Garware Hi-Tech Films Limited

Garware Hi-Tech Films reported a challenging Q3 FY26, with consolidated revenue declining 1.6% year-on-year to INR459 crores, primarily due to the full impact of a 50% tariff structure. EBITDA also saw a 7.4% year-on-year decline to INR86.7 crores, resulting in an EBITDA margin of 18.9%, down 118 bps. Despite these pressures, the company managed to maintain healthy margins through operational efficiencies and a focus on high-end product mix. For the nine months ended December 31, 2025, revenue was marginally lower by 2.4% at INR1,523 crores, and EBITDA was down 8.3% at INR343 crores.

The company is actively pursuing strategic expansion to mitigate geopolitical risks and diversify its market presence. A wholly-owned subsidiary has been announced in the UAE to manage trading and exports across the MENA region and other international markets, leveraging the region's growth potential and favorable duty structures. Furthermore, Garware is expanding its direct-to-consumer (D2C) channels, with 250 Garware Application Studios already operational and a target to reach over 300 by the end of FY26. A new D2C vertical, Garware Home Solutions, has also been launched in India, starting with a studio in Mumbai, to cater to unmet consumer demand in architectural films.

Garware successfully doubled its paint protection film (PPF) capacity to 600 LSF in September 2025, with the new line currently running at 65% utilization. An upcoming TPU manufacturing line, scheduled for commissioning by October 2026, will further strengthen backward integration and innovation, with 25% of its capacity earmarked for new generation products. The company's product mix strategy, focusing on high-end products like IR-blocking films, has been instrumental in maintaining margins, especially during seasonally soft quarters like Q3.

The architectural films business has shown significant growth, increasing its contribution to total Consumer Products Division (CPD) sales from 10% last year to 22-23% currently. The company aims to further increase this to 30% and targets architectural revenue of INR400 crores by next financial year, with an ambition to reach INR1,000 crores by FY30. This growth is supported by a comprehensive product range, competitive pricing due to backward integration, and a dedicated sales team, attracting distributors in key markets like the Middle East, US, and India.

Garware Hi-Tech Films maintains a strong financial foundation, remaining debt-free with a robust cash and liquid investment balance of INR669 crores as of December 31, 2025. Management expects EBITDA margins to improve to around 20% in Q4 and Q1, with a long-term goal of returning to 25% plus/minus 2%. The company projects a turnover of over INR2,100 crores for FY26 and anticipates a 15-20% CAGR revenue growth for FY27, driven by strategic initiatives and potential positive developments in trade policies.