy efficiency, provide UV protection, and elevate the overall visual appeal of structures. Recently, we introduced the Spectra Pro Series, a high-durability film series known for its market-leading features, including UV protection, IR rejection, and energy efficiency. Additionally, we launched a new line of decorative and designer films under the "DecoVista" brand, offering over 500 unique designs. These product launches underscore our commitment to advancing technology and delivering exceptional value to our customers.
In our Industrial Product Division (IPD), we observed a recovery in both specialty and commodity sectors, with marginal growth in Q1 FY25. Our focus on premium products, such as newly developed lidding films and PCR and floatable shrink films, is contributing to enhanced profit margins within this segment.
Question 7: Mr. Joshi, could you also please provide an overview of our International/exports business?
Answer 7: Our global business, particularly in exports, now contributes to 77% of our overall revenue and extends our presence to over 90 countries. We've experienced strong performance across all key regions and anticipate continued growth in demand across our product categories. The U.S. remains our largest export market, contributing 48% to our overall business, followed closely by Europe at approximately 11%, and ASEAN countries at 12%.
In addition, we have successfully expanded into new geographies within these regions, including Japan, the Philippines, Uzbekistan, and Spain. To further fuel our growth, we have strengthened our leadership by adding senior roles in key markets such as Singapore, the UK, and the UAE. These strategic initiatives have established clear leadership in these regions, positioning us for significant growth in the near future.
Furthermore, our global network of trained and certified tinters has now grown to over 5,000 skilled professionals, reinforcing our commitment to quality and expertise across all markets.
Question 8: Mr. Joshi, could you please provide some insights into the company's future outlook and the key initiatives that will be undertaken to achieve our next set of goals?
Answer 8: We have set ambitious growth targets for both sales and profitability in FY25, and we are committed to achieving them. Key initiatives across our verticals include a strong focus on promoting high-margin SKUs, such as the PPF Titanium series in the automotive segment, safety glazing sun control films, and the Platina series of architectural films. We are also exploring new B2B partnerships in the automotive and architectural film sectors to secure high-volume, sustainable orders.
In parallel, we are making significant investments in our digital and on-ground marketing efforts. This includes enhancing our presence on social media, improving our company website, participating in key exhibitions and conferences, and developing innovative, first-of-its-kind software for the Indian market.
For our international markets, we are aggressively expanding our automotive and architectural film offerings, with a particular focus on key export markets in the Middle East and ASEAN regions. In these areas, we have observed strong demand, especially for our higher-end architectural film SKUs.
Question 9: Finally, Mr. Joshi can you also update us on your CAPEX plans?
Answer 9: We foresee continued strong demand in both international and domestic markets, particularly within the Paint Protection Films (PPF) segment. To meet this anticipated demand, we announced during our last quarter earnings call that we will be setting up a new PPF production line. This new line will have an annual capacity of 300 lakh square feet, supported by a capital investment of INR 125 crores. With this addition, our total production capacity will increase to 600 lakh square feet per annum. We expect this new line to commence commercial production by the second quarter of FY26.
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