Thread by @LnprCapital

GARWARE HI-TECH FILMS Analysis !!
#GRWRHITECH

A detailed thread below 🪡🧵
#StockMarket #Investing

About -

Garware Hi-tech Ltd (GHL) founded in 1981 has been one of the leaders in the specialty polyester films industry both in India as well as in international markets. It exports to over 80+ countries that contributes almost 3/4th of its revenues.

• Co is 3rd largest brand for SunControl films in leading markets like US, Europe & Middle East.

• Only manufacturer of Paint Protection & Suncontrol Films in India.

• Market leader with more than 90% market share in shrink film manufacturing in India.

Financial Summary -
Q4 FY22 (YoY)

Revenue were at ₹ 339 Cr vs 294 Cr
PAT at ₹ 45 Cr vs 32 Cr
EPS at ₹ 19.42 vs 13.69

Revenue by Region -

Co exported to more than 80+ Countries worldwide
~73% Exports contribution to Revenue in FY22.

Manufacturing Facilities :

▪️ Waluj, Aurangabad -

• High-tech integrated manufacturing plant for Polyester Chips, Polyester Films & Sun Control Films.

• DSIR Approved High-Tech Research & Development facility.

• New manufacturing facility setup for Paint Protection Films

• Capacity expansion cost of ₹ 115 Cr. for upgradation of plant; adding new equipment for diversification & creation of new capacity.

▪️ Chikalthana,Aurangabad -

• Production lines manufacturing of Electrical Insulation & Shrink Films.

• Advance plant and follow a zero-discharge scheme

• Capacity expansion cost of ₹ 20 Cr for upgradation of Plant.

Capital Expenditure -

Planned Capital Expenditure of ₹ 270 cr

• (Completed)
Tranche 1 - ₹ 135 cr.

Upgradation of Manufacturing Facilities Setup of New Paint Protection Film Manufacturing Line

- Capacity of 300 LSF, to attain full capacity utilization in a staggered manner over next 2 yrs

Metallizer Installed Capacity of 3,400 MT pa

(In progress)
Tranche 2 - ₹ 135 cr

Setup of New Lamination Window Film Manufacturing
Line

New Lamination facility augmenting Window film vertical having an estimated capacity of about 1,800 LSF p.a is nearing completion

Expected to commence commercial production by Q2 FY23

Industrial Product Division (IPD) :

▪️ Polyester Films -

• Leader in India in Shrink Films & Low Oligomer Films

• PET Shrink films for label

• Electronics & Electricals

• Packaging Application

• Release Liner

• Other Products- Heat Seal & Holography , Reprography.

▪️ Metalizing & Coating -

• Lidding (Peel-able)

• PET Labels

• BOPP Labels

• Digital Print Media

• Metallised Barrier Films

▪️ Thermal Lamination -

• Book Covers

• Magazines

• Digital Prints

• Catalogues

• LabelApplication (Glossy/Matte)

▪️ Consumer Product Division (CPD) :

• Automotive Films -

Manufacture variety of films for automotive applications which are available in VLT, UV & heat rejection forms.

They reduce overall heat from entering the car
interiors & keeps it cool.

Automotive Films 100% Exported, 2nd Largest
Capacity globally & ranks 3rd in US & European Markets.

• Paint Protection film -

Protects car paint from external damages like scratches, dust dirt, bird droppings, bug marks, stone chips, etc.

Available in 6 Mil thickness & glossy variant. It’s a self healing & hydrophobic coated film.

Premium product - only manufacturer of Paint Protection Film in India

• Architectural Films -

Manufacture variety of films for architectural applications, ideal for any glass tint.

They reduce overall heat from entering the residential & office interior keeping it cool.

Only Indian Manufacturer of SunControl Films.

• Safety & Security Films -

Gives additional strength, reduces glare & prevents
glass from splintering on impact.

Typical thickness are 4 Mil & 7 Mil & in combination with Suncontrol films.

▪️ Value Added Products :

• SunControl Films -

Co is the only one of its kind to manufacture Chip-to-films, Films to Metalized Films to Suncontrol Window Films giving it the ability to create unique

chemistry for films for specialist end applications designed for high performance.

Co is an important Global market player & only Indian Company to manufacture the Suncontrol Films with
complete vertical integrity.

5,000 tinter-network across USA for all Automotive applications

• Paint Protection Film -

Paint Protection Film is designed to give Automobile Paint Coatings, the highest level of protection & impact resistance & these films are clear, self-healing Paint Protection Films

The PPF is manufactured using a specially formulated
Thermoplastic Polyurethane film (TPU) which offers high reliability & consistent performance.

The highly specialized film protects the vehicle’s paint from scratches, dents & damage caused by road debris & rocks etc.

• Shrink Films -

Garware Hi-Tech Films Ltd. holds 90% market share of Shrink Film manufacturing in India

Excellent printability and smooth surface

High Resolution Graphic, clear and high quality prints

Higher shrinkage in comparison to OPS & PVC

Cover high contour innovative shaped

Low temperature shrinkage – helps save energy

Provides full body 360 ̊print coverage

Its operational efficiency & conformity to difficult shape containers help in impactful brand association for wide range of applications

Key Investment Rationale -

• Market Leader with more than 90% market share in
shrink film in India.

• Focus on value added products: Paint Protection
Film launched (only one manufacturer in India) & it’s estimated to contribute revenue of ₹ 300cr by 2023 at 100% capacity.

Key Risks :

- Sharp rise in Competition Intensity
- Inability to scale-up SPF and PPF business post expansion
- Sharp rise in Raw material Inflation

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