Garware Hi-Tech Films shares hit 20% upper circuit to touch record high on robust Q1 earnings

Shares of Garware Hi-Tech Films, a global manufacturer of solar control films, paint protection films, and other specialty polyester films, surged to the 20% upper circuit limit today, reaching a new all-time high of ₹2,895 per share, after the company released its June quarter results.

The company reported its Q1 FY25 performance during market hours today, posting a 102.2% year-on-year increase in consolidated net profit, amounting to ₹88.4 crore. Revenue from operations also saw a 25.0% year-on-year rise, driven by continued growth momentum in the Sun Control Films (SCF) and Paint Protection Films (PPF) businesses.

EBITDA experienced strong growth, increasing by 78.7% YoY and 44.9% QoQ. The EBITDA margin improved to 27.4%, up from 19.2% in Q1 FY23 and 20.1% in Q4 FY23.

Strong efforts in sales and marketing significantly boosted the high-end SCF and PPF business. The architectural segment of SCF saw significant growth with the introduction of new products.

Garware Hi-Tech Films is a leading manufacturer and supplier of high-quality, durable, and highly tensile polyester films, solar control films, and paint protection films globally. It is the only producer of professional-grade Premium Paint Protection (PPF) film in India, currently selling its products in around 90 countries, with exports accounting for 77% of its sales.

In 2018, Garware Hi-Tech Films underwent a significant shift in its business strategy, resulting in strong performance in the specialty films industry. This strategic shift led to higher margins and a highly differentiated product portfolio, enhancing the company's market position and growth prospects.

The company boasts a production capacity of 42,000 MT per annum in its Industrial Product Division (IPD) and 4,500 LSF per annum in its Consumer Product Division (CPD).

Phenomenal performance

The company's shares have been on a consistent winning streak, concluding the last 13 out of 17 months with impressive gains. From their March 2023 trading price of ₹491 apiece, they have surged by a remarkable 500% to trade at the current price of ₹2,895 apiece.

Over the last one year, the shares have jumped 214%, and in the last four years, they have gained 1260%. For CY23, the stock delivered a stellar return of 114%, while it continued to surge for the current year as it is already up by 106%.

Architectural film: The next growth engine for SCF

Architectural films are specialised films applied to glass surfaces in buildings for various purposes. They are used to enhance aesthetic appeal, improve energy efficiency, provide privacy, and protect interiors from harmful UV rays and heat.

The company said its architectural film segment experienced significant growth during the June quarter, driven by the introduction of new products. The company anticipates that this growth will continue in the coming years.

It launched Spectra Pro Architectural Films, designed for high heat rejection and high visible light transmission (VLT). These films are particularly appealing to luxury homeowners, commercial hotels, and corporate properties. They offer lower reflectivity than glass, allowing most light to pass through while providing excellent heat rejection.

Additionally, the company introduced the DecoVista Series Decorative Film, a stylish alternative to designer glass. The global SCF market is projected to grow at a CAGR of 5.8% from 2022 to 2032.

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