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Garware Hi-Tech Films Limited (GHFL) produces high quality and varieties of specialty polyester films used in various industries across the globe such as Paint Protection Films (PPF), Sun Control Films (SCF), Shrink Labels, etc. It is one of the few companies in the world to have a vertically integrated chip-to-film facility in Aurangabad, Maharashtra. The Company’s well established global brands, ‘Garware Suncontrol Films’ and ‘Global Window Films’ are known for their quality and innovation. Company derives nearly 78% of revenues from exports mainly to North America and European markets.

Growth Drivers –

* GHFL plans to create uptick in demand of ‘safety glazing’ window films in India by solid sales and marketing strategy. Company would leverage its wide network of 650+ OEM dealerships and 120+ channel partners.

* Increasing share of premium & luxury vehicle segment (Sedan, SUV, and MPV) and growth in the EV segment to enable higher PPF adoption. Annually ~30-35 lakh cars sold in India and nearly 40% are SUV and luxury car segment – which is essentially the target segment for PPF. Existing Capacity is of 300 LSF; Capacity under expansion – 300 LSF (to be commissioned by Q2FY26 with a capex of Rs.125 crore) which will meet the growing demand for PPF.

* India has a great scope to emerge as a sizable player in shrink film manufacturing as part of China-plus-one diversification strategy and company wants to make maximum benefit out of it.

Valuation - GHFL has increased contribution of value added products from 48% in FY17 to 89% in FY24 resulting in better margins and highly differentiated product portfolio for the company. It is now increasing capacity of PPF segment and is seeing strong traction in SCF’s architectural segment which would act as key catalysts for future growth. Moreover, the valuation of 24x its FY2026E EPS looks attractive, considering strong growth prospects and high cash. Hence, we recommend a BUY on the stock with a price target of Rs 4848 upside of 20%.

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SEBI Registration number is INH000001766