Garware Hi-Tech Films Limited has informed the Exchange about Transcript of the Earnings Conference Call on Unaudited Financial Results / Business Performance of the Company for the quarter ended June 30, 2025
GRWRHITECH · price
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Garware Hi-Tech Films reported Q1 FY26 consolidated revenue of INR 495 crores, up 4.3% year-on-year, while PAT declined to INR 83 crores from INR 88.4 crores. EBITDA margin compressed to 24.8% from 27.4% due to higher employee and marketing costs. The Paint Protection Films (PPF) segment grew ~28% year-on-year, supported by adoption in North America and the Middle East and expansion of Garware Application Studios (now 250+, targeting 300 by March 2026). SunControl Films fell ~7% and Industrial Products shrank ~3%, with shrink films down ~29% on early monsoons, weak beverage demand, and US tariff uncertainty. US tariffs have stacked from 6.25% to 16.25% (April), plus 15% from August 7, with another 25% being evaluated. The company remains debt-free with over INR 700 crores in cash, and is investing in a second PPF line and a new TPU plant. Management declined to reaffirm or revise its prior FY26 revenue guidance of INR 2,500 crores, citing tariff uncertainty.
Short-term: Tariff escalation and margin compression pose earnings risk, especially since the US accounts for ~45% of revenue and management refused to quantify absorption capacity. Medium-term: PPF growth and Middle East/Europe diversification (30-40% and ~20% growth targeted) along with the debt-free, cash-rich balance sheet provide resilience and capex flexibility, but guidance withdrawal signals cautious near-term outlook.