Garware Hi-Tech Films (500655) Q2 25/26 earnings summary

Executive summary

• Demonstrated resilience amid geopolitical volatility and sharp U.S. tariff increases, achieving sequential revenue growth and stable fundamentals in Q2 FY26.

• Focused on sustainable growth, innovation, and capturing emerging opportunities, including the commercialization of a new Paint Protection Film (PPF) production line.

• Strategic initiatives included doubling PPF capacity, launching Garware Home Solutions (D2C), and expanding Garware Application Studios.

• Maintained robust customer relationships in the U.S. by absorbing a portion of tariffs to avoid customer loss.

• Value-added products contributed 87% of FY25 revenue.

Financial highlights

• Q2 FY26 consolidated revenue: ₹621 crore, up from ₹570 crore in Q2 FY25; EBITDA: ₹150 crore (margin 24.2%), up from ₹133 crore (23.4%); PAT: ₹104 crore (margin 16.8%), up from ₹91.2 crore (16%).

• H1 FY26 revenue: ₹1,065 crore, EBITDA: ₹256 crore, PAT: ₹174 crore.

• Annual FY25 revenue: ₹2,109 crore, EBITDA margin: 23.5%, PAT: ₹331 crore.

• Debt-free balance sheet with liquidity surplus of ₹697 crore as of September 30, 2025.

• Working capital days: 37 as of H1 FY26.

Outlook and guidance

• Targeting EBITDA margins of 22-25% for FY26, with revenue CAGR guidance of 15-20% and PPF business expected to grow 20% annually.

• Next growth phase driven by expanded PPF capacity and entry into D2C residential market.

• Export share expected to remain above 70% with continued focus on value-added products.

• TPU backward integration expected to improve EBITDA margin by 1.5%-2% post-commissioning.

• If tariffs reduce, Q4 is expected to be particularly strong; otherwise, alternative arrangements are ready to maintain margins.