Garware Hi-Tech Films Ltd (NSE: GARWARPOLY) Q3 2026 Earnings Call dated Feb. 02, 2026
Corporate Participants:
Deepak Joshi — Director of Sales and Marketing
Abhishek Agarwal — Chief Financial Officer
Garima Singla — Investor Relations
Analysts:
Mahesh Bendre — Analyst
Rahul Jain — Analyst
Viraj Parekh — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Garware High Tech Films Limited Q3 and 9 month FY26 earnings conference call hosted by Go India Advisors LLP. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Garima Singla from GoIndia Advisors LLP. Thank you.
And over to you, ma’. Am.
Garima Singla — Investor Relations
Thank you. Good morning everyone. I am Garima Singhla and it’s my pleasure to welcome you on behalf of Garware High Tech Films Limited. Thank you for joining us today for quarter three and nine months of financial year 26 earnings conference call. This call is being hosted by Goindia Advisors. Please note that today’s discussion may include certain forward looking statements. Therefore they must be viewed in conjunction with the risk that the company faces today. On the call we are joined by Mr. Deepak Joshi, Director Sales and Marketing and Mr. Abhishek Aggarwal, the CFO. I now invite Mr.
Deepak Joshi to present the company’s business outlook and performance. After which we will open the floor for Q and A. Thank you. And over to you, sir.
Deepak Joshi — Director of Sales and Marketing
Thank you, Garima. Good morning everyone and thank you for joining us to discuss the performance of Garware High Tech Films Limited for the third quarter of FY26. To start with, wishing you and your loved ones a very happy New year. Garware’s business model, true to its 90 years of heritage and innovation, integrity and customer first approach, remains resilient in the face of uncertain global macro conditions. Geopolitical volatility and successive tariff actions by the US Administration continue to pose a challenging environment for exporters. During the quarter we experienced the full impact of 50% tariff structure. The offtake was calibrated to maintain undisrupted supply chain.
Even in this challenging environment, GHFL largely maintained its uptake. Revenue declined marginally by 1.6% YoY even for 9 month FY26 revenue decline was limited to 2.4%. Our order book continues to remain robust despite a 50% tariff. The EBITDA decline has been contained at 7.4% on y o y basis in Q3 FY26 for 9 month FY26. The decline is around 8.3% primarily on account of tariff related cost absorption. Export continued to form a significant part of our business contributing 74.3% of total revenues for this quarter. Our Sun Control segment witnessed a strong demand. Our architectural film business continued to expand rapidly in all geographies including including Middle east and Indian markets backed by focused marketing initiatives and premium product launches.
Recognizing the growth potential in the Middle east market, the company has announced to establish a wholly owned subsidiary in uae. The new entity will manage trading and exports of films, ceramic coatings and paint protection film across the MENA region and other international markets. We also set up two of its kind Global Application Studio in UAE and we are in process of onboarding more partners across the globe to strengthen our brand equity. This strategic step meaningfully strengthens Garware High tech Film’s global footprint, expand export capabilities and enhances long term growth visibility in overseas markets. We had successfully doubled our paint protection fill capacity to 600 LSF in September 25th.
The capacity is ramping up as per the plan. The expansion has enhanced manufacturing efficiencies and unlocked additional capacity headroom for our future growth. The upcoming TPU manufacturing line which will be commissioned by October 2026 will further strengthen our backward integration and innovation capabilities with 25% of the capacity earmarked for new generation products. In addition, we launched Karware Home Solutions, a new D2C business vertical aimed at expanding our domestic footprint and cater to unmet consumer demand in the architectural film space. We opened our first GHS studio in Chembur in Mumbai. It is in collaboration with a local interior design firm and we plan to follow the same approach to increase our presence to all towns in India.
This platform will help GHFL directly engage with consumers and premium real estate projects while enhancing brand visibility and driving higher margin growth. Our Karware Application Studio Network which acts as a direct to consumer channel for premium PPF and glazing films continues to expand rapidly. We are targeting to cross 300 studios by end of FY26 and have already crossed 250 stores in Q3. This will strengthen our presence across Tier 1, Tier 2 and Tier 3 cities in India. Overall, despite external challenges, this quarter reflects GHFL’s resilience, adaptability and strong operational foundation. Our continued investment in capacity expansion, product innovation and brand building initiatives will ensure we remain well positioned to capture emerging opportunities and deliver sustainable value.
Stakeholders Value to Stakeholders. Thank you very much. Now I hand over to Mr. Abhishek Akrawal our CFO for financial commentary.
Abhishek Agarwal — Chief Financial Officer
Thank you Deepak and good morning to everyone. Let me now take you through the key financial highlights for the quarter ended 12-31-2025 for Q3FY26 our consolidated revenue stood at 459 crore compared to 466 crores in Q3 of FY25 reflecting an 1.6% year on year decline primarily due to the tariff related disruptions in the key export market. Despite this, exports remained stable at 74%. EBITDA stood at 86.7 crores compared to 93.7 crores in Q3 of FY25 showing a decline of 7.4% year on year. The EBITDA margin stood at 18.9% down only 118bps year on year, maintaining a healthy level despite tariff headwinds which have primarily been driven by cost optimization initiatives.
PBT came in at 73 crores down 9.8% year on year while the PAT for the quarter was 55.8 crores compared to 60.8 crores in Q3 of FY25 on nine month basis. The nine month of FY26 revenue stood at 1523 crores, marginally lower by 2.4% year on year while EBITDA was at 343 crores down 8.3% year on year reflecting the cumulative impact of tariff volatility on the balance sheet front. GHFL continues to remain debt free with a robust cash and liquid investment balance of Rs. 669 crores as on 31st December 2025. This strong liquidity position provides ample headroom for our ongoing strategic CapEx including the TPU line as well as future innovation and expansion initiatives.
Despite short term headwinds, GHFL continues to maintain a strong financial foundation, steady operating cash flow generation with new capacity additions, continued focus on value added products and improved manufacturing efficiency. We expect to gradually enhance our revenue, visibility and profitability in the coming years. Thank you all. Over to Garima.
Garima Singla — Investor Relations
Over to the moderator.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mahesh Bendre from LIC Mutual Fund. Please go ahead.
Mahesh Bendre
Hi sir, thank you so much for the opportunity. Sir, despite of soft quarter and the tariff issue, we were able to held on our gross margins really well.
operator
So sorry to interrupt. Mahesh, can you please speak a little louder?
Mahesh Bendre
Yeah, I’m audible now.
operator
Yeah, please go ahead. Thank you.
Mahesh Bendre
Yeah. Sir, my question is despite of such a soft quarter still our gross margins were not impacted that way for the quarter. So.
Deepak Joshi
Yeah, so normally like you said Q3 for us is a soft one because the seasonality, there is no sun. No sun control kind of theory we say. But we have been working on this because after the impact of tariff which was hit full of 50% in this quarter. We managed our operational efficiencies pretty to the best of our possibilities. I mean we went with lot of changes in for operational efficiencies. And plus the product mix which we tried to make keep it at a very high level. That means the more of a high end products.
So that’s how we were able to maintain the.
Mahesh Bendre
So the tariff that we are paying now, where it is booked it is in cost or is it in sales?
Deepak Joshi
It’s a mix of both. I mean we are passing some of it to our distributors, dealers. So which ultimately goes to pass on to consumer. But a very small fraction to end consumer. But some of it is passed on to our distributors and customers. Rest we are observing with our efficiencies, operational efficiencies and product mixes.
Mahesh Bendre
No, my question is, sir, suppose we were paying 100 rupees last year selling the product. Now because of the tariff the price has gone up. So that the incremental amount that we are paying as a tariff that is gone into what where that is booked in sales or it is gone goes into expenses.
Abhishek Agarwal
No, that so Mahesh, it has both the impacts, the increased sales price to our dealers and distributors. It reflects into our sales numbers. While the tariffs which we are paying that becomes part of our expenses.
Mahesh Bendre
Okay, sure. And sir, given the current outlook, I mean do you think. I mean. I mean we are trying to set up a new plant in Middle East. So when that plant will come up and that will have an impact in FY27.
Deepak Joshi
See, we have set up this subsidiary because our growth in Middle East, North Africa region has been been phenomenal. I would say we have doubled in one year the sale to Middle east region. So we need a strong subsidiary which can take all the contracts from big companies, local companies. Because especially for the architectural business, Middle east is continuously growing. And there is a need to block the sun, the heat in many cases. So the primary objective is to cater to that reason. Then the structure of duties from that subsidiary always makes it more attractive.
And third is, you know, with this growth, this is the ideal location for future growth. I mean we have like multiple objectives with this particular subsidiary in uae.
Mahesh Bendre
No, I mean when this will become.
Deepak Joshi
Functional, this, you know, there are like many steps to that. The one is like setting up which will be completed during this quarter, that is quarter four. Right. But the full impact of that might be seen in the later half of FY27.
Mahesh Bendre
Okay. And the tax for this will be zero. Like needle, right? In Middle East.
Deepak Joshi
Yeah. Because this is being set up in. This is being set up in free zone. So the tax to earn by that subsidiary is almost nil.
Mahesh Bendre
Sure. Thank you so much.
Deepak Joshi
Thank you.
operator
Thank you. The next question is from the line of Rahul Jain from Credence Wealth. Please go ahead.
Rahul Jain
Thanks for the opportunity. And sir, congratulations to you and the entire team at Karware. Given the environment for the kind of numbers we have been reporting. So just to add to the previous question, yes, the gross margins have remained flat and in fact they have improved year on year as well as quarter and quarter. And you explained that some of it is due to the product mix change. So firstly, this entire 50% tariff impact, has that been visible in this quarter? Quarter three. And from here on, how do you look at the gross margins going ahead?
Deepak Joshi
See first of all, yes, we have seen full impact of almost full impact of 50% tariff. But if you really see again we are controlling the sales. That means only absolute necessary product are being sold into the market to our distributors and dealers. Because in any case of any favorable decision we tend to gain that. So that’s the purpose of that. That’s why we said, I mean there is inventory into the bonded warehouses which can be at a click away whenever the need is there by our consumers now going forward. So full impact is there in Q3 now going forward the margins because this is, we are seeing if you see the Q3 margins versus Q3 margins.
So there is very less impact. So we think in Q4 and Q1 the margin should remain around 20% or so depending on the product mix. But we expect to that range. But if any good things from Supreme Court of USA or any trade deal happens even to 25% which we are hearing, this is all like all in public this thing. So there might be a removal of 25% against Russian oil or something. So that also will give us a big positive boost. And so scenarios are different. But Definitely in in main season the the this thing margins will improve and if anything goes away like 25% or so, we’ll definitely go between 20 to 25%.
Rahul Jain
Fair enough. And sir, with regards to the inventory at the customer level, the end customer level. Yeah. How is that situation currently I understand some of the channel checks in other industries key that is probably at the lowest end. So given the tariffs two scenarios let us put the tariff remains at the current level. So how do you look at the inventory at the customers level and thereby the sales growth going ahead for us.
Deepak Joshi
See if this remains there. So the margin like the sales volume is definitely bound to increase because still we have got very good numbers and we are keeping the inventory in the bonded warehouse. But now the season is coming. If you really see this quarter, it starts from the March onwards. I mean March sale reflects the seasonality. So sale will definitely increase. Right. That goes without saying because we are not losing any sales. We have protected our consumers from any I would say substantial increase in the. In the prices. So that was our end goal.
If you remember our last com calls we have always maintained that we will not lose any consumer. We will continuously to grow. So ultimately you are right that there has been a decrease in inventory into the chain from our. From our side between the consumer side there has been a decrease because we try to. We are expecting any good thing. I mean any trade deal or something will save us a good amount of money. Right. So that’s why we are trying to keep it at the lower, lower level. But if it does not happen, any deal does not happen, no decision comes into favor.
Still the sales growth will continue.
Rahul Jain
That means this year we can be around 2100 plus kind of turnover as what we have been targeting. And next year can we look at 15, 20% growth over and about 2100 at current tariffs of 50%.
Deepak Joshi
See again for that this we. I mean this is a subjective question that like we remain at 50% tariff and what happens because we definitely expect something better or some action from our end. But definitely these numbers what we are seeing is almost we are sales is stable despite all those challenges here in nine months, right. So we will be close to that number. We in fact this quarter can be stronger and it all depends on like how the. I mean if we feel nothing is going to happen we can release the goods and from us bonded warehouse which will reflect in our sale.
So we can reach to the numbers what we did last year because we are already at the same number in nine months.
Rahul Jain
Last question.
Deepak Joshi
When it goes, yes, given the scenario that nothing happens. But if you talk of the sales, definitely it will have a 15 to 20% CAGR growth next year. Because this year we have tried to curtail everything. But we’ll find other ways. We have, we have found or we are finding other ways to continue this growth. Right?
Rahul Jain
Sure. That’s nice to hear. And last question from my side with regards to the new PPF unit which has come in. So what is the current utilization and what kind of ramp up we see going heading next? Two, three quarters. Two to four quarters.
Deepak Joshi
Yeah. So PPF also like right now it is running around 65% utilization rate. And sorry sir, there’s new line.
Rahul Jain
I’m talking only about the new line.
Deepak Joshi
New line, I’m talking 65% capacity. Old line is running full. But the thing is that is again, again if you really see we are growing very strong in certain regions that is Middle East, North Africa, India and there is definitely PPF being a high value. If you really see the absolute price of PPF versus absolute price of sun control, PPF is at a much higher prices. Right. Absolute pricing. So the duty impact tariff impact is pretty high. So we are seeing some challenges from the US market. Despite that this capacity is right. Currently 65% utilized.
Rahul Jain
Sure. Thank you so much sir and all the best. Thanks.
Deepak Joshi
Thank you.
operator
Thank you. The next question is from the line of Viraj Parekh from Carnelian Asset Management. Please go ahead.
Viraj Parekh
Thank you for the opportunity. Am I audible sir?
Deepak Joshi
Yes.
Viraj Parekh
Yeah. So the first question is probably if you would give me some insight on this quarter’s growth in terms of us and non us and also 9 monthly for us and non us growth.
Deepak Joshi
Yeah. So us is like. I mean same quarter. If you see last year there was almost 40%. 43, 44, 4% was sale was to us. This I mean this year, I mean Q3 FY26 it is around 40%. So there is a marginal 3% drop. But that all has already been more than that is already there in the warehouses to be sold. I mean against orders. So real sale will see a 3% degrowth in this market, in US market. But in absolute terms it has grown because we have dispatched the material against order, but not yet.
I mean it is in the bonded warehouse and waiting to be invoiced. So that’s why we have maintained, like I have been saying, we have controlled the sales to avoid any impact. So 43 and 40% then if you talk of other geography like Middle east was used to be around 4% last year it has crossed 8% already in nine months. Right. And EU has been stable around 10 to 11% and India around 25%.
Viraj Parekh
So you said Middle East, EU and India numbers are for nine months, right?
Deepak Joshi
Yeah, three months. Three months. You asked for the last quarter, so I’m giving you last quarter.
Viraj Parekh
Right. And so what would be the nine month number?
Deepak Joshi
So just a second. Yeah, numbers are similar because we have started seeing this kind of trend since if you remember the March, this tariff thing started. So almost the same numbers.
Viraj Parekh
Got it sir. Just a follow up on the previous.
Deepak Joshi
I mean you can ask offline but the numbers are similar. So I gave you absolute exact numbers of Q3 versus last year.
Viraj Parekh
Sure sir, I’ll take it offline. This strategic understanding. If I wanted to understand on a previous participant question he was asking in terms of the inventory at the channel level in you know, different geographies since Q3 was the first quarter with 50% tariff at strategic level, how are we looking at production in a normal versus a tariff environment? At what kind of inventory levels are we maintaining in a normal versus tariff environment? So just wanted to understand that like what is the range between the two? How have we pivoted to navigate the tiles? Because you know we’ve been doing an exceptional job with our margins.
Deepak Joshi
Yeah. So if had there been no tariffs. So our inventory levels remained roughly one month in US and around one month in transit. So it’s like a 60 days inventory. You can say at, at our warehouses plus in transit from India. Right. So this ranges between I can say 60 to 75 days. Right now if you add everything. So this goes almost, I can say around 100 days. I mean it’s like you can just see 60 days versus 100 days. So there is like 30, 40 days more inventory is lying with us in the warehouse.
I mean transit remains the same only in the warehouse inventory has been increased and that has been done purposefully.
Viraj Parekh
Got it. And how are we looking at the production levels? I mean capacity utilization across the lines in a tariff and non tariff environment.
Deepak Joshi
Yeah. So now in case of like current situation, so India, I mean the, the manufacturing and everything lines are running full and having like we, we are not changing anything at the, at the level of production because order flow is good and lines are being utilized at optimum level. However we only control at the customer as at a warehouse level in usa as I told you, the aim was not to lose any customer customers. So all the orders are there. Only release of the material just to, to see any kind of gain in 30, 40 days will fetch us additional revenues.
So that’s why we are keeping it like that. So 30, 40 days more inventory at the warehouse level. However, factory is continuously producing as per the requirement because we, we are, we only produce against the orders. And we have, we have enough orders for this quarter and going forward.
Viraj Parekh
Just to follow up on that, you know, currently growth is a little bit muted, you know, because of the tariff situation. If we are maintaining a line that’s full, you know, for the, you can say last one and a half quarters, there would be some time where, you know, production would kind of reduce if the tariffs don’t go away anytime soon over the next two quarters. So that time would we have to revise our strategy or we continue in the same thing? Because your anticipated demand growth is strong. So despite 100 inventory levels, you’re seeing growth at 15, 20% for stronger Q4 and Q1.
Deepak Joshi
Yeah. So like I said, there are some other alternative ways are being worked where, you know, if we can mitigate the impact of this tariff, but at the same time, even if it continues, we are maintaining the margin like this quarter. If you see being the seasonally low quarter, we have almost touched, I can say close to 20%. Right. So given a situation like this remains and nothing else happens, of course there will be many factors will change. Geopolitical situation, tariff situation and our situation to cater the market. So there will be all three places there will be definitely some changes.
Right. But let us assume nothing happens. Like nothing changes still are. We will maintain a growth of 15 20% because we’ll not hold inventory in, in, in our warehouses. We will do whatever sales naturally happening which will, which is at the rate of 15 to 20% CAGR. Right. So why do we curtail than our productivity will continuously grow because we are still making margins on that. [Ends Abruptly]