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    Garware Hi Tech

    GRWRHITECH
    Capital Goods·14 Nov 2025
    Management Summary

    Garware Hi-Tech Films delivered a resilient Q2 FY26, with revenue growing 15% QoQ to ₹569.7 crores, although experiencing an 8.2% YoY decline due to U.S. tariffs and a high base. EBITDA margins were maintained at a healthy 23.4%, supported by cost optimization. The company remains debt-free with strong liquidity, while non-U.S. markets and architectural films showed robust growth, offsetting some of the tariff-related pressures.

    Highlights

    5

    • Consolidated revenue grew 15% QoQ to ₹569.7 crores, reflecting operational agility despite external headwinds.

    • EBITDA margins remained healthy at 23.4%, underscoring disciplined expense management.

    • The company maintained a debt-free balance sheet with a robust cash and liquid investment balance of ₹697 crores as of September 30, 2025.

    • Non-U.S. business demonstrated strong growth of approximately 20% YoY.

    • Architectural film business continued rapid expansion, growing 25-30% in India and 20-25% in Europe.

    Concerns

    5

    • Consolidated revenue declined 8.2% YoY to ₹569.7 crores due to base effect and U.S. tariff disruptions.

    • EBITDA declined 11.4% YoY to ₹133.3 crores, primarily due to tariff-related impacts.

    • PBT decreased 12.8% YoY to ₹120.4 crores.

    • PAT decreased 12.5% YoY to ₹91.2 crores.

    • The 50% tariff imposed by the U.S. government significantly impacted the high-value PPF business.

    What Changed2

    vs Q3 FY26

    Guidance items13 → 10 (-3)Risks discussed3 → 4 (+1)
    Key financials

    Metrics

    7

    Periods

    2

    Q2 FY26

    5
    • Revenue
      ₹569.7 Cr
      YoY-8.2%QoQ+15%
    • EBITDA
      ₹133.3 Cr
      YoY-11.4%QoQ+8.4%
    • EBITDA Margin
      23.4%
    • PBT
      ₹120.4 Cr
      YoY-12.8%QoQ+9.1%
    • PAT
      ₹91.2 Cr
      YoY-12.5%QoQ+10%

    H1 FY26

    2
    • Revenue
      ₹1,065 Cr
      YoY-2.8%
    • EBITDA
      ₹256.3 Cr
      YoY-8.6%

    Segment breakdown

    Window Film
    50% Share of Revenue42% Previous Year Share
    Paint Protection Film (PPF)
    25% Share of Revenue31% Previous Year Share20% Last Financial Year Share
    Industrial Products (IPD)
    25% Share of Revenue30% Previous Year Share
    Exports
    76% Share of Revenue
    Domestic
    24% Share of Revenue
    Architectural Business
    35% Growth (India)20% Growth (Europe)25% Growth (Europe)₹250 Cr Current Contribution (FY26 estimate)₹300 Cr Current Contribution (FY26 estimate)
    Automotive Segment
    10% Growth15% Growth
    List

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Debt

    Debt disclosed

    Liquidity

    Cash ₹697 crores

    Robust cash and liquid investment balance provides ample headroom for strategic CapEx.

    Guidance & targets

    10
    CategoryTargetPriority
    Profitability
    EBITDA Margins
    25% +/- 3%
    		Medium
    Profitability
    EBITDA Margins (with tariff deal)
    20% to 25%
    		Medium
    Profitability
    EBITDA Margin Improvement from TPU line
    1.5% to 2%
    		High
    Revenue
    Architectural Business Revenue
    INR 500 crores
    		High
    Revenue
    U.S. Business Revenue
    same or slightly better than last year
    		Medium
    Growth
    PPF Business Growth
    20%
    		High
    Growth
    Automotive Window Film Growth
    15% to 20%
    		High
    Growth
    Architectural Window Film Growth
    25% to 30%
    		High
    Capacity
    TPU Line Commissioning
    on track
    		High
    Market Penetration
    Garware Application Studios Network
    300+ studios
    		High

    Resolution of U.S. Tariffs

    by December 2025
    Current50% tariffs in effect, potential deal by December 2025
    TargetTariff reduction or removal

    Why it matters

    Tariff resolution is crucial for improving margins and U.S. business revenue, especially for the PPF segment.

    But the challenge is this tariff, and we are hearing quite good news from U.S. market, including the courts and the tariff deal between India and U.S.A. So if all that happens, I mean, within this month or by December, I think we should be able to maintain the volume or I would say grow over the last year.

    How to verify

    guidance_and_targets[metric='EBITDA Margins (with tariff deal)']

    Risks & concerns

    4
    RiskSeverity

    U.S. Tariffs

    Increased duties by up to 50% on all product categories, significantly impacting the PPF business and leading to YoY revenue/EBITDA decline. Management is absorbing some costs and passing on others. — Management acknowledged

    high

    Geopolitical Volatility

    Persistent geopolitical volatility posed a significant challenge for the business during the quarter. — Management acknowledged

    medium

    High Base Effect

    Q2 FY25 was the highest ever quarter for revenue and bottom line, making YoY growth comparisons challenging for Q2 FY26. — Management acknowledged

    medium

    Competitive Intelligence

    Competition is attempting to map the company's growth numbers and manpower, leading to more concise disclosures in earnings calls. — Management acknowledged

    low

    Q&A highlights

    7

    “So on tariff situation, so we are managing in a way like, whatever our customers can absorb, because they have to sell it to the end consumer in U.S. market. So whatever the number we are able to agree to pass it on with them, we are doing that and balance we are absorbing.”

    Clarifies how the company is mitigating the impact of U.S. tariffs by sharing the burden with customers and absorbing the rest to retain market share.

    asked by Mahesh Bendre

    2 min read5 chapters

    Detailed Narrative

    01

    Q2 FY26 Performance Overview Amidst Challenges

    Garware Hi-Tech Films reported Q2 FY26 consolidated revenue of ₹569.7 crores, marking a 15% sequential growth over Q1 FY26. However, this represented an 8.2% year-on-year decline, primarily attributed to a high base effect from Q2 FY25 and significant U.S. tariff disruptions. EBITDA stood at ₹133.3 crores, down 11.4% YoY but up 8.4% QoQ, with healthy EBITDA margins maintained at 23.4% due to disciplined expense management and a favorable product mix. PAT for the quarter was ₹91.2 crores, a 12.5% YoY decline.

    02

    U.S. Tariff Impact and Mitigation Strategy

    The company faced a significant challenge from U.S. tariffs, which increased duties by up to 50% on all product categories, severely impacting the high-value Paint Protection Film (PPF) business. Management's strategy involves passing on a portion of the tariffs that customers can absorb and absorbing the remainder to avoid losing its strong U.S. customer base. They are also implementing cost savings, energy savings, and product portfolio enhancements to maintain EBITDA margins in the 25% +/- 3% range, contingent on tariff resolution.

    03

    Segmental Performance and Growth Drivers

    The product mix shifted in Q2 FY26, with Window Film's revenue share increasing from 42% last year to 50%, while PPF's share decreased from 31% to 25% due to tariff impacts. The Industrial Products segment contributed 25%. Non-U.S. business demonstrated strong growth of approximately 20% YoY. The architectural film business is a key growth driver, expanding 35-40% in India and 20-25% CAGR in Europe, with an estimated contribution of ₹250-300 crores this fiscal year and a target of ₹500 crores within three years.

    04

    Strategic Initiatives: TPU Line, D2C Platforms, and Global Expansion

    The company's TPU manufacturing line, crucial for backward integration in PPF, is on track for commissioning by October 2027, with 25% of its capacity dedicated to next-generation film solutions. Garware is deepening its domestic presence through two strategic platforms: Garware Home Solutions, a D2C vertical for premium architectural films, and Garware Application Studios, a direct-to-consumer network for paint protection and glazing films, aiming for over 300 studios by FY26 end. Globally, the company is diversifying its footprint across Europe, the Middle East, and South America.

    05

    Financial Strength and Capital Allocation

    Garware Hi-Tech Films maintains a strong financial foundation, remaining debt-free with a robust cash and liquid investment balance of ₹697 crores as of September 30, 2025. This strong liquidity position provides ample headroom for ongoing strategic CapEx, including the TPU line and future innovation initiatives. The company is also actively evaluating options for supply chain diversification to de-risk its manufacturing base and ensure long-term stability, while maintaining product quality and confidentiality.

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