Ladies and gentlemen, good day and welcome to the Garware Hi-Tech Films Q2 and H1 FY 2026 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on a touch-tone phone. Please note this conference is being recorded. I now hand the conference over to Ms. Garima Singla. Thank you, and over to you, ma'am.
Thank you. Good morning, everyone. I am Garima Singla, it is my pleasure to welcome you on behalf of Garware Hi-Tech Films Limited. Thank you for joining us today for quarter two and first half of financial year 2026 earnings conference call. This call is being hosted by Go India Advisors. Please note that today's discussion may include certain forward-looking statements, they must be viewed in conjunction with the risks that the company faces. Today on the call, we are joined by Mr. M. S. Adsul, Director Technical, Mr. Deepak Joshi, Director of Sales and Marketing, Mr. Abhishek Agarwal, the 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, good morning, everyone. It gives me a great pride to speak about the company that has truly stood the test of time. A fundamentally strong organization built over 90 years of innovation, integrity and resilience. Garware Hi-Tech Films Limited has consistently evolved with changing times, adapting to new technologies and global shifts while staying true to its core values of quality, trust, and excellence. These pillars have enabled GHFL to not only withstand market cycles, but to emerge stronger with every challenge. The second quarter of FY 2026 once again validated the resilience and depth of our business model. The quarter unfolded amid persistent geopolitical volatility and successive tariff action by the U.S. government, which posed significant challenge for the business.
Despite these external headwinds, GHFL not only absorbed the impact of these challenges, but continued to create a long-term value for its shareholders, a true reflection of our agility, discipline, and enduring competitive strength. During the quarter, we navigated through the impact of the revised U.S. tariff structure, which increased duties by up to 50% on all product categories. GHFL reported a 15% sequential growth in revenue quarter-on-quarter basis, limited the year-on-year decline marginally to 8.2%, a clear reflection of our operational agility, strong market positioning, and enduring customer trust across global markets. Our EBITDA stood at INR 133 crore, lower by 11.4% year-on-year due to tariff related impact. Our EBITDA margins remained healthy at 23.4%, underscoring our disciplined expense management, proactive cost optimization, and unwavering focus on operational excellence.
Exports continued to be the cornerstone of our growth, contributing 77% of total revenues this quarter. Our Sun Control Films segment witnessed strong demand momentum, while the architectural film business continued its rapid expansion in the U.S., Middle East, and Indian markets, supported by focused marketing initiatives and the launch of premium products. A key milestone during the quarter was the doubling of our Paint Protection Film capacity to 600 LSF. This expansion removes the earlier fungibility loss with SCF lines, thereby enhancing manufacturing efficiency and unlocking additional capacity for future growth. Looking ahead, our TPU manufacturing line, which is primarily backward integration for PPF on track for commissioning by October 2026. 25% of capacity is dedicated to next generation film solutions. We are also deepening our domestic and direct-to-customer presence through our two strategic platforms, Garware Home Solutions and Garware Application Studios.
The launch of Garware Home Solutions marks a significant strategic leap forward, a high margin D2C vertical aimed at capturing the growing demand for premium architectural films in India. This initiative enables GHFL to directly engage with end consumers and premium real estate developers, thereby enhancing our brand visibility, customer reach, and margin profile. In parallel, our Garware Application Studios, this network, a direct-to-customer platform for a premium Paint Protection and glazing film, continues to expand at a robust pace.
We are well on track to cross 300+ studios by the end of FY 2026, strengthening our presence up to tier three cities and building a strong ecosystem that connects with innovation, service, and brand experience directly with the consumers. On the global front, we are diversifying. We continue to penetrate deeper into key export markets, expanding our footprint across Europe, the Middle East, and South America.
These regions hold immense potential, and our premium product portfolio, backed by strong consumer partnerships, positions us well to capture incremental market share and build long-term growth avenues. GHFL continues to innovate. Innovation is true in our DNA while continuously improving operational efficiency and expanding its leadership across product segments. Our multi-segment presence, spanning automotive, architectural, industrial, and specialty films, provides a natural hedge against sectoral cyclability and enhances earning stability.
Looking ahead, our strategic priorities remain very clear: strengthening backward integration, accelerating innovation, expanding global reach, enhancing our B2C presence, and deepening domestic market penetration. These initiatives are well-designed to deliver sustainable and profitable growth, even in the challenging market conditions, while creating long-term value for our shareholders. Thank you very much. I now hand it over to Mr. Abhishek Agarwal, CFO, who will be discussing the financial highlights.
Thank you, Deepak, and good morning to everybody. Let me take you through the key financial highlights for the quarter and half year ended September 30th, 2025. For Q2 of FY 2026, our consolidated revenue stood at INR 569.7 crores compared to INR 620.6 crores in Q2 of FY 2025, reflecting an 8.2% year-on-year decline. This was primarily due to the base effect and the tariff-led disruption. On a quarter-on-quarter basis, revenue grew by 15% over Q1 of FY 2026, traditionally one of our stronger performing quarters backed by steady demand in our core products. EBITDA stood at INR 133.3 crores compared to INR 150.5 crores in Q2 of FY 2025, representing an 11.4% year-on-year decline, while improving by 8.4% quarter-on-quarter. The EBITDA margin stood at 23.4%, driven by cost optimization initiatives and a favorable product mix.
PBT came in at INR 120.4 crores, down by 12.8% year-on-year, sequentially up by 9.1%. PAT for the quarter was INR 91.2 crore compared to INR 104.3 crore in Q2 of FY 2025 and INR 83 crore in FY 2026, an increase of 10% quarter-on-quarter, indicating improving profitability. On a half-yearly basis, the half year FY 2026 revenue stood at INR 1,065 crore, marginally lower by 2.8% year-on-year, while the EBITDA was INR 256.3 crore, down by 8.6% year-on-year. On the balance sheet front, GHFL remains debt-free with a robust cash and liquid investment balance of INR 697 crore as of September 30th, 2025.
This strong liquidity position provides ample headroom for our ongoing strategic CapEx, including the TPU line, as well as future innovation and expansion initiatives. Despite short-term headwinds, GHFL continues to maintain a strong financial foundation and steady operating cash flow generation. With new capacity additions, continued focus on value-added products, and improved manufacturing efficiency, we expect to gradually enhance our revenue visibility and profitability in the coming quarters. Thank you all, I'll now hand it over to the moderator.
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mahesh from LIC Mutual Fund. Please go ahead.
Hi. Thank you so much, sir. Terrific numbers despite of the very adverse macro environment. I just want to understand how we are managing tariff issue now. What is the arrangement as of now with the U.S. customers?
Yeah, thank you for your kind words on the performance. On tariff situation, we are managing in a way like whatever our customers can absorb, because they have to sell it to the end consumers in U.S. market. Whatever the number we are able to agree to pass it on with them, we are doing that and balance we are absorbing. Having said that, like we explained in the last quarter conference call, that the aim is not to lose any customer because we have a very strong customer base in the U.S. market.
We will continue to support them with whatever it takes for us. With the current situation where we are passing on some of the tariff to our customers and the balance we are absorbing, but ultimate aim, not to lose a single customer in the market, which has been built over 25 years of hard work in U.S. market.
Sir, various media reports are talking about there is a possibility of a deal between India and USA. If the tariffs, which is now in excess of 50% now, if it comes down to around 20%, assuming 20%, will there be impact on our margins?
Yeah. See, 20%, whatever incremental tariff comes from as compared to last year or prior to March, will have an impact on the margins. But the company has taken lot of initiatives where cost savings, energy savings, and the portfolio enhancement of various products. We will ensure that we maintain the margins of 25% ± 3%. That is the target guideline that has been given for the EBITDA margins.
Sir, last question from my end. What has been the growth in terms of non-U.S. business, be it domestic or non-U.S. international business?
Yeah, that growth has been quite strong. Other than U.S. market, it has grown roughly around 30% as compared to last year.
Sure. Thank you so much, sir.
Thank you.
Thank you. The next question is from the line of Viraj Parekh from Carnelian Asset Management. Please go ahead.
Good morning, sir. Congratulations on your results. I have a follow-up question from the previous participants. You said the non-U.S. business has grown around 20%. If I'm right, approximately 50% of our annual business last year, what we've done is coming from U.S. We cited two things for the de-growth. One is the high tariff, second is the high base. Could you just quantify how much was the high base effect in September 2024? Because given the quarterly trend, it seems like an abnormally high year. If you can understand what was the revenue, SCF, PPF, and what was the percentage terms?
See, high base, we have said because that last year, Q2 has been the highest ever for us in terms of revenue and bottom line. This year has been the second highest performance for us. Now, the high base is a fact because that was there last year, but the major impact has come from tariff only, because if you really see, from April onwards, we were facing 10% higher tariff, then another 15% was added, and then lastly it was another 25% to make it 50% additional. In Q1 also, we had little impact, Q1, we have quite a big impact.
This impact primarily comes from the tariff because as you understand, especially in the PPF business where the product value is quite high as compared to Sun Control in terms of absolute sales price. 50% impact on PPF has been very tough for us in the U.S. market. Window film business has grown by, if you compare with last year same quarter, we had around 42% revenue share from window film, which has gone to 50% this year. There is a big jump into window film. Whereas PPF, last year, the revenue was 31% from PPF. It has slightly gone down to 25%. It is up as compared to last financial year. It was 20% for PPF. I would say this was a good quarter for us, but at the same time, the real negative impact has come from the tariff situation.
Given we have our second line of PPF operational, I believe we were working at peak capacity for both our lines in the previous quarters. Do we see that with this line coming in, H2 will help us grow an annual guidance of 20%+ on the last year's base of INR 2,100 crore?
Yeah, definitely. I would say we were making the PPF before this new line into a fungible capacity of Sun Control, which now possible that we will make all PPF into PPF factory only. There are now two lines. This will give us an operational advantage compared to previous year. Definitely, the natural growth of around 20% would be there in PPF business.
Just last question before I get in queue. Based on last year's base, how much are you expecting our U.S. business to grow this year?
You mean this year's revenue guidelines you are talking?
Yeah, only for U.S.
Yeah. No, U.S., I think in terms of revenues, we will do same or slightly better than last year. The challenge is these tariffs. We are hearing quite good, I would say, good feeders from U.S. market, including the quotes and the tariff deal between India and USA. If all that happens within this month or by December, I think we should be able to maintain the volume or I would say, growth over the last year.
The last follow-up just on this question. Are we seeing that customers are deferring their orders because of the tariff? What's the situation on ground there? If you could help us understand, because if you're saying this tariff would be by December, once the clarity comes, post that will we see order coming in?
We are getting regular orders like we used to get. Like I said, our team, including I also personally met all the big customers there and assured that we will help in terms of mitigating the impact. That means we are absorbing the maximum portion of this tariff because as I said, as a policy, it has been a long work of creating this customer base. Whatever was comfortable, we have passed on, balance we are absorbing. We are getting orders what we normally get and in fact, some higher orders also. We are keeping them ready, keeping our inventory, but it will not show it to the sales unless it is absolutely necessary. In that way, I can say our customers and distributors are reducing the inventory, which used to be up to three months in some cases.
They are going down up to 1.5 months, so that they do not lose the customer, but they take best advantage of the situation where if any deal happens, we will not have to bear that 50%, rather it can be 15%, 20%, whatever the final number comes. We are managing in a way not keeping the supply chain empty. We are keeping it full, but only clearing goods when it is absolutely necessary by our customers. That's how we were able to maintain in Q2 a strong quarter and trying to do the same thing in Q3. If any deal happens, it will be pretty good and we will rush fast. Otherwise, we'll have to wait a bit. With our patience, we are just maintaining the situation correctly.
Thank you so much, sir. I'll get back in queue. Have a very good day.
Thank you.
Thank you. The next question is from the line of Akhil Parekh from B&K Securities. Please go ahead.
Hi. Thanks for the opportunity and congratulations on a good set of numbers despite the tariff headwinds. Sir, my first question is, would you be able to quantify what percentage has been absorbed by us and what is kind of passed on to the end customer?
See, this is bit confidential because this is information which there are many customers and it depends on many factors, you understand. We can't divulge that information, like how much we are doing not, because that creates a conflict among our customers.
Sure. No issues, sir. The second, sir, the added 25% tariff, the last bit of tariff was implemented in end of August. How is the channel inventory at your client level? Was there any kind of overstocking we saw in month of August, at the time end of August, maybe? That's the second question.
Yeah, this tariff, we were aware of the first 25% that it is coming. Since April, we were preparing for that. There may be a situation where we'll have to go for 15%-25%, but this 50% came as pretty quick, and the timeline given was also pretty short. Still, we tried to get as much as possible. Our lines were already running full because of the season. It was quite good season. Whatever possible we could send the material, we could. There we built better inventory or higher inventory than it normally is. That's how we got the operational benefit in that case.
The channel inventory is normal at the customer level or that is what you're trying to say?
At the time, we made it higher when the tariff implemented. Right now, I would say it's lowest because we are trying to make it a very flexible one to take advantage. At the time when the tariff started, it was good inventory. They had two, three months inventory. Not to everyone, I'm talking of some key customers and. As we speak right now, we are maintaining the minimum because now everything has been flushed out of system, whatever was earlier lower tariff situation. Right now, the customers are keeping minimum and we are keeping good inventory.
Sure. This is actually my last two questions. One from your opening remarks, you mentioned that the 25% of the TPU capacity will be for the new production solution, new product solution. Will you be able to shed more light what exactly those products will be?
Yeah. See, the thing is, I think even the previous calls also, when we announced. TPU is a product which has got lots of potential. Very high technology product, which goes into various segments, including architectural and some others, maybe medical and all. We are working, but for the sake of competitive advantage, we would not like to share the exact product names, but our R&D is working, and before the plant starts, we would be ready with that product line so that it takes minimum to penetrate the market and take advantage of that. In very clear statements, we can say that 25% has been kept for new products, which might lead to a further expansion of this segment. 75% will be utilized for PPF and 25% for the new product. That's the strategic call the management has taken as of now.
Sure. The last question on the guidance on margins, you have guided 22%-25% we are comfortable with for the FY 2026. In the PPT, you highlighted revenue CAGR of 15%-20% for FY 2026 and beyond. How should one read it? Like FY 2026 also, we are confident of 15% given that we have marginally declined in the first half of this year. That's the last question.
Yeah. Like I said, we have been pretty clear. I mean, last three years before, we have given good guidelines and always maintained that. Current situation, it depends on the tariff and if everything goes well in November or December. In that case, I think we should be able to meet the guidelines of 25% ±3% for the year. As I said, as of now, the situation is volatile. The growth or in terms of inventories we have maintained and filled the supply chain so that we can take advantage of the situation if the tariff goes down. We are prepared for that kind of situation. Ultimately, it hinges around the decision on the tariff.
Sure, sir. This is helpful and rest we'll seek from company questions.
Thank you. Thank you very much.
Thank you. The next question is from the line of Rahul Jain from Credence Wealth. Please go ahead.
Thanks for the opportunity and congratulations to the entire team. Wonderful set of numbers in a very tough environment.
Thank you.
Just to clarify, the 20%-25% margins which you have said today, where the tariff is already at 50%. Are we saying as we speak today, with the kind of arrangements which you have already done with the buyers at 50% tariff, you are saying that at this level, we will be able to be in that margin range of 22%-25% if there is no change in tariffs?
No. What happened in Q1, we had 10% tariff, more or less, Q2, we had around 25%, some impact of 50%. Full impact of 50% is not seen yet. We have seen into couple of cases, but not the full quarter. If there is no deal or reduction on the tariff, then it will be really challenging to maintain that 22%-25%.
As I said, we have filled the inventory. Supply chain is quite strong now with healthy inventory. If any situation comes where it drops in November and December, then we will definitely be able to maintain this guideline which we have given just now. Else, we have made some arrangements already, where it will take maybe another quarter, let's say by Q4. We and our technical team, we have worked like, how do we navigate if the 50% remains forever as a worst-case scenario. We are prepared for that also. As of now, if this deal happens, we are good for 20%-25%. If that does not happen, we might have a stopgap of Q3 where we might have to suffer a bit. On overall annual basis, we will be able to maintain what we have guided.
Sure, that is very helpful. I'm assuming that at 25% tariff, we are talking about EBITDA margins of 20%-25%. Beyond that, it will worsen. That's really nice. Sir, within the segments, our next level of growth, when we spoke about a year back, we were talking about high growth in architectural films. Somewhere around we had reached last year around INR 50 crores on a quarterly basis. INR 200 crores, and we were targeting the next two, three years to take it to INR 500 crores. Also we had taken steps in terms of our team building in U.S. apart from India. Europe is already there. If you can share some more details in terms of architectural since where we stand today, and how do we see the growth in this particular segment?
Like you said, we have dedicated teams in U.S. market, in Europe and in India. They are taking care of the architectural business, and the growth has been really good. The current status, we are on track for achieving the growth which we have predicted. Again, slight disruption on margins, not on the sales from U.S.A. because of the tariff. We got good orders and we are catering to that. This impact of these sales might come in Q4 because of whatever that tariff decision comes. We have been able to get good orders and good traction into that segment, and that is for the U.S.A. Europe market is growing with the 20%-25% CAGR on architectural business. India, we are even faster.
The growth has been faster, though three years back we can say the base was small, but we continuously improved that. We almost doubled last year as compared to previous year. This year again, we are moving with the rate of 30%-40% in India market. In all together, we are on track and we are really, this is one of the key vertical for us because the company is working into various verticals like, we have one of the strongest was PPF, then automotive window films and the IPD.
These three are like, which we already doing, but on top of that architectural window film is one of the fastest growing. Then Garware Home Solutions will be another fast growth area. Lastly, the TPU from next year will be another one. The company is now focusing into different verticals for the next phase of growth for it.
Yeah. Sir, one question on TPU. You have mentioned in the current PPT margins of 20%-25% for FY 2026 onwards. I understand this is as we speak today without any benefits from TPU backward integration. What kind of benefits could accrue to us post the TPU commencement in terms of margins improvement?
Yeah. It is we estimated that in the current sales scenario, around between INR 2,000-INR 2,500, we estimated this EBITDA margin will improve by 1.5%-2% average.
For the total?
Yeah.
Yeah. That's quite helpful, sir. Really very decent work being done by the entire team at your end. Congratulations and best wishes. One last suggestion, sir. Earlier our presentations used to have much more information in terms of sun film contribution, PPF contribution, shrink film contribution, and also the exports and geography-wise exports. We used to have a map in the presentation, which was quite helpful, sir. If we could, whatever data, whatever information we were giving in earlier presentations, around two, three quarters back. My request would be if we can start including that again, that would be really helpful.
Yeah. First of all, thank you for the encouragement in the performance. This thing is noted. The only thing is we try to do is, the company is growing in every segment, and there has been some competitive issues with us where the competition is also trying to map the exact same manpower, growth numbers and everything. That's how we have tried to make it more concise. Of course, we will try to see what can be done on that. However, I have clearly shared the numbers segment-wise. Only we have not shared, but segment-wise, like I said, window film is like the best ever, maybe 50% in this quarter. I've shared all those things already in the previous questions.
Yes, that is what I do want. Sure, sir. Thanks.
Thank you, Mr. Jain.
Thank you.
Thank you. Ladies and gentlemen, to ensure the management can address questions from all participants, please limit your questions to two per person. If you have a follow-up, kindly rejoin the queue. The next question is from the line of Nilabja Dey from Ashmore Research. Please go ahead.
Sir, congratulations first of all, despite all the tough time going through. Sir, my questions is that, in the Q4 call, you have mentioned that you are-- that time, obviously, the 25% tariff was not announced with the additional. You mentioned that in case 25% tariff, that time it was 10%. You mentioned that you are trying hard to manage the tariff part through some means, number one. I don't know on what extent you have, but obviously this additional 25% is a big blow.
My question is that overall, in terms of the diversification of the supply chain, what you are doing? Lot of Indian companies have learned from this tough time, and they are actively diversifying, moving to UAE, or some other countries where they have already signed a favorable deal with USA. Because in times of tough global uncertainty, anything can come, and your only manufacturing base and staff is only in India. How you are planning for the next three to five years? I would move away from complete dependence on India as a sourcing country.
We are aware of this fact, I answered in the previous question, that we have evaluated a couple of options. The only difference between maybe it depends on the kind of company you are in. In our case, our quality is the prime differentiator in the U.S. market. If we do some kind of arrangements with any other company, we ensure that we maintain the same quantity, same quality, and at the same time, this confidentiality or the uniqueness which are patented technology, are maintained when we do such kind of things. We have evaluated all those things, and there is, of course, an additional cost when we do any kind of such arrangements or anything which we do. Last and foremost is the legality.
How it is viewed by the administration in terms of when you do this kind of substantial transformation. We have legal consultants. We have taken opinion, we have discussed with the companies. Everything is ready. The only thing is, if there is a deal, which we see coming in very soon. Before we sign any such kind of agreements, we have to be aware of the fact that we have to maintain that contract. We are very ethical company and transparent in all those things. If we sign such deals in, I would say in hurry or in panic mode, then it might be not great for company in the longer term. Coming back, this is a short-term arrangements for three to six months. We are aware, we have made all those arrangements.
If 50% stays, we will have to do something, and we are ready with that. That's one. At the same time, on a longer term, yes, we are working. That we are aware again, that there has to be a permanent solution to, I would say, de-risking this thing. Management is already working in that, and we have some progress on that as well. That can only be shared when something concrete happens, or at least the primary agreement is signed. We are doing that.
Great. Thank you. Thanks a lot.
Thank you. The next question is from the line of Aashish from InvesQ PMS. Please go ahead.
Yes, sir. Just for me to understand, how much of the absorption, especially from September, when the 50% tariff would have kicked in, would be done by supply chain and costing improvements, and how much is by us as a company on the top line, as well as the customers that we have? If that bifurcation is available, that will be helpful.
As I said, see, whatever has been passed on to the customer, that is really confidential because there are many customers and when I was in U.S. last week, they comment on this transcript of conference call. Most of them read what we are saying, how the company is navigating through these challenges. I can't give the number. That will be the breach of confidentiality with my customers, because some may be paying. There will be some up and down with each customer. That's why we will park this question as of now. O n the other issues, there has been, I can say 25% is kind of fully done into this quarter. Because Q1, we had an impact of 10% additional. That time we said that this has been taken care of, and Q2 there was additional 15%.
In totality, there was 25% and some of the 50% as well. That kicked on in September only, not much impact has been seen till date. Like I said, if there is a favorable deal, which is likely to happen, less than 25%, we will maintain this 20%-25% margin and the revenue also will be in line. If that does not happen, we will use the alternative methods, which will again add a cost of 20%-25%, but we can post these kind of same guidelines on margins, 20%-25%. This will not happen in Q3 because it will take some time before we start these arrangements. We might see a good Q4 the same way.
What you're saying, sir, is 25% is taken care of, which is absorbed, if the additional 25% does not go off out of the 50%, Q3 might see an impact due to the transition. There are alternative ways to absorb the overall 50% and get back on track by maybe Q4 or beyond this.
Yes, that's exactly what I said.
Yeah. Okay. Just to understand on this Home Solutions thing that you mentioned on the PPT, what exactly Home Solutions we would be offering?
Garware Home Solutions is end-to-end solution for our residential customers, consumers. That means we have observed that many of our employees and channel partners, they get inquiries like how to cater small houses. Our sales normally happens in the bulk of 100,000 or 1 lakh sq ft to our distributors and dealers. There are small requirements which cannot be fulfilled by dealers, distributors directly, and we are also not able to do that. We have made a new vertical where we will provide end-to-end solution for even the smaller home buyers, which having 25, 50 sq ft or 100 sq ft windows. Plus, there are some other PPF also, which is used in home, that is second offering.
The third will be, there are a couple of more products which we are not announcing now, right, to stay ahead of all kind of competition. In all, it's an end-to-end solution provided to residential home buyers, and it's mainly driven by, I would say, it's e-commerce driven business.
There is a market already there which some other competitors might be getting to, and we are getting fresh into this. Is this the right reason?
There is no one. We are the one who are entering, but we are partnering with many similar kind of businesses. Again, I won't explain it to that degree. Maybe in next or another two, three conference calls, I would be able to tell that because then it will be a tested and proper channel for us. Right now we are very excited about this because this is something which e-commerce is bringing to us, and something tried and tested in other kind of businesses for homes. Nobody has done the similar product, what we do in this segment. This is going to be really, I would say, we can say from a customer business consumer, we are really focusing on the direct consumer business with this.
Okay. Last from my side. If we can segregate the growth between at least exports and domestic, how was it? I don't think I read that number anywhere in the-
Yeah. What is export and domestic? One second.
Yes, Q2. Export is about 75%, 70%-
70%. Yeah. Saying around 76% is the export and 24% is the domestic.
What was the growth in that in Q2?
See, in the growth, I can say the segment-wise, it's like there has been actually a lot of mix in this quarter because of this tariff. I can say the most, I mean, window film from 42% to 50%, it has gone up. First time window film has touched a 50%, I mean, share in our product portfolio, and PPF is around 25%, and IPD is around 25%. Domestic and export growth, we can separately share with you. You can reach out to Vayu, we can give you those numbers.
Okay. All the best. Thank you.
Thank you.
Thank you. Ladies and gentlemen, we request you to limit your questions to two per participant. In case of follow-up, kindly rejoin the queue. The next question is from the line of Nachiket from Verivita Capital. Please go ahead.
Yeah, I really appreciate the concise performance from the Garware Hi-Tech. That speaks very highly of the residential performance. Sorry, my query already got answered in the previous question, so thanks for the opportunity. Wish you the best in the future.
Okay. Thank you very much. Thanks a lot.
Thank you. The next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead.
Yeah. Thanks for the opportunity, congratulations for a great set of numbers in these challenging times. My first question is on the performance of Sun Control Films. We have seen a highest ever revenue in this segment during the quarter. If you can talk about what is leading to this growth and how much of this growth is contributed from architectural films and how much from the automotive SCF. Which geographies have led to such significant growth in this segment? Because last, I think, as per my understanding, Q2 of last year, we did around INR 239, INR 240 growth revenues from SCF, and this quarter we have done almost INR 285 growth.
Yeah. Again, Sun Control business is our primary business, all other businesses, it's, I would say, the lead in our set of business. Like you rightly asked question about automotive and architectural. The growth on automotive segment has happened around, I can say around 15%, 10%-15% growth has come from automotive, whereas architectural business has grown around 25%-30% in this particular quarter. The growth, if you see, one of the major factor what is contributing this growth is, first of all, it is the summer season, but unfortunately, it's more rains this year than as compared to previous years. In outside export market also, we didn't see a very strong summer this year. Our brand value and the penetration into channel partners and the marketing efforts all together has really, really done well in Indian market.
One of the leading, let me tell you, which market led this growth is Middle East market. It has really gone well into that market because for us, we are a known brand into automotive. Over last three years, we have been putting lot of efforts in the architectural segment. Middle East has been a market where our name was not known. Despite being advanced market, still awareness by overall window film manufacturer is not that great. We have now hired local people in Middle East. The entire team and the distributor are local people, like local Emirati people. In Saudi as well. These two markets have been the leaders for us in architectural segment.
Your question, where the growth has come in architectural segment, number one is Middle East, number two is Europe, then U.S. has almost the very low base. That has also done really, really well. We have done a very big distributor converted to global business from one of the number one architectural film companies. Of course, India is growing by the rate of 35%-40% in architectural.
Okay. One more question on the architectural film itself. As a segment, given the potential it has, when do you think, as a company, you can reach a revenue base of around INR 500 crore from this segment? Any target that you have in mind, let's say by 2027, 2028, 2029, you can reach those kind of numbers from architectural films?
Yes, definitely. Again, we are targeting a horizon of three years because wherever we have hired new resources and made entire new set of distributors or taken existing ones. I can say three years horizon you can take for that kind of growth of a standalone INR 500 crore. I mean, INR 500 crore alone from architectural business. Again, we are quite confident that this will happen because in architectural segment, the real competitor is there is no one. It's more of like we have to create our own market there, especially in markets like India and U.S., which is already advanced market, we are taking share of our peers. The strategy for each market is very different. Again, that business is really big and there is lot of potential, which we are realizing that will happen with lot of awareness into the market.
The current contribution from this segment will be INR 100 crore, INR 150 crore or lower than that, architectural?
Current contribution is like, just a second, I'll check the number. How much? INR 232 crore?
Okay.
Yeah. It's like around last year it was more than INR 200 crore, and this year we expect somewhere around INR 300 crore. INR 250 crore-INR 300 crore.
Okay. Thank you. I understood. Yeah.
Thank you.
Thank you. The next question is from the line of Saransh Gupta from SVAN Investments. Please go ahead.
Thanks for the opportunity, sir. Congratulations on a good set of numbers in such uncertain times. A lot of my questions have been answered. I just wanted to know what was the contribution of PPF for this quarter?
PPF contributed roughly 25% of revenues this quarter.
Okay.
You can see out of 500-
Yeah, 570.
570. 25% was PPF. Again, I'll just repeat to everyone, 50% window films, 25% PPF, and 25% IPD.
Okay. Did we see an impact of the 6% tariff for the PPF segment? As we can see, it has gone down and it has gone more towards our
I would like to say this is the maximum impact on our business line and business vertical. PPF, it has got the maximum impact of tariff because the price per square feet of PPF is the highest among all other product category. The tariff impact was also quite big on that.
Okay. Taking an assumption, if the penalty tariff of 25% is being removed and our second PPF coming in, what can be the revenue growth that we can guide with?
On a broad level, let's not speak on the short term for this quarter or this year.
Long term only, sir.
Yeah.
Two or three years.
For long term, PPF will be this. I will start with the lowest one. The IPD will go down to 20%. It used to be 30% last year, originally 70%. Now it is on around 25%. That will go down to 20%. PPF will increase to 30%-35%, and balance will be window film. Window film will remain 45%/50% and this 25%/30%, and then maybe IPD 15%-20%. That's growth. We are expecting these kind of numbers every year on the growth. This will be more or less the split between the verticals.
Okay. Also just one question, does this include contribution from our architecture films also?
Yeah. As I said, the window film automotive is, we are quite strong, but towards, we are having the maximum market share there. The growth will definitely come from automotive window film also. I'm expecting 15%-20% for sure, and PPF maybe 20%-25%. Architectural window film will grow minimum 25%-30% or even a little higher for next two to three years. That is a segment which has got the highest potential.
Just a follow-up on this sir. As we are guiding this growth for architectural, from which region do we focus our growth on?
We do not leave any particular geography. We have a separate team. They are not dependent on each other for U.S. architectural. The idea to make a different team is, they do not focus on. Sometimes this interest or conflict is not there in terms of growth. We have U.S. separate architectural team, Middle East separate architectural team, and India separate architectural team. All areas, all geographies are working towards the growth of this business. The natural Middle East is really growing very fast for us in this segment.
Okay, sir. If we blend all these regions together, obviously the cost, there will be some cost difference in that, but what can be the blended margin that we can make on this architectural film, as we are the only sole player as you mentioned?
No. See, on this particular segment, it is not about, we have to, first of all, like I said, create our own market, at the same time compete with the glass. There are certain modifications in the glass also helps these kind of benefits, but that becomes very expensive. We have to make the product pricing in such a way that we get the maximum business out of this. The plain and simple thing is most of the glass is plain glass or toughened glass. There is a lot of possibility to have the sun control, safety, security, and combination safety. That means, if you have a simple glass, you can put a film to block your heat component by, I can say around 50%. At the same time, you can control the glare and sunlight also, whatever degree you want.
Ultimately, the competition is with the glass. Where there is a retrofit and old things, we are working hard to get those kind of business. Now coming back to what you asked about the margins. Margins, on the high product, we can go up to 25%-30%. Again, we would like to give the company margins more than the individual segment margins because there is very low-end films also. We call them single ply and not of much benefit to the glass. V ersus the very high-end IR films which can block up to 99% of near infrared.
The technicality is the product can be highly technical but expensive. At the same time, it can be at the price at very economical range, but it won't give you that kind of benefit. Overall, if you talk of the mix of architectural business, I think this will be slightly higher than the company margins, which is 22%-25%. We can assume 25%-30% is the margin.
That's very helpful, sir. Thank you so much, and all the best for the future endeavors.
Thank you.
Thank you. The next question is from the line of Sunil Jain from Nirmal Bang. Please go ahead.
Yeah, thanks for taking my question and congrats on the results. Sir, my question relate first to India. What is the total share of the India business? You said that it has grown very well, 30%-40%. What is the total share of India business? In that, how much is IPD and how much is the consumer led business?
Yeah. Total 24% has come from India, 76% from exports. That's the broad category-wise for overall company business, export and domestic. Now, segment margins, we don't give. Just one second. Your question is how much the growth has happened into industrial product and consumer products.
Yeah.
Yeah. Consumer products, there is hardly any growth. In fact, there is slightly degrowth, I can say.
Industrial?
Industrial. Consumer products, we have really grown well. I can say on two different segments, there is a growth of 15%-20% on automotive and 25%-30% on architectural.
Okay. Talking about 30%-40% growth in the domestic market, so segment has grown faster.
Yeah. I said there is a segment which is kind of untapped or Let me tell you, there are commercial buildings which do lot of window films, especially for the safety films. Like many of the chain, I would say, hotels and then there's the lifestyle brands and some of the brands like jewelry and all. I'm not naming them per se because we have to check the permissions from the brand owners. We do lot of such business, which is quite common. We were already doing that business, and we are number one in that, and we sell the highest volume in that. The real growth is coming from commercial, other than those like hospitality and lifestyle brands. The next round of growth is coming from malls and all those things where we are putting lot of efforts in architectural business.
Lastly, from the Garware Home Solutions, we are residential buyers. We have good network of applicators plus architects plus the builders on that. This business was not being, I would say, the focus area for us or any other company. We have shifted the focus to area which has got much more higher potential than the existing ones. It needs lot of awareness, and like I said, we don't compete with anyone. We have to create our own market. That's why we are seeing the good growth there, because we are creating that segment for us. It is taking time, base is low, so growth is quite fast there.
The auto business was growing at around 15%-20%?
Auto? Yeah, that is more or less with that.
The second question related to.
Sorry to interrupt, sir.
Yeah?
Sir, I would request you to kindly rejoin the queue.
Okay. Yeah.
Thank you. Participants are requested to limit their questions to two per participant. The next question is from the line of Mahesh from LIC Mutual Fund. Please go ahead.
Sir, thank you so much. I have just one question. Sir, you mentioned that there are news reports that there is possibility of a deal between India and U.S.A. If it happens in near future, we will benefit in Q4, since our inventory is very low in the system.
Yes. We'll definitely be benefited in Q4.
Q4 will be very strong in that case?
Yes.
Sure. Thank you so much.
Thank you.
Thank you. The next question is from the line of Ankush Agrawal, Surge Capital. Please go ahead.
Yeah. Hi, sir. Thank you for taking my question. Sir, just one thing I'd want to understand is, you have given a good explanation of how you're dealing with the customers in terms of inventory and passing of, say, tariff and all that. I wanted to understand how is that playing out in terms of your white labeling customers. We do white labeling, especially in the PPF for some of the larger customers. In that case, what's the strategy that they are working with? Are they diversifying their supply chain or they are still continuing to buy from us, but we are sharing a substantial portion of the tariffs? How is it working there?
See, the strategy-wise is the same for both. Yes, with the tariffs, because short-term, both have to bear the cost because in PPF, the value becomes pretty big. In that case, the impact also becomes big for both the companies. That is being shared. This is an expectation of something will come out, else we'll have to make arrangements. Like I said, we are ready with alternative arrangements as well.
I'm sorry. The inventory situation that you highlighted, which has gone down from three months to one month, that will apply to this white labeling customer also, right?
Yeah. That is with everyone. That's the general consensus. We have had discussions with our customers, whoever customer, maybe distributor, dealer, or white label, that how should we deal with the situation. That is the consensus, how we will deal, and we are dealing according to that.
Okay. Lastly, sir, has there been any impact on the consumer level of take for this product? Given there will be some price increases or whatever.
No, not really because the ultimate impact to consumer is either pretty low there is no, because we are assuming, like I said, because of the inventory, we are trying to work with the minimum one, so that whatever the short-term strains are there, will be there. Like I said, in Q3 will be a period where there will be lot of adjustments or such kind of adjustment would be there. On a longer run, we expect either one or We have couple of solutions. There is coat, there is deal, and there is alternative arrangement. Ultimately, by one way or the other way, in the longer term, our growth story is intact. That's why we have kept the consumers away from all these situation, because the aim is not to lose a single customer. In that way, ultimately it has worked in this way.
That this is absorbed somewhere in the chain, not passed on to the consumer.
Okay. That was it. Thank you.
Thank you.
Thank you. Ladies and gentlemen, due to time constraint, this will be our last question. The next question is from the line of Arya Shah from Whitestone PMS. Please go ahead.
Hello. Hi. Thanks for the opportunity. Hello. Am I audible?
Yes, sir, you're audible. Please go ahead.
I just have a question on the architectural product side. I just wanted to understand, on the architectural front, do we make products which are protected for a marble, or we make products which will replace marble in the near future? Like it will be an exactly like a wallpaper or something.
We make products which can be applied on the marble, but cannot replace marble, because our architectural segment means we focus mainly onto the safety security. Like if you have a high-rise building, and there is a possibility of breaking the glass, including the toughened glass also breaks and might cause injuries. Our products are the best for such kind of situation, that is number one. The situation is where you face lot of heat and all. Our films can reduce the near infrared, the heat component up to 99%. That's another way of doing our films into architectural business. Third thing is the surface protection, which can be applied on the furnitures or any of the marbles, kitchen sink, and all those things. These are the examples of architectural business from our products.
Okay. We don't make the design kind of thing for the place on the furniture or something like that, right?
No, we don't do that.
No design? Okay. Thank you, and a ll the best.
Thank you very much. Thank you.
Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for its closing comments.
Thank you very much. On behalf of Garware Hi-Tech Films Limited Management, I would like to thank you everyone for your time. Should you need any assistance or any questions, please write to our IR department. Thank you very much. Have a good day. Bye.
On behalf of Go India Advisors LLP, that concludes this conference. Thank you for joining us. You may now disconnect your lines.