Ladies and gentlemen, good day and welcome to Garware Hi-Tech Films Q4 and FY 2026 earnings conference call hosted by Go India Advisors. This conference call will consist of forward-looking statements about the company with respect to beliefs, opinions and expectations the company has on this conference call. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict.
As a reminder, your participant line will be in listen-only mode and there will be opportunity for you to ask questions after the presentation concludes. For any assistance during this conference call, the signals and officer web castings are listed on your system tool. Please note that this conference may be recorded. I now hand over to Ms. Garima. Thank you and over to you, ma'am.
Thank you. Good morning, everyone. I'm Garima Singla, and it's my pleasure to welcome you on behalf of Garware Hi-Tech Films Limited. Thank you for joining us today for quarter four and full year FY 2026 earnings conference call. This call is being hosted by Go India Advisors. Please note that today's discussions include certain forward-looking statements, therefore, they must be viewed in conjunction with the risk that the company faces. Today on the call, we are joined by Mr. Deepak Joshi, Director, Sales and Marketing, and Mr. Abhishek Agarwal, CFO. I now invite Mr. Deepak Joshi to present the company's business outlook and performance, after which we will open the floor for Q&A. Thank you and over to you, sir.
Thank you, Garima. Good morning, everyone, and thank you for joining us today. I hope you have had a chance to review the presentation that was shared earlier. Let me take a few moments to walk you through how the year unfolded for us. Garware Hi-Tech Films is at its heart a story of trust, resilience, and long-term relationships built over generations.
While we have grown into a global enterprise, what continues to guide us are the sum of core principles, innovation, integrity, and a customer-first approach. FY 2026 was a year that truly tested these values. The global environment remained challenging, with geopolitical volatility and elevated tariff structures across key export markets. The impact was seen in FY 2026 full year with most impact felt during the third quarter. In such a situation, our response was not reactive but measured.
We calibrated our off-take to ensure supply chain continuity and more importantly, to stand by our customers and partners. That made the difference. Despite the challenging environment, we were able to maintain our market share across key geographies, reflecting the strength of our relationship and superior quality competitiveness of our products.
As the year progressed, this steady and disciplined approach came to translate into stronger performance. We concluded the year on a strong and positive note. Q1 was the highest ever profitability quarter in our history. EBITDA at INR 157 crore, up 29% year-on-year basis, and margins extending to 26.2%. Profit after tax stood at INR 108 crore, up 39.1% year-on-year, a clear reflection of our operating leverage, improved realization and a stronger product mix.
For the full year, despite the headwinds, we delivered our highest ever revenue and profitability with revenue at INR 2,150 crore, EBITDA at INR 500 crore and PAT at INR 338 crore. This performance reinforces the resilience of our business model and our ability to navigate cycles with discipline. While navigating near-term challenges, we remained equally focused on building for the future.
We continued to strengthen our value-added product portfolio with the launch of sustainable TPU-based UV printable films, PDLC specialty films enabling privacy on demand and advanced graphic solutions. During the year, we deepened our market presence across both international and domestic markets through strategic customer additions and channel expansion initiatives. We witnessed strong traction in the U.S. and U.K. with the onboarding of several established distributors from competition, reflecting superior quality of our product and unmatched distribution network.
In India, we further expanded our domestic footprint by onboarding four large OEMs in automotive segment, along with seven plus strategic addition in our architectural business segment, supporting our continued expansion in the fast-growing B2C segment and enhancing our overall market reach. Alongside, our brand building efforts are gaining momentum with around 18 lakh annual website visits and over 8 crore impression annually across digital platforms, strengthening our customer connection.
A key part of our journey has been getting closer to our end customers. Globally, we expanded our footprint with 11 new Global Application Studios, including in the U.A.E. and the U.S. In India, our Garware Application Studio network has grown over 250 locations, and we are on track to cross 300 shortly. In parallel, we are building our strong consumer-facing platform through Garware Home Solutions with six studios already operational.
We are confident of scaling this to 50 studios by the end of FY 2027. On the manufacturing side, we have taken significant steps to prepare for the next phase of growth. During last few years, we have developed over INR 500 crore towards capacity expansion across two PPF, one sun control, one metalizer, and one TPU, and other ancillary lines entirely funded through our internal accruals, reflecting strong cash generation and disciplined capital allocation.
We announced an additional INR 191 crore investment in a new sun control film line, adding around 1,200 lakh square feet capacity, supported by advanced robotics and automation. Even after these investments, our balance sheet remains strong and debt-free, with cash reserves of INR 774 crore, giving us the flexibility to continue investing while maintaining financial prudence. Looking ahead, the upcoming TPU line expected to be commissioned by October 2026 will further strengthen our innovation capabilities.
We are also encouraged by the recognition we have received during the year, including the Plexcouncil highest exporter award and being recognized among India's top value creators by Dun & Bradstreet. As we look forward, the next phase of growth for Garware Hi-Tech Films will be driven by our high-value, innovation-led segments, including Sun Control, Paint Protection Films, Graphic Solutions, Garware Home Solutions, and TPU-based new products.
When we step back and look at the broader picture, our marketing momentum, disciplined capital allocation, expanding D2C platform, accelerating B2B growth, and continued product innovation makes us well-positioned for the next phase of growth. Thank you for your continued trust and support. I would like now to hand over to Mr. Abhishek Agarwal, our CFO, to take you through the financial performance in detail. Thank you.
Thank you, Deepak. Good morning, everyone. Let me take you through the key financial highlights for the fourth quarter and full year ended March 31st, 2026. We closed FY 2026 on a strong note, with Q4 emerging as one of our best-performing quarters. Consolidated revenue for the quarter stood at INR 597 crore, reflecting a healthy 8.9% year-over-year growth, along with a strong sequential recovery.
The EBITDA for the quarter came in at INR 157 crore, registering a robust 29% year-over-year growth, with margins expanding to 26.2%. The PBT stood at INR 142 crore, up 31% year-over-year, while PAT increased to INR 108 crore, up 39% year-over-year, reflecting the strong bottom-line expansion and improved operating efficiency. For the full year 2026, we delivered a steady performance despite a challenging external environment. Revenue stood at INR 2,120 crore, demonstrating resilience in face of tariff-related disruptions in the key export markets.
The EBITDA for the year was INR 500 crore, with margins maintained at 23.6%, reflecting our ability to sustain profitability across cycles. PBT came in at INR 446 crore, while PAT stood at INR 338 crore, with margins improving to 15%. Importantly, our balance sheet continues to remain a key strength. We continued to maintain a healthy debt-free balance sheet with cash and equivalent investments of today's INR 774 crore at the year-end. Our disciplined capital allocation and strong balance sheet give us the confidence to pursue this growth while continue to enhance stakeholder value. Thank you all. I will now hand it over to Deepak.
Over to the moderator.
Over to the moderator, please.
Thank you so much. Ladies and gentlemen, we will now begin with the question- and- answer session. Anyone who wishes to ask a question, press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star then two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question processes. First question comes from the line of Mahesh Bendre from LIC Mutual Fund . Go ahead.
Hi, good morning, sir. Thank you so much for the opportunity. Sir, one housekeeping question. For full year, what proportion of our revenues have come from the Sun Control Films, Paint Protection Films, and rest tech commercial products?
Thank you, Mahesh. Our revenues for last year were almost 50% from Sun Control Films, and both 25% from PPF and 25% from IPDs. That was like a breakup for last year.
Okay, sure. Sir, the latest expansion that the plan we updated. When this will become operational? Which year it will start coming into our sales?
This new sun control film expansion, commercial production will start by June 2027. That is Q1 FY 2028.
Okay. This will be carried in the existing plant or we will set up a new plant?
No, this is entirely a new plant at the same location, but it's a new facility. Our earlier line, it will be adjacent to that line. This line will have more features in terms of automation and robotics to take us I mean, it will be a new experience for our consumers for untouched material which we are trying to make from this new line. It will improve our efficiency, it will improve our productivity. At the same time, it will be entirely new experience for our consumers as we are growing at a very fast pace in sun control business.
This entirely will be export-focused or is it domestic also?
Our strategy, if we see, we focus on both markets. I mean, both are important, but the ratios which we expect, like growth all across the territories, though domestic market will also grow, but ultimately it will be like 25/25 or 80/20 ratio between exports and domestic market. Ratio will continue because of the overall growth which we are targeting for the company.
Sure. Sir, last question from my end. Sir, last three years, our revenue was flat almost. Same revenue what we reported in FY 2025. If we were to look at for next two years, what kind of growth we are expecting in terms of sales and given this backwards integration project is going to come off, what kind of improvement in margin we see next two years?
We expect, we have been growing at a CAGR more than 20% for last four years, except FY 2026, which has been purely because of sudden 50% tariff and which was almost there through the whole year. Around February 20th, this all went off. We didn't get enough time to recover what was done in the last year. That's the reason, because if you see nine-month performance was around 10% below our previous year FY 2025 performance. We did a great jump in Q4 by taking revenues and profitability to highest level for us.
That means, this year, we hope that such situation is not there, right? We expect minimum INR 2,500 crore revenue for FY 2027, right? We will maintain 25% ±2% growth guidance. Earlier we gave 25% ±3%. Now we are doing 25% ±2%, we expect some margin improvement when TPU line comes on stream. With the growth of the company's strategy now to direct to consumer, D2C business. That's why we have emphasized that Garware Application Studios, Global Application Studios in U.S. and Middle East and Garware Home Solutions, these three are directly to the consumer.
If you really see our strategy, D2C supported by our strong campaigns, marketing campaigns, digital campaigns, where you saw around 8 crore impressions from Meta Platforms only, and website visits which used to be 5,000, 7,000 in a month, it has gone almost close to 1.7 lakh-1.8 lakh a month. Our digital drive and the focus towards the consumer is the key focus for years to come. Direct to consumer is the right strategy.
Another one thing we are doing, we are selling direct to consumer in U.S.A. PPF this route also. All those things reflects like the key strategy is D2C supported by digital marketing. Third thing, with the innovative new products like in Home Solutions, we are doing all sun control films, but at the same time, privacy on demand, which are switchable films.
That means you can make your windows like fully opaque, semi-transparent and full transparent by click of a button. These kind of new technologies which we want to make this technology to go to every standard homes in India, and it will go to abroad. With all those strategies, our major focus is brand building and direct to consumer focus.
Sure. Thank you so much, sir.
Thank you.
Thank you. Next question come from the line of Dikshi Jain from InCred. Please go ahead.
Hello. Congratulations on great numbers. My questions were mostly regarding, first, are there any exclusive partnerships that we've done with several OEMs or brands for our PPF sales in India?
Yes, definitely. We have forged partnerships with OEMs. That means direct agreement with the OEMs. They take our material to their showrooms. We have four such strong partnerships, and two are already in discussion, and proposals are already approved. That is already there.
Okay. What are the current utilization levels at all our facilities?
Yeah. Our sun control lines are running around 75%-80%. With current expected CAGR of around 15%-20% growth there, which we are expecting for this year. By next year, we will be fully utilized. That's why we have announced this CapEx of INR 191 crore for sun control lines. PPF, we are running at the rate of around 85%-89% at current rate. That also we expect to go full, and we will use some flexibility of the new sun control line and think of future expansion if required on that. Rest, TPU line is on target. That is coming on October this year. That's the operating rate for us as of now.
Okay. Last question from my side. The anti-dumping duty that was supposed to come on the sheets and rolls that are happening from China and Korea. Any update on that?
See, that might be a question. There may be some interest or confidentiality. Good news is that they're all hearing permissions and everything happens, all visits what government officials do, that has also been done. We expect a positive news pretty soon, as fast as maybe this month or next month.
Okay. Thank you. Thank you for answering the questions.
Thank you very much.
Thank you. The next question comes from the line of Rahul Jain from Credence Wealth .
Hi, Rahul.
Can you hear me?
Yes.
First of all, congratulations to the entire team of Garware Hi-Tech and promoters also. Wonderful set of numbers and in a tough environment for the last one year.
Thank you very much.
We have been talking in the previous two calls about our focus on Middle East.
Yeah.
Just to understand, we had formed a subsidiary which was supposed to get completed in this quarter four, and we had spoken that various activities are being put in place, including on the marketing side, and also whether how this subsidiary would further be available for some future options, including exits or synergies, as well as there was a discussion about some manufacturing plans. First of all, just if you can talk about where are we in terms of sales today in Middle East, what are the various steps being taken, and where do you see Middle East sales going up the next one or two years?
Yeah. We consider Middle East, North Africa region, MENA, which is the biggest growth driver for us. As of now, let me tell you, the sale of that is roughly around $15 million. We expect that growth of around 25%-30% CAGR for the year. We are targeting $20 million-$22 million during this year. That's growth pattern. Now, how did this happen? Like we said, we have a separate team which comes from the top competition, and the entire team is based in the Middle East, and they are growing pretty fast. The subsidiary has already been completed.
The work has been completed. Now some work has gone into some kind of, I would say, manufacturing or some kind of value addition. That work is going on. The primary purpose of that, of any kind of unforeseen situation from anywhere in the world like we faced last year, we will be well-poised to cater our customers with this kind of flexibility. That was the purpose, and we are well on track for that. I've shared you the aggregated numbers and what we are doing there, and this work is in progress. When there is any further update, we'll update you on that.
Sure. Sir, with regards to this PPF that you have announced. PPF, we already have 85% and 89% utilization as what you mentioned some previous occasions.
Yes.
SCF summary around 70%-80%. Internally as a thought, you must have already decided or thought about or executed about a new PPF line. Before the new PPF line, we are going ahead and building up a new PPF line almost 30% capacity addition. Just to understand the scenario behind this, is it because demand is quite robust in terms of SCF and architecture shift towards SCF? This is why we have announced this SCF expansion rather going for a more PPF line?
See, I will tell you, the growth in SCF has been pretty rapid. Of course, PPF is also growing as very fast. See, SCF means we are a very well-known brand in India and U.S. Global is a well-known brand for automotive. You see that growth is always there despite we have hit a quite strong market penetration on that. At the same time, all architectural growth also comes from there. If you see our new initiative, which are coming from Garware Home Solutions, which is like architectural is in a big demand.
I can always say that the sky is the limit for architectural business because everywhere there is a glass, a film can be put on that glass. In architectural, it is the world because if you see the normal sun control films, safety and security films, the films which are on privacy on demand, and finally, I can say we see the products which is dual reflective or reflective.
You see, options are unlimited in architectural segment, and we just started that work two, three years back, right? We are growing pretty fast there with GHS on board and architectural other brands like we are on all airports now, railways now, and big hospitality chains are already under our contract in last one to two years. This growth we are expecting the fastest. We might grow around 25%-30% as well with the support of GHS and architectural business. That's why the need for sun control film came first.
Another thing is sun control capacity is bigger than the PPF when we put in a new line, that means. PPF lines, because of its speed and microns, it produces roughly 25 lakh square feet in a month, whereas sun control film can produce 100 lakh square feet and 125 lakh square feet ft in a month. What happens is when we put sun control plant, that means fungibility. Wherever we are sure that PPF will also go 100% utilization by next year, we can do the fungible business, which we have done in the past for PPF as well in sun control. That's the rationale behind putting a sun control line ahead of a PPF line.
I thought that it's something to do with even our one of the large customers, just from yesterday's concall, mentioned about the environment changing from demand limited to more of capacity limited. That's the statement made by one of the large customers in yesterday's concall. Maybe we are trying to do capacity somewhere, and keeping that in mind.
That growth, I think, let me tell you, our growth has been phenomenal. The large customer, because these customers buy sun control as well, PPF as well, right? Sun control is Let me tell you, I just answered the first question, like 50% of our revenues are from sun control. Anyway, sun control is our number one product. If you see the growth is also the fastest in that. Everything is linked to that, right? Building a sun control line, anybody can say anything, but it's one of the toughest challenge that people have.
Our line, I can't tell the details, but they are so advanced that people can't compete with that kind of the operations done at one go. Like they are built by our own team. There are very unique operations with all of sun control machine, which nobody has in the world. We know our sun control business is a unique model, which is growing very fast.
There's no stopping to that. PPF, of course, is growing very fast for us, and like previous participant asked about anti-dumping and similar many measures are going here, Middle East, and U.S.A., and especially direct to consumer is one of the first priority in PPF. That growth is unmatched. I didn't say that we will not put another PPF line, but we are continuously growing in sun control, in PPF, and of course, TPU. As a backward integration, we'll have more demand. That will also be decided by the company where to move fast. We are on a take-off mode on all three products.
That's the reassuring tone of the company. Last thing on architecture, you didn't mention much about our architecture. In the previous call, we had mentioned that we are about to do about INR 300 crore in FY 2026, that INR 300 crore moving to INR 400 crore in FY 2027 and INR 400 and further to INR 500 in FY 2028. Given the changes which have happened in terms of the tariff changes and also your access to Middle East, do we expect this architectural films to be higher than the number which we have given in the previous call?
It's very difficult to give each numbers ahead. What I'm saying is that we are quite confident to reach INR 2,500 crore for the coming year. Whatever we add into new products like graphic solutions, PDLCs, and printable PPF and all those things, this will be definitely on top of that, right? Whatever happens will not happen in a year's time. We are hitting the ground. That's what I said. The important thing is company's strategy for the future.
That strategy is direct to consumer, that strategy is building a stronger new product development, R&D, and a channel which remains there with the help of consumers, right? All others are definitely there. We are strong in B2B segment. We are strong with OEMs because they like the product, they like the quality, and on much bigger hospitality and other industries, including railways and airport, right?
Our ultimate goal is to penetrate everywhere, but the brand should be visible in terms of consumers. First priority is the digital penetration. I am giving you this number of INR 2,500 crore plus a growth of 20% CAGR, which we have done in last four years, barring last year. Right? That will include everything.
Thank you so much, Deepak sir. Wishing you all the best for what is going ahead. Thank you, sir.
Thank you. Thank you very much.
Ladies and gentlemen, in order to ensure that the management can clearly address call questions from the conference call, kindly request you to limit your question to a single focus point. If you have a follow-up question, please raise your hand. Our next question comes from the line of Saransh Gupta from SVAN Investments . Please go ahead.
Hello, am I audible?
Yes.
Yes, sir.
Yes, congratulations o n a very good set of numbers. I had a few questions. Firstly, I just wanted to understand how is the industry dynamics right now, with the war going on in the Middle East? How has the particularly talk about from post January and what are the ?
Yeah. See, on the war, like somebody said, I will repeat, this is not the first war, and this won't be probably the last war. The world will go like that. We as a company, if you really see, we have seen a COVID time when we really performed well, where shipping lines were not available, people were not available, but we performed, and we guided the company to new heights.
When it came to the tariff situation, before that, Russia was a big market. Then there was a conflict. Then I said, with tariff, which was the biggest headwind for us, right? Now, this Middle East thing has come. Let me tell you one thing, the good thing about Garware is that it supplies over 90 countries in the world. When U.S.A. is in trouble, Europe and Eastern Europe helps us.
When there is an issue in some other part of the world, the other part helps. In the Middle East region, whenever there is a problem, we have other areas which really perform well, because I think somehow the material reaches there, but through different routes. We have all, and we are in touch with our customers.
We are not feeling any negative impact. It's just supply chain is difficult, but ultimately, business is going as usual there. Even if there is a [inaudible] but we are poised to sail through that. In terms of our ceilings, in the past also, we have avoided Hormuz, and we have also avoided Suez Canal. It takes longer route. It is more on expenses on logistics and all. That is only a very small part of our sales.
Like I said in our previous conference calls, when things were very tough due to tariff situation, I said that the company has a motto that we will not lose a single customer, whatever it takes, because we know there will be a brighter time. We held on to that. We made our inventories to sustain in a way that whenever the opportunity comes, people can refill. The customers can refill their inventory to sail through it successfully. Same thing with all those things, we always think for future, like how we can cater that market in the best possible way. In the current situation, we see it's not as big as trouble it was last year. It is being handled very nicely, I can say.
If I'm just to follow from that, like the last conference call, you did mention that due to the tariff, our inventories are at the port, and we are just waiting for the tariff to subside so that we can release those inventories. How is the situation from the supplier end right now? At what solution we are in the inventory?
Whatever we said, actually, that held true, and that's why we did a good job in second half of February and March. We released most of the goods, I can say, required by the consumer that time. We still have goods, I can say, roughly, if you talk of the U.S. territory, around $16 million is already there, in transit plus warehousing. We are making more goods for the consumer because the demand and the season is coming, and it is one of the best seasons which we have always, Q1 and Q2. I gave you the inventory number, and it's a good demand cycle going on. That's all I can say right now.
Okay. Sir, with this, as you mentioned, six home studios will reach in this year. How big of this segment can it be if they see for at least three, four years, five years can-
Sorry, I was not able to hear. You are talking of Garware Home Solutions or Garware Global Application Studios?
Home Solutions. I am basically talking about just a high level.
Garware Home Solutions. Yeah. Like we said, we opened six in a very quick succession, around four to five are already in pipeline. Due to the time schedule, we are opening them. Right? By end of this year, target is 50. Right? To open the 50 studios in different parts of India. The concept of this is as our distributors, dealers are pretty big in size.
To cater these smaller home buyers, we are opening these studios in every neighborhood, so that the smaller ticket size job can be done. Of course, it's a higher margin job. That ultimate idea is direct to consumer strategy that fits into our D2C model, direct to consumer model, where most of the work will be done through digital mode. That means the payments and ordering and all flows will be digital mode.
That work is still into accepting, the market is really responding well, we are getting great responses from the home buyers because this is something new for them. They were never able to get these kind of small ticket supplies from us. I'm very happy when I was in Delhi and Gurgaon region, we opened there, I met many customers and they said, "This small ticket size business from Garware, which is a big brand name, this is helping us." We are using a lot of influencers to update people about these kind of new offerings, happy to share that we are getting outstanding response from the market on this.
We found the kinds of value addition which has been made. How big this segment can become in future like [SC]?
As I said, we just started, it's in initial stages, it's very digital-driven business. We expect by next financial year-end, we should cross around INR 200 crore from Garware Home Solutions plus other new products together. These all mostly would be part of Garware Home Solutions. Going forward, our aim is higher than that. At least I can say, for next financial year, FY 2028, we should cross INR 200 crore business from Garware Home Solutions, plus the added new products like PDLC and others.
Got it. That's been all that I had. Thank you so much.
Thank you.
Thank you. The next question comes on the line of Akhand Pratap Sing h from JM Financial Mutual Fund. Please go ahead.
Sir, my question is related to refund of tariff from the U.S.A. government which implemented earlier, actually. What kind of amount we are expecting?
See, this amount is definitely whatever we paid is being refunded. We are in touch with authorities also, and we have opened the account. I'm not sure. I cannot guarantee because this is a government matter. As the time it comes, then only I can confirm about that, because it's something which is accounting related matter.
Let me tell you, when from 50% tariff we did such a great job, we've only sustained what we could do in FY 2025, we managed that in FY 2026 as well. Without tariff, I think we have a big way to go and we are targeting like 25%-30% growth there. On that number, I'm avoiding because when it comes, it's like accounting. We would like to be conservative and whatever is in our hand, we are focusing on that. What is the strategy for the company?
How we can achieve? We are focusing on something which is in our hand, we will not let that go. In our hand was not to lose a single customer, which we did. This tariff, whenever it comes, that's great, and we'll have to see on the accounting standards how it is to be put into our books. Some of them we might have to give for the consumers also. Definitely there will be a positive news on that.
Okay. Second question related to this input cost rise. There is a significant increase in the raw material cost. Sir just want to know the kind of inventory gain we will be having? Are we like reporting reporting the better margins in Q1 and how we will be managing this cost increase actually?
We have very great agreements with our consumers because we are always transparent with them. During tariff time also we were very transparent with them, what should be the number, how we will update into the market. We are not the people if there is a 50% tariff we will put on our consumers and our customers and do away.
We have always been very understanding. Our customers are also understanding because the situation, we have a scientific method where we see the correlation between raw materials which is PTA and MEG versus our IPD products versus our CPD product. In all that likelihood we went to the market and discussed with them and we were able to get that kind of increase from our customers in a very healthy and ethical way.
Okay, sir. Sir in PPF business, can you tell what is the proportion which is direct to consumer and B2B?
You mean margins between D2C and the chief customers? Distributor. That's what you are asking?
Yeah. You mentioned B2B as well actually in the Yeah.
Yeah. in D2C it is usually, I can say 30%, 40% higher than the distributor margin. It depends case to case basis how do we negotiate. B2C is always better because then there are no distributors or dealers in between. You are directly handling those things. in that, the real cost comes of your digital marketing and penetration. of course, the margins are definitely 25%-30% higher than the distributor margins.
Revenue from-
Sorry to interrupt you, sir, you may please rejoin. Thank you.
This is last question. Revenue share I was looking for, sir, from D2C and B2B in the PPF business.
Let me tell you, we started this campaign maybe two years back with Garware Application Studio. Global Application Studio we started six months back only. As of now, I can estimate the D2C business is only 10% of overall our revenue. In India, I can say it's 40% as high as. Together with world market, I can say it is only 10%-15% right now. Right? It is growing very fast, and that's the future for us.
Okay, sir. Thank you, sir.
Thank you.
Thank you. Reminder to all the participants, kindly limit your question to two questions only. Next question comes from the line of Nikhil Chowdhary from Toro Wealth Managers LLP. Please go ahead.
Hi, Deepak sir. Congratulations on a fantastic 2023 environment. I have two questions. Rest of the questions have been answered. In the Q3 call, you had mentioned that we have some partnerships that are going on with the Chinese players using our Global brand. Can you please give us update on any partnerships that you have signed and what to look out for based on to these partners? In the PPF, you have mentioned about four OEMs onboarding. Is it in the retail business? Is it like a OEM like Mahindra & Mahindra that we have known for so long?
Answering the second question first. Yes, it is the same tie-up with Mahindra & Mahindra. Similar because I'm not naming name for the competitive safety for us. We have now four in our books, and another two are already, the discussions are going on. You are right on that, and that's how the growth in PPF is continuously happening in the domestic market. This is your second question. First question, yes.
The discussion is still on because, honestly, after tariff, the situation changed for us and the order flow increased so big. In Q3, of course, that was somewhere in February, we updated you on that. That discussion is still going on because some of the agreements are still being discussed because that would be a long-term partnership. We are still in discussion, and we are hopeful that will definitely help us in PPF business going forward. It's not yet concluded, but we are making sure that it goes in the right direction.
Got it. What would be the U.S. share in Q4? I guess it was not mentioned in the PPF. Middle East had mentioned in one of the answers that it is around $15 million, at least in North African region, which is around 6% of the revenues.
Yes.
What would be the U.S. share for Q4 and full year?
One second. What was U.S.? Yeah. Last year it was 45%. If you talk of FY 2025, it was 48%. Last year, because of tariff and all situation, it was 45%.
Got it. Thank you so much, and wish you all the best.
Thank you very much for encouraging words.
Thank you. The next question comes from the line of A Sriram Palaniappan from ithoughtPMS
Am I audible, sir?
Yes.
Thanks for the opportunity. My first question is on how your customer has indicated plans to move toward in-house manufacturing of PPF. How should we think about potential impact on our business over medium term? Also, what is our medium-term goal with Global Application Studios?
Yeah. That kind of announcement, actually, that has been discussed. I think there is no direct impact because we are not the only supplier for them. Whoever you are talking, I mean, there are others as well. We don't see any challenge in our volumes. At the same time, we are always working because we always want to go to the market, and that's how we are now 40% into D2C market in the domestic market and overall 10%-15% in our portfolio for PPF.
For us, we don't see any challenge on that. In fact, we are now 85%-89% of the revenue generated, 85%- 89%, and we are full with order books on that. There is no challenge which we see. Right? The second thing is our major thing is automotive, which is 50% of our revenue generator, even with a stronger strength going forward.
That is there. When you talk about Garware Application Studio that are in U.S.A. and Middle East, we have a target for both the places. Overall we should have at least 50 for next one year. That's the target which we are keeping for Garware Application Studios. When we say, they will be currently 10%-15% volumes coming from them, Garware Application Studios. We definitely would like to go 25% and then 35% as a target going forward for our business. That will increase our margins. Second thing is brand visibility will increase more.
Got it, sir. Within the SCF sales in FY 2026, do we know what is the contribution of architectural films?
Okay. Architectural, it is around 25% of total sun control sales. That is growing. I can say 25%-30% is moving towards that.
Got it, sir. Thank you.
Thank you.
Thank you. Our next question comes from the line of Riya Mehta from Aequitas. Please go ahead.
Thank you for the opportunity and congratulations on good set of numbers. Sir, the question is in terms of you were focusing that Garware will now become more of D2C brand, et c. What kind of investments are we doing with this in terms of marketing and all that trend, et c? Will our margins be lower than the B2B for some time?
Our strategy is we are not stopping B2B to grow into D2C. What is happening, we have been doing this work since last one year. Our D2C focus is increasing, we already did a great marketing campaign last year, which was part of the current performance of FY 2026, where our impressions were close to 8 crore from Meta Platforms only. Apart from that, we revamped all our websites and put a new effort so that everybody sees actually what we are doing into the market.
In Garware Home Solutions, we are directly building a channel, which is you can order online these kind of things with the app and our website. These efforts, definitely we have budgeted for this year as well. Last year, we already started spending on that. This year also, we budgeted these kind of things into our numbers already. I can say there is a slight increase in our marketing budget. Definitely D2C is going to be 25%-30% higher margin than B2C, even for this year.
The volumes for this year is not that great. I think the next year it will be even bigger. These numbers will not change, like more spending on branding, because we have done that as a mix of our business strategy, where OEM we are growing. These hospitality industry, all big hotel chains are doing great with us. The airport authority, railways, and all those things are helping us to grow on all around. That's the strategy for us.
Got it. In terms of the current results, what will be the currency appreciation on the entire general impact?
Sorry?
Dollar appreciation actual dollar appreciation, I would have to repeat the question to figure out.
On the currency, we definitely get advantage. I want to know on that. Our raw materials like chips, like the raw materials, PTA and MEG, plus some of the chemicals and raw materials, they are either imported directly or on import parity basis. I can say 45%-50% impact is definitely covered with that. For the balance, definitely we get an advantage of that. Exact number, Abhishek, can we give? Do we have some kind of this thing on that? I'm just asking our CFO on that. As I said, 50% is naturally helped because our imports or import parity business is there. Balance, definitely we get advantage of it.
Got it.
Sorry. Please go ahead.
Raw material availability and the pricing currently, are we able to pass on the entire incremental raw material price hike? This is for both the traditional business of films as well as PPF and SCF. There are maybe two questions, availability and ability to pass on the price hike.
Yes. I can tell you that we have been able to pass maximum of it because industrial product business is normally the consumers are directly affected, so we do that. That is already passed on. Consumer, it takes time, but with the help of inventory, like everybody knows, it's no secret, the kind of inventory we get appreciation, and by the time price increase comes, we are good with that. I can say no negative impact of that. In fact, slight positive impact might be there because of that.
Got it. My last question would be that with the current interest rate going up and inflation also kicking up in various geographies where you cater to, do you see any impact on demand anywhere? Or do you see people holding down because this is not a simple cost and more of a discretionary spend?
Sorry. Can you repeat the question, please?
With the current inflationary scenario and interest rates also hiking, do you see any impact on demand, or do you see any kind of slowdown coming in from any places? It's a discretionary spend after all.
I think the kind of segment we are in, it's not a commodity where people do. You are talking about global warming and this situation?
No, I'm talking about inflation and interest rates-
Okay.
...the current demand.
Honestly, whatever is happening is happening in the peak season. That's the summer for us. In that, demand really remains high for us in India for three months, four months, and in the world, it is yet to come. People have started building their thing. We are not seeing that kind of impact. This might be more can be visible during weak season of Q3. Fortunately for us, all those thing is happening into this peak season, we are not seeing the impact as of now.
Okay.
The demand is pretty high in this season. In fact, unfortunately, wherever there is a more buildings coming up, I can't refer directly, but if you really see, there is lot of new construction is going on everywhere including Middle East. That's a good opportunity for the company. That's why we are focusing more into Middle East.
Got it.
I'm so sorry to interrupt you, Riya, you might briefly recheck that queue.
I can get that again.
Next question comes from the line of Nilesh Jain from Astute Investment Management Private Limited .
Hi, thank you for the opportunity. My question was on the TPU line, which is going to come up in October. Broadly, I wanted to understand, largely this is given a battery business. Have you identified any other product for the 25% that you mentioned we'll be using apart from the PPF?
Your question is for the TPU business, right? Like we said, it will be used 100% in the PPF for the margin improvement. We have built a new team, R&D team, which is working on some products, and we have identified already two products where we will start our first foray into from the TPU business. One is the automotive product and one is the architectural product. With these two products, we definitely will start our sales, because it's starting in the Q3 of this year.
In three, four months, I think there will be a very minimal revenue, but we'll set targets for the next year. These two products definitely we are eyeing on from the start of the TPU business. If that goes successful, then it will be a big potential. Let me tell you about one of the products is being used widely in U.S.A. and Europe market and not touched by anybody in India. That can be a good product for us in architectural segment from TPU.
Okay. Thank you. Given you mentioned you're adding capacity on SCF side, from what I understand, given your current utilization is 80%, and it will be fully utilized for this year, and the initial capacity is going to come in next year.
Yeah.
Currently close to at 20% capacity. Don't you feel there's a constraint on capacity to grow? You might need to add SCF line as well.
Yeah.
Even that is also operating at 90%.
Like I gave you the example that the major growth drivers are both PPF and Sun Control, but D2C business from Garware Home Solutions is growing very fast, and the line size of the lamination line is much bigger than the PPF. We can use the fungibility for PPF at first, definitely, because it will also be full. We will think of how the growth is going. We are conservative in that, but we know the right capital allocation.
The decision was between PPF and window films, and we have taken the decision of window films lamination line because the size is much bigger. It's four times production comes as compared to PPF because of the pre-cuts and all those things. We'll use that fungibility to make more PPF. Here, the growth of D2C business, GHS, and architectural, which is growing very fast, will be catered directly from Sun Control line. That's the rationale behind to take this line.
In this last slide.
I'm sorry to interrupt you, Mr. Jain. Please wait until for more questions. Thank you.
This last slide, I just want to clarify the question.
Yes, go ahead.
What would be the standard tariff which we would be seeing right now?
Total tariff? I'll explain you. The original tariff before base administration came was 6.26%. That was a standard till last year when it went added 10%, then added 25%, then added 50%. We'll talk of additional tariffs, which is only 10% now as compared to 50% last year.
Okay.
6.26% was always there.
Okay.
50% was on top of that. Now only 10% on top of this.
Okay. Thank you so much, and all the best.
Thank you.
Thank you. Our next question comes from the line of Sunil Jain from Nirmal Bang Securities Private Limited. Yes, go ahead.
Yeah. Congratulations on good numbers and thanks for this opportunity. Sir, this question relates to whatever sales you are doing in your own brand. Sir, you are able to pass it on the whole price increase or whole cost increase because of all these raw material price increases. B2B, you may have some agreement, but B2C, is that at a stretch or it will take some time?
No, actually, honestly, we are able to pass that on because if you really see this, when we talk of our industrial product business, there is almost a big correlation, I can say 45%-50% directly into these raw materials, which is because of the crude oil building and all those things. There, the market reacts pretty quickly, and we were able to do that. That was number one. Number two, when we talk of our consumer products and PPF business. PPF business is really driven by TPU and adhesives and all those things.
There, the increase was not that big because they are not directly linked to crude. There, the increase was minimal, but still, we were able to take our price increase there. Now, the third sector is Sun Control business, which is based on polyester. There, the impact of overall whatever, if INR 100 is increased, is only INR 10 on the polyester film, because rest of the components are high-value addition on coatings, on adhesives, on nano dispersion and all those things. There we have seen that correlation going to between, I can say, approximately 10%, 12% or 15% even. There calibratedly, we were able to take the price increase on a different situation from different customers.
Out of total sales, how much we are selling in our own brands, Garware and Global?
If we see, roughly 55% goes into own Garware brands, Garware or Global, I mean, our brands, and roughly 40%-45% goes into the private labels. That may be direct private labels or neutral labels.
Okay. Sir, last question related to the big quarter. Last year Q1 was impacted because of the seasonal rain and also [inaudible] which came up in the U.S. Generally, you said that the Q1 is a strong seasonal quarter. If you see last year, there was a substantial decline from Q4 to Q1. Generally, Q1 is softer than Q4 or it's equal or better than Q4?
Sir, you answered your question. We say Q1 is the strongest because of the seasonal. Our major market is export, for exports, it's like June, July, August, September. These are the strongest season in U.S. and Europe. In such situation, I can say April, May, that is Q1, is the right time for the ordering from us. That's why it is always a strong season. In India, this is up to June is the strong season because of heat comes that season and then rain comes.
Last year, the situation, this did not happen. There were two things. One, domestic market, the rain started coming in the month of April end also and beginning of May. It never stopped. It continued till the monsoon last year. Also the tariff situation made it very uncertain in U.S. for the ordering and everything. This year we don't see that challenge. You answered your question, sir, on your own.
That was the answer.
I'm sorry to interrupt you. You may please raise your hand. Sir, please limit question.
Yeah.
Thank you. Reminder to all participants, please limit your question to one question only. Thank you. Our next question comes from the line of Swechha Jain from ANS Wealth . Yes, go ahead.
Hi, sir. Thanks for giving this opportunity and congrats on the great set of numbers. My first question is on the SCF, the new CapEx. How much of this would be for the automated part and how much of this would be for the Home Solutions, the sales that you're expecting on this CapEx? What would be the active turnover from it, sir?
Okay. On the new CapEx, see, Garware, let me tell you, overall, this addition is roughly 30% of capacity addition, right?
Right.
If we see, GHS we don't see from this plant how much it will go into which product line. I'll be very honest with you. We put the line based on what sale increase we are seeing. That is, what is the CAGR where we are going to grow, and where I should meet this capacity. Based on that, current 75%-80% will almost finish by Q2 of next year. That's what the estimate is. Of course, we can do some debottlenecking on the old plants, and we will not lose any sales because of that. That's the reason to put a new plant. Now, GHS we have a separate target where we are talking, because volume won't be great, like imagine a home.
I give you some numbers, like if you really see, our distributors or dealers are the second guy. Distributor buys five, seven lakh square feet in a month, and a dealer buys maybe 50,000 sq ft or 1 lakh square feet. The home buyer needs 50 sq ft or 70 sq ft. That demand, we can figure the idea to do that, to reach every home, is to make that even if that business goes to 20 lakh square feet, which is not even 7%-8% of our business, but we will be catering a big part of the country, and the revenue generation can happen anywhere between INR 50 crore for one year and the next year, around INR 200 crore with all the PDLCs and everything.
That is the idea, that to make the brand present everywhere and at the same time increase the sales from different channels, right? If you really see the company, when we were doing only IPD and CPD in sun control, sun control and IPD, our revenues used to be INR 750 crore, INR 800 crore. We strategically increased the CPD business towards architectural business.
We went to INR 1,300 crore, right? We added this PPF business, and along with the growth in architectural and normal sun control business, we reached a level of INR 1,600 crore in FY 2024. With the growth in these two new lines coming and everything, we reached INR 2,100 crore last year. The idea is our products, when we increase the product basket, it helps us because when we were not doing PPF, many customers were not coming only for sun control because it's a basket order.
We are doing sun control for automotive, we are doing sun control for architectural, we are doing sun control for safety, security, decoration, and dual reflection. We are talking of now architectural in the Home Solutions. We are adding TPU for architectural and automotive. We are continuously increasing our segment. Each segment, even if it adds INR 100 crore- INR 200 crore value, that will drive our next growth up to INR 2,500 crore, INR 3,000 crore in this year and next year. That's where we are moving.
Right. Sir, just to follow up. When you say architectural, help me understand on the architectural side, what is the addressable market for us? I'm so sure we have chalked out an internal plan for us, like what is the most attractive for us in the architectural, what geography looks most attractive for us, and help me understand, I know it's a very basic question that I'm asking. Home Solutions I understand is a sub-set to architectural, right?
Yes.
What is the strategy like, which geography, which product, what is the revenue potential, and what kind of margins if we have internally chalked out for us for next three years? If you could help me understand that, sir.
See, that will be. I'll answer the question in a strategic way, because if I give numbers, margins, everything, people who are just buying on these things will definitely-
I understand.
...as everybody works with a strategy, right? We have a strategy in place. To answer your question, I'll give you in a broad level, like there is a big market potential in U.S. where we have made a team from one of the number one competition in U.S. Second biggest market or I can say fastest growing market, even more than U.S., is the Middle East. If you see, it's ideal market for sun control business because there is a lot of sun and there is no rain, and there is hardly any winter.
Right.
The maximum development is happening. That's why two years back, we took a call. We made a strong team there, and the team now working. I can say that proudly that one of the segment of Dubai Mall is also done by us. That's the quality of our product, but it was missing the kind of the team which goes, which has got relation, which has got that kind of drive. We have done that. Now with that substitutes there, which is directly working with all, because if we are there, we can directly add value to our sales team there. They can definitely take advantage of our local things, right?
Right
That market is now you can see the growth of-- we see Middle East and North Africa region is like something a big target for us. Coming back to India again, we made a team which was no focus on automotive. It's fully dedicated for architectural business. Architectural business, we already did railways, airports, all airports, railways, and then Best hospitality chains are working with us, and also some OEs who would redesign your entire home, bathrooms and everything. They have directly tied up with us.
Next thing is how to cater to the smaller guys and make a brand, right? If you go to B2B, they will test your product, they will say, "Forget about it. I will make my brand. Your product is outstanding." How do I grow the business of Garware or Global to the end consumer? That's where the Garware Home Solutions and Garware and Global Application Studios come into picture, right? The product is great, the game is also great.
There the margin will be, I can say, 30%-40% higher than distributor level, and branding will be there. At the same time, there the strategy works that there is a separate team. The question is, you are talking of the TAM, right? The TAM in this is I mean, we have our targets, we know what it is. But to tell you, there is like we already catering to the big segment there, and fighting with one of the cheap imports coming from China and Korea, and at the same time, products imported from U.S.A. Again, put together it's like, I will say, tip of the iceberg.
People do not know what a architectural product can do for homes and buildings, right? Even the owners of many hospitality chains, they were not aware. When I explained them, their eyes were like, "Oh, really? That's the thing?" Again, we go to the basics like we did in PPF. When we entered into PPF market, nobody was even aware what a PPF is.
We made that so popular in India, more than 50 participants are there importing product or buying from us and selling it. Same way we are doing into this architectural business via Garware Home Solutions, and we will have the same strategy, guiding people, making those displays, going to hubs, big buildings, and speaking to the teams, making them explain. This will get done all over India and in the Middle East. That's the strategy for us.
In your largest Sun Control, there are more-
I'm sorry to interrupt you, ma'am. Please continue.
Yes, that is not only Sun Control. There will be surface protection films which is for your furniture, with your kitchen sink and everything. Other than Sun Control, then safety security films, there will be a suitable film on demand that is called a privacy on demand. You can do like make it opaque, transparent, semi-transparent, so many lots of products are coming into that segment.
Okay. Can I just squeeze in one very small question? I want to pass in last call also if you allow me.
Yes, please go ahead.
Okay. We were doing something with Vande Bharat. I just want to get an update on that. Are we doing something for Vande Bharat?
We did during Kumbh Mela last year. We did a full train.
Okay.
You know we are doing. Thank you.
Okay. Thank you.
Thank you. Next question comes from the line of Ankit Gupta from Bamboo Capital. Please go ahead.
Thanks for the opportunity and congratulations for a set of numbers, especially for the entire year. We are doing phenomenally well. Sir, my first question is on the impact of declining-
Sorry to interrupt you. Can you be a little loud? Your voice is-
Little louder, please. Yes.
Sure. Sir, my first question is on the declining U.S. automotive sales. If you look at last quarter and even in the month of April, we are seeing 5%-6% decline in the new U.S. automotive sales. What can be the impact on our automotive SCF sales as well as on the PPF sales? Because our majority of the business on the SCF as well as on the PPF comes from U.S. If you can elaborate on that and how it can impact us.
I think it is quite understandable. When the tariff was at its peak, we were able to not lose the customer. At the same time, the sales were little affected because we were not able to do it freely with 50% of the tariff, right? Going forward, we don't see any such challenge this year. In fact, we see a growth, good growth potential coming from U.S. market now. Because the real challenge has gone from the market.
Sure. Sir, on the PPF side, we have seen a bit of decline in this financial year, and our biggest customer on the PPF is also setting up its own manufacturing plant. How do you see our relationship with them evolving? It's a large part of our PPF sales, so our sales will be impacted when their manufacturing plant comes online?
No. As I said, I think there is a lot of confusion on that, right? PPF, they buy from other sources as well, and we got it manufactured. Similar exercise they might be doing in future. I'm aware of everything which I can't say here. At the same time, I don't see any impact on our business because our growth has been phenomenal.
Our Global and Garware brand, we have doubled what we were doing last year, and we expect that to grow in a steep style of thing in the coming years. We are not bothered with that, right? Because their volumes, we were not supplying 100% to them because they had couple of more suppliers as well. I know some of this thing looks like that we are the only supplier or we are too much dependent on them, on PPF. That is not the case.
Our relationship with them will continue?
Oh, definitely.
Even when-
No, definitely. We are a big into social role and other business. See, it's not easy to change the product because our product has got a very unique properties in terms of Sun Control. Let me tell you with, I mean I can tell you with great pride that the product line is very different from our other supply. It was based on nano dispersion facility and our adhesive technology is very unique and very different, and it cannot be changed.
Even if a brand wants to go for manufacturing and replace it's not possible because it is something like a prevailing product, and we have discussed that, and we are continuing with our relation. That's what we are growth plan for the future. Of course, we have our plans, and we continue to be in great relationship with each other.
Sure. Thank you, Deepak.
Thank you.
Thank you. The next question comes from the line of Vinay Nadkarni from Hathway Investments Private Limited .
Yeah. This is really good set of numbers in spite of a very tough year. Just a bit one question, Deepak. That is, how do you see your April volume growth, given this summer seems to be better than last year?
See, I think that's a question related to current performance I would like to avoid. I can only say that we have already given guidelines for the year, INR 2,500 crore. We will retain that because we cannot answer because this is a bit ongoing. It will be beyond the scope of us talking about this right now.
Fine. I understand that. The other question was, when I look at your U.S. volumes, you had said around 45% of your business came from U.S., and last year you had said that you had to absorb most of the impact because you couldn't pass on and you didn't want to penalize your customers. In spite of that, you have maintained your margins. I just wanted to understand how that we achieved, [inaudible] of your business taking higher hit on margins?
Yeah. I think we discussed that even each quarter when despite 50% volume coming from there with 50% tariff, we still maintained because we grew on other geographies quite handsomely. At the same time, we restricted our sales for just to continue without losing customers. That means we held our product in certain special conditions.
Then when it was available, the tariff went low. At that time, we cleared the goods according to the demand from the customer. It was like a very strategically and agile maintained the supply chain where we did not flush the material at the highest tariff. We tried to hold and liquidated it through at the right time. In fact, when this tariff was to come, we made more material and kept there to avoid tariffs.
I mean, it was like prior to when we knew it is going to happen, we built up our inventory there. At the same time, we liquidated when it was utmost necessary to be done at that time. When it went towards the low tariff and we cleared the goods. This is like a strategy which we followed, which worked for us.
Yeah. I think that was a sensible strategy. Thanks a lot for your answer, and all the best for the current year.
Thank you. Thank you very much.
Thank you so much. Ladies and gentlemen, due to time constraint, this is the last question for today. I now hand over to the management for closing remarks. Over to you, team.
Thank you. I would like to, on behalf of Garware Hi-Tech Films Limited management, I would like to thank all participants, and we hope, I mean, we were able to answer all of your queries. In case of any further explanation required, you can reach out to our IR team. With this, thank you very much, and I wish a great year ahead for everyone. Thank you.
Thank you, sir. Ladies and gentlemen, on behalf of Garware Hi-Tech Films Limited and its management, thank you for joining us, and we now disconnect the lines.