Capitaline

Results 06-Aug-22

Analysis

Garware Technical Fibres

Weak performance

Garware Technical Fibres consolidated net sales increased 25.24% to Rs 304.5 crore in Q1FY23 compared to Q1FY22. Sales of Synthetic Cordage segment has gone up 31% to Rs 252.44 crore (accounting for 81% of total sales). Sales of Fiber and Industrial Products & Projects segment was up 3% to Rs 57.31 crore (accounting for 19% of total sales). Inter-segment sales came down from Rs 5.45 crore to Rs 5.26 crore

Operating profit margin has declined from 17.66% to 13.34%, leading to 5.40% decline in operating profit to Rs 40.62 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 31.37% to 33.36%. Purchase of finished goods cost rose from 3.94% to 4.31%. Employee cost decreased from 13.67% to 13.04%. Other expenses rose from 35.67% to 37.02%.

Other income fell 21.76% to Rs 4.71 crore. PBIDT fell 7.41% to Rs 45.33 crore. Provision for interest rose 19.49% to Rs 2.82 crore.

PBDT fell 8.78% to Rs 42.51 crore. Provision for depreciation rose 2.47% to Rs 5.39 crore.

Profit before interest, tax and other unallocable items (PBIT) fell 4% to Rs 43.85 crore. PBIT of Synthetic Cordage segment rose 2% to Rs 38.89 crore (accounting for 89% of total PBIT). PBIT of Fiber and Industrial Products & Projects segment fell 34% to Rs 4.96 crore (accounting for 11% of total PBIT).

PBIT margin of Synthetic Cordage segment fell from 19.78% to 15.41%. PBIT margin of Fiber and Industrial Products & Projects segment fell from 13.48% to 8.64%. Overall PBIT margin fell from 18.37% to 14.15%.

Profit before tax down 10.21% to Rs 37.12 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 8.93 crore, compared to Rs 9.4 crore. Effective tax rate was 24.06% compared to 22.74%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company decreased 11.74% to Rs 28.19 crore.

Promoters’ stake was 52.62% as of 30 June 2022 ,compared to 52.62% as of 30 June 2021 .

In a statement, Mr. Vayu Garware, CMD,Garware Technical Fibres Ltd. said, "We witnessed a strong top line growth during the first quarter. However, the quarter also saw a further increase in raw material and input costs, which have been passed through with a lag. Raw material costs, along with a continuing lack of availability of containers to deliver some of our high margin export sales has temporarily affected the margins for this quarter. Delayed shipments have also caused an increase of inventories as of June quarter end. These materials will be carried forward to Q2 sales.

With good movement of export orders so far in Q2 as well as a recent softening in the raw material, we expect to have a positive second quarter in FY23.

We are also proud that GTFL`s deep connect with its team was independently recognized by the Great Place to Work@ Institute India. In 2022, GTFL was ranked 49th amongst India`s best companies to work for, across sectors. There was a significant increase in our trust index score under this survey".

Full year results analysis

Net sales of Garware Technical Fibres have increased 14.97% to Rs 1189.4 crore. Sales of Synthetic Cordage segment has gone up 17.29% to Rs 1,030.32 crore (accounting for 84.83% of total sales). Sales of Fiber and Industrial Products & Projects segment has gone up 5.77% to Rs 184.20 crore (accounting for 15.17% of total sales). Inter-segment sales rose Rs 18.04 crore to Rs 25.12 crore.

Operating profit margin has declined from 19.75% to 18.74%, leading to 9.07% rise in operating profit to Rs 222.90 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 24.83% to 28.53%. Purchase of finished goods cost fell from 2.98% to 2.58%. Employee cost decreased from 14.93% to 12.29%. Other expenses rose from 37.28% to 38.32%.

Other income fell 26.33% to Rs 25.54 crore. PBIDT rose 3.93% to Rs 248.44 crore. Provision for interest rose 2.42% to Rs 10.57 crore. Loan funds declined from Rs 101.81 crore as of 31 March 2021 to Rs 79.57 crore as of 31 March 2022. Inventories rose to Rs 223.93 crore as of 31 March 2022 from Rs 190.42 crore as of 31 March 2021. Sundry debtors were higher at Rs 257.94 crore as of 31 March 2022 compared to Rs 241.78 crore as of 31 March 2021. Cash and bank balance declined from Rs 57.40 crore as of 31 March 2021 to Rs 40.47 crore as of 31 March 2022. Investments rose to Rs 520.76 crore as of 31 March 2022 from Rs 466.93 crore as of 31 March 2021 .

PBDT rose 4% to Rs 237.87 crore. Provision for depreciation rose 3.92% to Rs 21.46 crore. Fixed assets declined from Rs 242.36 crore as of 31 March 2021 to Rs 235.82 crore as of 31 March 2022. Intangible assets declined from Rs 4.76 crore to Rs 4.20 crore.

Profit before interest, tax and other unallocable items (PBIT) has jumped 9.72% to Rs 235.69 crore. PBIT of Synthetic Cordage segment rose 13.02% to Rs 213.56 crore (accounting for 90.61% of total PBIT). PBIT of Fiber and Industrial Products & Projects segment fell 14.40% to Rs 22.13 crore (accounting for 9.39% of total PBIT).

PBIT margin of Synthetic Cordage segment fell from 21.51% to 20.73%. PBIT margin of Fiber and Industrial Products & Projects segment fell from 14.84% to 12.01%. Overall PBIT margin fell from 20.41% to 19.41%.

Profit before tax grew 4.01% to Rs 216.41 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 51.63 crore, compared to Rs 49.67 crore. Effective tax rate was 23.86% compared to 23.87%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 4.03% to Rs 164.78 crore.

Equity capital stood at Rs 20.62 crore as of 31 March 2022 to Rs 20.62 crore as of 31 March 2021. Per share face Value remained same at Rs 10.00.

Promoters’ stake was 52.62% as of 31 March 2022 compared to 52.62% as of 31 March 2021 .

Cash flow from operating activities decreased to Rs 63.85 crore for year ended March 2022 from Rs 228.07 crore for year ended March 2021. Cash flow used in acquiring fixed assets during the year ended March 2022 stood at Rs 14.71 crore, compared to Rs 23.55 crore during the year ended March 2021.

The stock trades at Rs 3024

Garware Technical Fibres : Consolidated Results
Particulars	2206 (03)	2106 (03)	Var.(%)	2203 (12)	2103 (12)	Var.(%)
Net Sales	304.50	243.13	25	1,189.40	1034.57	15
OPM (%)	13.3	17.7		18.7	19.8
OP	40.62	42.94	-5	222.9	204.37	9
Other Inc.	4.71	6.02	-22	25.54	34.67	-26
PBIDT	45.33	48.96	-7	248.44	239.04	4
Interest	2.82	2.36	19	10.57	10.32	2
PBDT	42.51	46.60	-9	237.87	228.72	4
Depreciation	5.39	5.26	2	21.46	20.65	4
PBT	37.12	41.34	-10	216.41	208.07	4
Taxation	8.93	9.40	-5	51.63	49.67	4
PAT	28.19	31.94	-12	164.78	158.40	4
Minority Interest (MI)	0.00	0.00		0	0
Net profit	28.19	31.94	-12	164.78	158.40	4
EPS (Rs)*	#	#		79.9	76.8
Notes
* EPS is on current equity of Rs 20.62 crore, Face value of Rs 10, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
Figures in Rs crore
Source: Capitaline Corporate Database

Garware Technical Fibres : Consolidated Segment Results
	% of (Total)	2206 (03)	2106 (03)	Var.(%)	% of (Total)	2203 (12)	2103 (12)	Var.(%)
Sales
Synthetic Cordage	81	252.44	192.97	31	85	1,030.32	878.46	17
Fiber and Industrial Products & Projects	19	57.31	55.61	3	15	184.2	174.15	6
Total Reported Sales	100	309.76	248.58	25	100	1,214.52	1,052.61	15
Less: Inter segment revenues		5.26	5.45	-3		25.12	18.04	39
Net Sales		304.50	243.13	25		1,189.40	1,034.57	15
PBIT
Synthetic Cordage	89	38.89	38.17	2	91	213.56	188.95	13
Fiber and Industrial Products & Projects	11	4.96	7.49	-34	9	22.13	25.85	-14
Total PBIT	100	43.85	45.66	-4	100	235.69	214.8	10
Less : Interest		2.82	2.36	20		10.57	10.32	2
Add: Other un-allcoable		-3.90	-1.97	98		-8.7	3.59	PL
PBT		37.12	41.33	-10		216.41	208.07	4

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