Ashish Kacholia portfolio stocks: Shares of Garware Hi-Tech Films (GHFL) were locked in the 20-per cent upper circuit at Rs 2,895.10, also their record high, on the BSE on Thursday at 02:46 PM. The sprint comes after the company reported a solid 102.2 per cent year-on-year (Y-o-Y) jump in the profit after tax (PAT) of Rs 88.40 crore in the June 2024 quarter (Q1FY25) on account of a better product mix and better realisation of the specialty products. In comparison, the BSE Sensex was down 0.45 per cent at 79,108.
The company, a global manufacturer of solar control films (SCF), paint protection films (PPF) and other specialty polyester films, had posted a profit of Rs 43.7 crore in Q1FY24.
Revenue increased by 25 per cent Y-o-Y to Rs 474.50 crore, supported by continued growth momentum in SCF and PPF businesses. Earnings before interest, taxes, depreciation, and amortisation (Ebitda) witnessed a commendable growth of 78.7 per cent Y-o-Y and 44.9 per cent sequentially at Rs 130 crore, owing to better performance from the Specialty segments. Margins improved to 27.4 per cent in Q1FY25 from 19.2 per cent in Q1FY24 and 20.1 per cent in Q4FY24.
In the past one year, the market price of GHFL has zoomed 193 per cent as compared to 20 per cent rise in the BSE Sensex. Ace investor Ashish Kacholia held 670,879 equity shares, or 2.89 per cent stake in the company, at the end of the June quarter. Kacholia held 3.42 per cent (794,000 shares) at the end of the March quarter, shareholding pattern data shows.
GHFL is engaged in manufacturing polyester films, which are used in a variety of end-applications such as window tint application, automobile paint protection films, packaging, electrical and motor and cable insulations, shrink film for label application, and architectural film among others.
GHFL has been a leading exporter of polyester films and holds patented technology for manufacturing UV-stabilised dyed films. These products are sold under the brand name ‘Sun Control Films’ and ‘Global Window Films’ in the domestic and export markets. Key applications include automobiles, FMCG, and commercial/residential buildings.
According to the management, GHFL has a market share of 8 per cent-10 per cent globally for sun-control films. GHFL generated 77.6 per cent revenue from export sales in FY24, higher than 67.1 per cent in FY23, as the company focused on exploring new markets. North America is the biggest market, with 46.4 per cent revenue being generated there.
The company is also developing a niche market in India for its SCF and PPF products. The company is currently targeting the B2C model by setting up Garware Application Studios (GAS) in Tier-1 and Tier-2 cities and is associated with more than 126 channel partners and over 650 OEM dealerships in India.
The Industrial Product Division (IPD) segment, which recorded muted performance in FY24 due to oversupply, is expected to improve as price recovery has started in the segment and margins are expected to improve going forward, according to CARE Ratings.
GHFL has repaid all its term loans in FY24, which has resulted in the company becoming debt free with debt remaining in the form of lease liability only. Debt coverage indicators such as TD/GCA and interest coverage improved to 0.08x and 25.23x (PY: 0.82x & 14.76x), respectively in FY24. Debt metrics is expected to improve further going forward as the company is earning stable profits and it has no plans for debt funded capex, the rating agency said in rationale.
First Published: Aug 08 2024 | 3:51 PM IST
