Garware Hi-Tech Films Posts 42% Profit Growth in Q2

Revenue: Rs 696 Crore (+22% YoY) | PAT: Rs 129 Crore (+42% YoY)

Reader Takeaway: Strong premiumization and capacity expansion drive margin upgrades, though raw material costs remain a key variable.

What just happened

Garware Hi-Tech Films delivered a robust performance for the quarter ending September 30, 2026. The company reported a 22% year-on-year revenue increase to Rs 696 crore, while net profit grew 42% to Rs 129 crore. EBITDA margins also expanded by 377 basis points to 27.2%. For the first half of the fiscal year, revenue reached Rs 1,329 crore, representing a 25% growth over the previous year.

Why this matters

The company’s strategic shift toward value-added products—which now account for 86% of total revenue—is yielding significant margin expansion. Management has upgraded its EBITDA margin guidance to 27% (±2%) and signaled confidence in reaching over Rs 3,000 crore in revenue by FY28. This is supported by a strong cash position of Rs 933 crore, providing the balance sheet strength to fund ongoing capital expenditure.

Strategic Updates

Garware is executing two major capacity projects: a new solar control film line expected by H1 FY28 (adding 1,200 lakh sq ft) and a TPU film line set to commission in Q3 FY27. Furthermore, the company is scaling its consumer studio network, currently at 14 locations, with a target of 50 studios by the end of 2027. A partnership with Lubrizol is actively fueling product development in TPU applications.

Risks to watch

Management cited increased inventory levels of 58-60 days to hedge against supply chain volatility caused by geopolitical tensions. Investors should monitor raw material price fluctuations, particularly those linked to crude oil. Additionally, the company noted a recent Rs 25 lakh MPCB penalty regarding boiler modifications, which it states has been addressed and rectified.

What to track next

Key milestones include the commissioning timelines for the TPU and solar control film capacities. Investors will also look for the performance impact of the expanding studio network and whether backward integration successfully drives the projected 150-200 bps margin expansion in FY28.