Capitaline

Results 14-Aug-23

Analysis

Garware Technical Fibres

Expect a good FY24

Garware Technical Fibres consolidated net sales increased 6.95% to Rs 325.67 crore in Q1FY24 compared to Q1FY23. Sales of Synthetic segment has gone up 4.51% to Rs 263.83 crore (accounting for 78.12% of total sales). Sales of Fiber & Industrial segment has gone up 28.91% to Rs 73.89 crore (accounting for 21.88% of total sales). Inter-segment sales rose Rs 5.26 crore to Rs 12.05 crore.

Profit before interest, tax and other unallocable items (PBIT) has jumped 41.39% to Rs 61.99 crore. PBIT of Synthetic segment rose 33.02% to Rs 51.73 crore (accounting for 83.45% of total PBIT). PBIT of Fiber & Industrial segment rose 107.08% to Rs 10.26 crore (accounting for 16.55% of total PBIT).

PBIT margin of Synthetic segment rose from 15.41% to 19.61%. PBIT margin of Fiber & Industrial segment rose from 8.65% to 13.89%. Overall PBIT margin rose from 14.15% to 18.36%.

Operating profit margin has jumped from 13.34% to 17.87%, leading to 43.30% rise in operating profit to Rs 58.21 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 33.36% to 29.83%. Purchase of finished goods cost fell from 4.31% to 3.38%. Employee cost increased from 13.04% to 13.85%. Other expenses fell from 37.02% to 36.48%.

Other income rose 98.51% to Rs 9.35 crore. PBIDT rose 49.04% to Rs 67.56 crore. Provision for interest rose 55.32% to Rs 4.38 crore.

PBDT rose 48.62% to Rs 63.18 crore. Provision for depreciation rose 12.99% to Rs 6.09 crore.

Profit before tax grew 53.80% to Rs 57.09 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 14.13 crore, compared to Rs 8.93 crore. Effective tax rate was 24.75% compared to 24.06%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 52.39% to Rs 42.96 crore.

Promoters’ stake was 52.70% as of 30 June 2023 ,compared to 52.62% as of 30 June 2022.

In a statement, Mr. Vayu Garware, CMD, Garware Technical Fibres Ltd. said, "FY 24 has started off well and as per plan. Profit before tax has increased by 54% over the first quarter of previous year. PBT margins have recovered to 17%+ levels and we look to maintain those going forward. It should be noted that Q1FY23 was not very good for us, so this is a strong recovery this FY. Aquaculture business has remained strong during the quarter especially in Chile. Geosynthetics business also continued its excellent growth momentum and delivered well on profitability as well as ROCE. Domestic businesses have also done well during Q1FY24 over previous Q1FY23. We expect a good FY24".

Full year results analysis

Net sales (including other operating income) of Garware Technical Fibres has increased 9.77% to Rs 1305.55 crore. Sales of Synthetic Cordage segment has gone up 7.14% to Rs 1,103.87 crore (accounting for 83.25% of total sales). Sales of Fiber and Industrial Products & Projects segment has gone up 20.60% to Rs 222.14 crore (accounting for 16.75% of total sales). Inter-segment sales came down from Rs 25.12 crore to Rs 20.46 crore.

Profit before interest, tax and other unallocable items (PBIT) has jumped 4.16% to Rs 245.49 crore. PBIT of Synthetic Cordage segment rose 2.59% to Rs 219.09 crore (accounting for 89.25% of total PBIT). PBIT of Fiber and Industrial Products & Projects segment rose 19.31% to Rs 26.40 crore (accounting for 10.75% of total PBIT).

PBIT margin of Synthetic Cordage segment fell from 20.73% to 19.85%. PBIT margin of Fiber and Industrial Products & Projects segment fell from 12.01% to 11.88%. Overall PBIT margin fell from 19.41% to 18.51%.

Operating profit margin has declined from 18.74% to 17.58%, leading to 2.98% rise in operating profit to Rs 229.54 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 28.53% to 28.21%. Purchase of finished goods cost rose from 2.58% to 3.15%. Employee cost increased from 12.29% to 12.92%. Other expenses fell from 38.32% to 37.94%.

Other income rose 9.24% to Rs 27.9 crore. PBIDT rose 3.62% to Rs 257.44 crore. Provision for interest rose 13.06% to Rs 11.95 crore. Loan funds rose to Rs 133.55 crore as of 31 March 2023 from Rs 79.57 crore as of 31 March 2022. Inventories declined from Rs 223.93 crore as of 31 March 2022 to Rs 214.37 crore as of 31 March 2023. Sundry debtors were lower at Rs 234.04 crore as of 31 March 2023 compared to Rs 257.94 crore as of 31 March 2022. Cash and bank balance rose to Rs 45.82 crore as of 31 March 2023 from Rs 40.47 crore as of 31 March 2022. Investments rose to Rs 617.39 crore as of 31 March 2023 from Rs 520.76 crore as of 31 March 2022 .

PBDT rose 3.20% to Rs 245.49 crore. Provision for depreciation rose 3.96% to Rs 22.31 crore. Fixed assets increased to Rs 241.64 crore as of 31 March 2023 from Rs 235.82 crore as of 31 March 2022. Intangible assets declined from Rs 4.20 crore to Rs 3.88 crore.

Profit before tax grew 3.13% to Rs 223.18 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 50.98 crore, compared to Rs 51.63 crore. Effective tax rate was 22.84% compared to 23.86%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 4.50% to Rs 172.20 crore.

Equity capital decreased from Rs 20.62 crore as of 31 March 2022 to Rs 20.38 crore as of 31 March 2023 . Per share face Value remained same at Rs 10.00.

Promoters’ stake was 52.70% as of 31 March 2023 ,compared to 52.62% as of 31 March 2022 .

Cash flow from operating activities increased to Rs 189.38 crore for year ended March 2023 from Rs 63.85 crore for year ended March 2022. Cash flow used in acquiring fixed assets during the year ended March 2023 stood at Rs 28.90 crore, compared to Rs 14.71 crore during the year ended March 2022.

The stock trades at Rs 3193

Garware Technical Fibres : Consolidated Results
Particulars	2306 (03)	2206 (03)	Var.(%)	2303 (12)	2203 (12)	Var.(%)
Net Sales	325.67	304.50	7	1,305.55	1,189.40	10
OPM (%)	17.9	13.3		17.6	18.7
OP	58.21	40.62	43	229.54	222.9	3
Other Inc.	9.35	4.71	99	27.9	25.54	9
PBIDT	67.56	45.33	49	257.44	248.44	4
Interest	4.38	2.82	55	11.95	10.57	13
PBDT	63.18	42.51	49	245.49	237.87	3
Depreciation	6.09	5.39	13	22.31	21.46	4
PBT	57.09	37.12	54	223.18	216.41	3
Taxation	14.13	8.93	58	50.98	51.63	-1
PAT	42.96	28.19	52	172.20	164.78	5
Minority Interest (MI)	0.00	0.00		0	0
Net profit	42.96	28.19	52	172.20	164.78	5
EPS (Rs)*	#	#		84.5	80.9
Notes
* EPS is on current equity of Rs 20.38 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)	2306 (03)	2206 (03)	Var.(%)	% of (Total)	2303 (12)	2203 (12)	Var.(%)
Sales
Synthetic Cordage	81	263.83	252.44	-1	83	1,103.87	1,030.32	7
Fiber and Industrial Products & Projects	19	73.89	57.31	33	17	222.14	184.2	21
Total Reported Sales	100	337.72	309.76	4	100	1,326.01	1,214.52	9
Less: Inter segment revenues		12.05	5.26	5		20.46	25.12	-19
Net Sales		325.67	304.50	4		1,305.55	1,189.40	10
PBIT
Synthetic Cordage	89	51.73	38.89	6	89	219.09	213.56	3
Fiber and Industrial Products & Projects	11	10.26	4.96	43	11	26.4	22.13	19
Total PBIT	100	61.99	43.85	9	100	245.49	235.69	4
Less : Interest		4.38	2.82	120		11.95	10.57	13
Add: Other un-allcoable		-0.51	-3.90	48		-10.36	-8.7	-19
PBT		57.10	37.12	10		223.18	216.41	3

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