Garware Hi-Tech Films Ltd (NSE: GARWARPOLY) Q4 2025 Earnings Call dated May. 15, 2025
Corporate Participants:
Unidentified Speaker
Deepak N. Chawla — Non-Executive Independent Director
Abhishek Agarwal — Chief Financial Officer
Analysts:
Unidentified Participant
Vikash Verma — Analyst
Mahesh — Analyst
Nikhil Kanodia — Analyst
Ashish Kumar — Analyst
Saransha Gupta — Analyst
Viraj — Analyst
Manish Ostwal — Analyst
Nitin Gandhi — Analyst
Ankit Gupta — Analyst
Ashish — Analyst
Aditya — Analyst
Aman Vij — Analyst
Pratham — Analyst
Dhwanil Desai — Analyst
Vinay Nadkarni — Analyst
Harsh Mulchandani — Analyst
Mihir Dhami — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Garwari High Tech Flames Limited Q4 and FY25 earnings conference call. As a reminder, all participant lines will be in the listen only mode and. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call please signal an operator by pressing star then zero on your touchdown phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vikas Verma from Envy. Thank you. And over to you sir.
Vikash Verma — Analyst
Thank you, Steve. Good morning everyone. Welcome to the quarter four and FY25 earnings call of Garware hi Tech Films Limited on behalf of the company I would like to express our gratitude to each of you joining the call today to discuss the performance of the company and to answer the questions we have with us from the company. Mr. Ms. Aspul, Director Technical. Mr. Deepak Joshi, Director of Sales and Marketing and Mr. Abhishek Agarwal, the Chief Financial Officer. Before we begin, I would like to draw your attention to the fact that today’s discussion may contain forward looking statements that are subject to various risks, uncertainties and other factors which will be beyond management’s control.
We kindly request that you bear in mind there may be uncertainties when interpreting such statements. We will now start the session with opening remarks from the management team. Afterwards we will open the floor for an interactive Q and A session. I would now like to invite Mr. Deepak Joshi to make his opening remarks. Over to you, Mr. Deepak.
Deepak N. Chawla — Non-Executive Independent Director
Thank you, Vikas. Good morning everyone and thank you for joining us today to discuss the financial and operational performance of Garware High Tech Films Limited for the quarter ended and full year ended 3-31-2025. Let me begin by sharing a brief overview of our financial achievements.
We are proud to announce yet another record breaking year for GHFL. In FY25 our annual revenue crossed the landmark of rupees 2000 crores. We achieved the highest ever revenue of 2,109 crore. Making a 25.8% growth year on year and a record high PAT of rupees 331.2 crore. This performance reflects our relentless focus on growth, innovation and creating value for stakeholders. This success was driven by the strong growth in sun control window films and paint protection films supported by stable performance in our Industrial Product division. Let me take you through our sun control window Film division.
This division recorded an impressive 37.6% growth from full year driven by expanding market reach. And new product introductions. This performance was further strengthened by well developed market network, our entry into new geographies and the successful launch of innovative products such as Automotive Rooftop Series, Spectra Pro, Deco Vista and many other value added products. In the architectural segments, we remain focused on leveraging these opportunities to drive future growth across both domestic and international markets. We have further enhanced our global presence by actively participating in exhibitions, distributor conferences and strengthening our digital marketing efforts. In addition, we have increased our penetration in Middle East Europe and East Africa which is opening doors to significant growth opportunities.
To drive growth in the architectural segment, we have established a dedicated business unit with specialized teams across key regions. Furthermore, we are planning to introduce Garware Home Solutions, a one stop solution for all film requirements for residential spaces. While this initiative is currently in its early stages, we plan to scale it up to full capacity in the near future. Ahead, we expect continued strong demand globally for both automotive and architectural films. Let me continue with the paint protection film. It continues to deliver consistent results operating at optimal capacity in FY25, the PPF business achieved 25% revenue growth year on year supported by increasing demand both from international and domestic markets.
I am happy to share that we launched our colored paint protection films last quarter which has already received encouraging traction from customers and are poised for even stronger growth going forward. We see strong potential in our newly launched products, particularly colored ppf, headlight and tail light PPF and the broader PPF range as they continue to gain market acceptance. We are also pleased to report that the work on the second PPF line is progressing well and remains on track for completion by Q2FY26 last quarter we had also announced an investment of rupees 118 crore for the first of its kind TPU extrusion line at our Waluz plant.
This facility with a capacity of 360 lakh square feet per annum is expected to commence production by October 2026. These investments will further enhance our product portfolio which now includes colored ppf, PPF plus, premium, titanium, matte, black and white variants allowing us to serve a wide range of customers across different market segments. We continue to actively invest in research and development to explore new product opportunities and strengthen our offerings. With these capacity expansions and product innovations, we are confident of sustaining the growth momentum in our PPS segment. Let me talk about Industrial Product Division. The IPD division delivered a stable performance and has recorded a 15.1% increase year on year.
The shrink film segment contributed meaningfully driven by steady demand in specialty applications. We are continuously innovating and as mentioned last quarter we received a patent for floatable shrink film reflecting our focus on sustainability and technical advancement. This performance helped us offset softness in commodity packaging films. We remain committed to improving this segment through product innovation and operational efficiency. We have a strong global distribution network and established sales channel resulting in significant growth in Europe, Middle east and Central and South America. USA is one of the major export markets and and we are closely monitoring the evolving tariff landscape under US Trade policies.
However, we remain confident of growth across all geographies with our value added differentiated products which have been recognized as the best in class. We leverage our state of the art nano dispersion and other cutting edge technologies to maintain our market leadership worldwide. With this I now request Mr. Abhishek Akrawal, our CFO to take us through the highlights of the financial performance. Over to you Abhishek.
Abhishek Agarwal — Chief Financial Officer
Thank you Deepak. Good morning all. I’m delighted to report that this year marks the first ever highest revenue and cost of a tax along with strong operational performance. For the full year FY25 our revenue crossed 2000 crore milestones and stood at 2109 crore reflecting a 25.8% increase over 1677 crores in FY24. This is in line with our guidance provided in the previous quarters. Our Net Pat reached 331crores which is again the highest of our profitability as compared to 203 crores which we did in the previous year. This strong financial performance was driven by sustained growth momentum across our ppf, semcontrol and IPD business divisions.
For the full year, EBITDA stood at 495.5 crores up by 54.3% year on year basis our yearly impact stood at historical high of 331 crores. This is up by 62.9% year on year. For the quarter the revenue stood at 548 crores recording a sharp increase of 22.7% year on year which was backed by strong business performance across all the business segments. For the quarter, EBITDA stood at 121crore up by 35% year on year and the PAT stood at 77.8 crores which was a growth of 34.6% year on year. Approximately 77% of our revenues in FY25 came from export and around 80% came from validate firms.
This positions us for superior growth within the industry. I am pleased to report that beyond our impressive quarterly growth we have maintained an exceptionally strong financial position. Our balance sheet was zero net debt and a healthy cash reserve of Rs. 650 crore. The robust financial standing allows us to confidently invest in future growth opportunities. Furthermore, we have witnessed a significant improvement in the key financial metrics. This year we achieved an ROE of 27.2% and ROE of 20.6% excluding the revaluation reserve. This figure demonstrates our efficient utilization of funds generated by our business operations. Additionally, we have also managed our working capital efficiently and have kept our collection days at just seven days.
This restricts our ongoing commitment to operational excellence and efficient cash flow management. In conclusion, at Karwari High Tech Films we are committed to offering value added products, the customer centric approach and a strong product line which has driven our PAT above credit crore for the year the very first time. We remain confident in continuing this growth momentum and dedicated to delivering value to our stakeholders. With this, I’d like to thank you for your continued support and we can now open the floor. Questions and answers. Thank you.
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 withdraw yourself from the question queue, you may press STAR and two participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Mahesh from LIC Mutual Funds. Please go ahead.
Mahesh
Hi sir. Thank you so much for the opportunity. Sir, you mentioned that there are two expansion plans are coming up. This year and next year. So based on this and market outlook, what kind of growth we are anticipating for FY 26 and 27.
Deepak N. Chawla
Yeah. Thank you Mahesh. So as the guidance given for FY26 2500 crore of revenue we are confident to achieve for FY26 and for FY27 we expect a growth of 20%. 20 to 25% of the of CAGR. Of course this is backed by the expansion which is starting from Q2 this year. To be precise, September 2025, the second PPF line is starting and this is on track. Everything is going well. In fact we can start little early also. So the expansion is on track. And regarding the second expansion of second capex of TPU which is expected to start in October 2026.
This will be mainly for the margin improvement. There will be some revenue out of it but mostly the margins, I mean operating margins will improve. Because this will be a full backward integration for our PPF line backed by, I mean strong RNG and new product developments which we the STPO line will. Help us for that.
Mahesh
Sure. And sir, for FY25 we reported around 21% kind of margins slightly lower than that. So over next two years, given this kind of growth of 20% CLGR, what kind of margins we are looking for.
Deepak N. Chawla
Next two years on margins we expect to remain like in the range of 23%. I mean like we gave the guidance of 25 plus minus 3% this up and down depending on the seasonality will happen. But we are confident to achieve between 22 to 25% without an issue.
Mahesh
Okay answer. I think 77% of revenue comes from the export side. So I think we have exposure to us also. So in terms of geography diversification, any steps we are taking to reduce our dependence on any particular country or any.
Deepak N. Chawla
Particular geography see we are spread all across. And of course one of the major market or major market is USA. So there are two things. One, the current challenges of tariff which is 10% additional has been implemented. So with this we don’t see much of the, I mean challenges on that because this is somehow we have managed and it has been, I mean taken care of. So with this we don’t see like a major challenge in achieving our top line and bottom line. But we have strongly, like I said in my opening remarks that the efforts in key geographies other than USA are growing very fast.
We have added new resources in Europe market which is growing very fast for us. And then Middle east is one of the area which is growing very fast where architectural segment and automotive segment are important. And we expect to grow very high on these markets like growth, more than 50% growth, growth in these markets because we have added new teams there and we are targeting the customer base of our peers and we have been successful in doing so. So Europe with new team there, additional team there, with Middle east, new team there and East Africa.
So everywhere we are putting a lot of effort, adding new manpower and that is giving us good results.
Mahesh
Sure sir. Thank you so much sir.
Deepak N. Chawla
Thank you very much.
operator
Thank you. The next question is from the line of Nikhil Kanodia from Monarch Network. Please go ahead.
Nikhil Kanodia
Hello. So I’m audible.
operator
Yes sir.
Nikhil Kanodia
Good morning sir and congratulations on the great set of members. So I had one follow up question. So you mentioned about the T2 capacity that is coming in by Q2. So what kind of margin improvement can we see from that capacity?
Deepak N. Chawla
So you are talking of TPU right?
Nikhil Kanodia
Yeah, yeah.
Deepak N. Chawla
So we expect 1.5 to 2% betterment in the margins. I Mean this is rough estimate but 1.5 to 2% percentage margin on company level.
Nikhil Kanodia
Okay, so the next question is on the US so after this the 90 day period ends in July. So what sort of strategy call are we taking? Are we looking at having some capacity in the US or maybe something else? If you can throw some light on the US business as it contributes around 50% of the top line.
Deepak N. Chawla
Yeah, on USA like I said we expect like, I mean we cannot comment on the trade discussions going on but we, we understand from the media that that is going on. Well, but in the worst case scenario as well we have plans where we are working with some of the, I mean players in USA to counter the impact if there is any. Right. And as I said other geographies like next to that it’s South America, then Middle east and Europe and Africa and we are expecting a very strong growth there this year and we added manpower in those geographies.
Right. And there are many products which, which is exported to usa but then it goes to different geographies and we have plans to do that directly from India. So all those strategies are there. I mean please be assured that we are doing every bit to, to have that kind of, you know, we have a plan of, you know, whatever if it is worse scenario, we have planned for that as well. Otherwise we expect things to remain better for us. Because if you talk of these kind of tariffs, so like for example there is a country called south, sorry, South Korea has had zero tariff to US now they are 10%.
Similarly India has 10% addition similarly China it was so unpredictable that it went now still it is between 30 to 35%. So if you really see the US manufacturer they import, we have studied well that their, I mean components or something, some of the component has got some kind of origin which is related, which is not in usa. Right. So all those factors are keeping the prices of cost of each manufacturer to go to high to some extent. And we being fully vertically integrated, backward integrated where we manufacture everything, we have a big advantage of cost where we can further go down and compete in those markets.
So we have like multiple pronged strategy in terms of what our peers competitors are doing, which countries, what kind of tariffs are there and what product line we can push more. And last and the the strongest point that we are fully integrated so we have much more leverage which will come into play whenever such situation arises.
Nikhil Kanodia
Okay, so two follow up questions on that. So number one, are we planning to have any manufacturing capacity in the U.S. that’s number one. And number two, like from the industry point of view, other than India, which geographical regions like would be supplying to us the PPTF and the SEF.
Deepak N. Chawla
Okay. On, on the first one we are working but I can’t divulge as of now we had meetings during our recent visit to USA so that these deals are under discussion and under NDA. So I mean, I mean we can, we can not comment at this moment which may happen, may not happen. So that is point number one. Point to you said. Sorry, I didn’t get the second question.
Nikhil Kanodia
Which geographies. So apart from India, which all geographies would be supplying the PPPF and the SEF in US like for example.
Deepak N. Chawla
Yeah. So only two countries are very strong other than India. So that is China and Korea. And both have been like there is a tariff implication from the earlier level. So there has been an increase of 10% from the past levels on both the countries.
Nikhil Kanodia
Okay. And China and Korea would be more on the economic range or the premium range.
Deepak N. Chawla
See, I can say with our strong product portfolio and nanotechnology and everything, our product comes into very superior range, global brand. Right. And if we talk of the these players from China and Korea, they are to the lower end, they do not supply the kind of quality which we supply to US market. So the market still remains in favor of our products because they are very high quality products and they come with lot of advantage. And the aging of these products is kind of lifetime, 10 years to lifetime. So our products are very superior as compared to the peers in China and Korea.
Nikhil Kanodia
Okay. So thank you. And so if I may squeeze in, I have one more last question. So that is like one of the competitor has also announced PPF and SEF capacity in the market. So how do you see that and what sort of right to win do we carry when we compare both the companies?
Deepak N. Chawla
Yeah. So there are more than 50 producers in China and Korea who produce the products through chip dyed and glue dyed method. Right. And whereas our products are deep dyed products. So the basic difference between us and them is very big. And since there are 50 companies, if there is a 50 first comes into India or any part of the world. So there is a big, I mean I would say kind difference in the quality. So we do not see any challenge because as I said, I mean for 50 to 60, if they are not able to, I mean I would say the segment is very different.
What we are talking to them in Sun Control on cpf. As I said, we have a big advantage of, you know, like we have been there now since last five years and we have our own components other than tpu. And TPU is also being been planned as a strategic benefit to the company. So we are much, much ahead than anyone who wishes to enter into this market.
Nikhil Kanodia
Okay. Because this one is a domestic player with specialization in Bopp and they have announced the premium range into PPF and sef. So you don’t foresee any challenge or change in the market dynamics, right?
Deepak N. Chawla
Yeah, we do not. See, as I said, the product quality is very different and the segments which we play and they might be playing is very different.
Nikhil Kanodia
Okay, sir, thank you for answering the questions and all the best for your future quarters.
Deepak N. Chawla
Thank you very much. Thank you.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit your questions to two per participant as there are several people waiting for their turn. The next question is from the line of Ashish Kumar from Ampersand Capital. Please go ahead.
Ashish Kumar
Yeah, hi. Thanks for the opportunity and congrats on a good set of numbers. My first question is on your product portfolio. So how would you compare your product portfolio compared to the competition in the market? Like are we the innovators in the market who are bringing new products to the market or are we like trying to fill up the gaps that we have in our portfolio? And, and how do you see it going forward? And the second question also is on the new product launches that we have done this quarter as well as what we plan ahead.
How do you see these particular products like in terms of growth and margin going forward? Thank you.
Deepak N. Chawla
So I mean to answer the first question, if you go back like before our, this capex expectations pension started prior to 2020, I would say, I mean Garware was primarily, I mean catering to the market which was automotive driven. That means we were very well known in India and rest of the world and US market as an automotive supplier for cars and mostly into I would say automotive segment. Right. So and we had a very strong name into that with the introduction of new product line like PPF which is primarily driven into automotive. And then the architectural segment of sun control film which has started after the commissioning of new lamination line.
Right. So we are now, I mean we have, first of all we have completed the product portfolio which were missing in architectural sector segment. I mean we had like if there are five main product lines supplied by the biggest peer in India from usa. So we have completed the full product line. Right. We made a full team for architectural products. We developed all the product lines which were required for that with this we have now surpassed the biggest, you know, seller into India from, from. I mean the, the multinational company which is number one in architectural segment in India.
So we have become by volume, we have become number one in India market by surpassing them. And this has happened because of new team, new product introductions. Right. So we have the complete set but there is now the company’s vision from current product portfolio to a next line is to become a solution provider rather than a film supplier. Right. So these things is basically comes into architectural segment where you know you need to give the full solution to the building where the glass is handled with all the applications and with your film. In that line we have announced a garware home solutions especially for the residential segment where we’ll be catering all the, I mean requirements of the metros to start with and then go to wherever possible.
So if you, I mean if you talk of our company’s positioning, first we completed the product lines, then we entered into the new products which are not available with any of the multinationals. Right. And now third we are going into the territory where we will be a solution provider for the industry. So our growth from, from B2B to B2C now direct to customers, that’s what we are planning going at. So we have now complete product portfolio and we are going to the product portfolio which is not even there for. Not only in India for the US market we are doing all those products.
Ashish Kumar
Yeah, thanks, thanks. That’s very clear. My second question was like you have answered it partly with respect to overall growth and margins but the new products, are they more in the premium category? So should we expect it like higher margins from them? That’s, that’s what I wanted to know. Yeah.
Deepak N. Chawla
So on the, on the second, see first of all if you see overall company’s margins. So I mean again I will go like five years back where our industrial product was 65% of revenues and consumer product of 35% only. Right. As we speak we are around 65 to 75 rather 70% on consumer product division and only 30% on industrial product. Right. So going forward again there is a big expansion which is September coming for PPF. This will lead towards 80% of the consumer products, only 20% for the industrial product. So margins are anyways we are expecting to go better.
I will not go into each product portfolio in consumer product but you can can imagine like a big shift towards like 35% to now 70, 75% in consumer product in any way in margin driven thing which we have seen like we show in the slide we were like a 9% of EBITDA margin. Now we are at the level of 23, 24%. So this is happening on a broad level in the product lines. Whatever we are adding now, they all are high margin products. So I mean we will continuously get into more high driven solution providing products.
And the TPU line which will add next year, October 27th will. Sorry, October 26th will also add two margins. So addition everything from here or has been in last four, five years all on the products which are high margin and niche products.
Ashish Kumar
Yeah, thanks. Thanks. That’s very clear.
operator
Thank you.
Deepak N. Chawla
Thank you very much.
operator
Thank you. The next question is from the line of Saranj Gupta from Swan Investments. Please go ahead.
Deepak N. Chawla
We are not able to hear you clearly.
Saransha Gupta
Hello. Am I audible now, sir?
Deepak N. Chawla
Yes, yes it is. It is clear now.
Saransha Gupta
Yeah. But I want, I just wanted to know that how much does US and other regions devote to our revenue or if you can give us a ballpark number.
Deepak N. Chawla
Yeah, can you just. It is in the presentation but I’ll just explain that as well. Right. So. Yeah, so in Last financial year 48.5% came from North America, 1.1 from South America, 10.5% from Europe, 3% from Middle East, 1.3 from Africa, 23% from India and Far east and rest of Asia 12.3% and Australia, New Zealand 0.2%. Right. So this is broad. So we are present everywhere with like North America being 48%. But this year we are expecting to grow in Europe, Middle East, Africa, India, most of the geographies our growth will be because we have seen that trend in last six months where we have added new manpower, added new products as well, new and innovative products in this season because our product line is different from different geographies.
Every geography has a different kind of requirement depending on the temperatures and the climate conditions. So we are focusing more towards other geographies and we expect to give good results in other than US market as well. Hello.
Saransha Gupta
Very clear. Yes, yes sir, very clear. And sir, one more thing that as this tariff we can see, so can we see a demand impact happening through us or some other reasons.
Deepak N. Chawla
Some other reason? Definitely demand will grow because we are growing with that. See the only fact which I can see that, I mean now this USA China thing has come to some conclusion. So the otherwise many economists were experts expecting a kind of, you know, recessionary trends into the world. But with this thing happening, I think that challenge will go away. Right. So in that scenario we saw a good growth of in Q1 in America. Q1 means January in calendar year in US market in the auto numbers. Right. So we expect that to grow and with like a minimal tariff of 10% additional to India.
It is similar to all other countries like as I said, South Korea and China being the other two. So we don’t see much of the challenge because many US producers are also using components from other countries. So there is impact to everyone. But that is like, I hope that will be easily passed on.
Saransha Gupta
Yes, very clear. So just one last thing. As you said that the TPO expansion will help us increase our margin by 150 to 200bps. So from the current facility, do we have any operational leverage that can have an impact on the margin?
Deepak N. Chawla
You mean other than TPU plan, do we have advantages on the cost?
Saransha Gupta
Yes, sir. Yes.
Deepak N. Chawla
Yeah. So as we said, there are components and PPF which we started manufacturing since 2020. But I mean it takes time, so one, one and a half years to put one product, one component into that. So as we speak we are almost done with all other, all other components, I mean all components other than tpu. So that impact, that benefit of the cost is slowly and slow coming into, into the pps.
Saransha Gupta
All right, sir, thanks so much.
Deepak N. Chawla
Thank you.
operator
The next question is from the line of Viraj from Canadian Capital. Please go ahead.
Viraj
Thank you for the opportunity. Am I audible?
Deepak N. Chawla
Yes.
Viraj
Yeah. Hi, sir. So a lot of questions have been asked about the export market, but just something about the domestic market where you’ve been investing on the Garware application studio. So if you could just, you know, elaborate how the Indian market is done in terms of our CPD and IPD division for the year. And how are the, how is that investment in opening more and more studios standing out for us? If you can give a bit more, elaborate on a strategy for the Indian market going for FY26 as well. Yeah.
Deepak N. Chawla
So I mean I’m really happy once again to share that the domestic market has been like last year. It has grown almost 50% revenues in the domestic market put together for automotive and architectural and which includes window films and PPF as well. So that has been a phenomenal growth in the domestic market given we have set a very high benchmark for ourselves in automotive industry. Right. So I mean this has been a growth for last year and going forward in FY26 we expect another 30, 40% growth overall for the domestic market. And this is actually driven by the strong brand presence of Garware.
So that is the very strong point. Then the digital media campaigns and the FM campaigns and all other, you know, growth drivers. And one of them, the biggest one is the Garware application studio which is close to 200 as we speak. So you can just imagine like, you know, I mean every Garware application studio doing some PPF business and some safety, sorry, some control business. It’s more multiplies by the sum, multiplies by 200. So that’s the strength of the penetration all across India. And we are proudly saying that even the small villages of Jammu and the interiors of Lucknow, I mean in up Gorakhpur, Lucknow, in MP Chhattisgarh, Raipur, then all those, I’m talking just giving example of smaller cities where this presentation presence is there.
So that means our, I mean presence in India is kind of every nooks and corner. I mean even we, one of the growth areas has been, you know, the northeast for us like the seven sisters has also grown to this growth, has contributed to this growth. So this makes us really happy that we are not only growing in the metros but also growing on the small, small cities of India. So what is helping us? We have like many social media influencers who back us then. Digital campaign has been very strong. Name brand itself was strong.
But on top of that the activities which we do all across India and number of guesses has been continuously growing. And lastly the campaign of training people, people, it’s still going on. Now we have 10 now we have 1000 trained PPF applicators and window film applicators in India and that number grows and we proudly say that they are our brand ambassador across India. See anybody wants to put a film on their car. So they have been trained by Garware say that is their loyalty that they propose Garware. So the plan again is like the growth has been around 50% last year to domestic market and it continues to grow 30, 40% for the next year as well.
Thank you. I hope I answered your question, Mr. Viraj.
Viraj
Yeah sir, just a follow up. Do we keep some kind of data point as to how many cars on which we applied PPF? Between 23, 24 and 25 from our Garvara application studio. And how that number has been growing.
Deepak N. Chawla
See on PPF the growth has been roughly 25% as a whole in the company and similar in the domestic market as well. Right. So I mean as I bifurcated as well that growth in PPF has been around 25% and growth and sun control window films has been around 50 to rather 60% growth has happened in the sun control films on automotive last year. And almost 90% has grown on the architectural segment. So I bifurcated all three segments for you in India. 25% for PPF, 60% for automotive window films and around 90% for architectural windowsills.
Viraj
Right, thank you. And just the last question before I get into. I saw that we launched a headlight and a tail light protection film also this year for the automotive segment. I wanted to understand for the differentiating factor. I mean I’ve been using TPF on my own car. At least there the fin which covers my normal car body. The applicator applied the same thing for my headlight and my tail light. So is this something different compared to what the normal overall PPF it is being done? If you can show some light on.
Deepak N. Chawla
The product, I will request Mr. Archul to explain that it’s a very different. Yeah, these are two different fins for fine and tail light. It is light colored film. So the basic reason for applying is to protect the acrylic or polycarbonate body from yellowing. And so it has to block some visible light as well as total UV light. So these are two different films. Yeah, I will. I mean just as a. I mean from Garoare, the name itself says a strong. You know the brand where whatever we say if we are launching a headlight and tail light it means it’s a different product.
Otherwise we would have just gone by that. And this headlight, taillight not only in India and we are seeing a very strong demand from Middle east and USA where people are, I mean understanding its benefit. It gives a great aesthetic and a protection because whenever a car runs very fast in Middle east and US market in US geography then stone chip and all those things are quite fast at a very high speed which normally damages the outer of the outer of the headlight and tail light. And this film protects that with that and at the same time giving a very good aesthetic look to the car.
Viraj
Right. So my question was that the current film.
operator
Sorry to interrupt. Mr. Viraj, could you please come back in the queue for further questions?
Viraj
Sure.
operator
Thank you. The next question is from the line of Manish Otswal from Nirmal Bond. Please go ahead.
Manish Ostwal
Yes sir. Thank you for the opportunity. Most of the question answer only. I have only one question on the slide number 11 where we have launched the portal for US market D2C. So my question is what is the size of opportunity for us and can you paint us the picture for two to three year this revenue potential for. Belvar High Tech on that initiative.
Deepak N. Chawla
Yeah See PPF being like expensive product and it’s a very high class expensive product and when we make the quality becomes supreme. So when the distribution network goes to like you know distributor and then to dealer and dealer to final consumer. So being that value added it’s very difficult. Everybody keeps stock with a high value then adds margin. So to overcome this situation we have launched our E commerce platform where even the pricing are fixed. It’s like any of a big portal where you go there and you just put the quantity of ppf. The price will come, you pay online and the roles are delivered to the customer directly.
So this D2C model has like just implemented three months back. But we are, we are getting very good response of that where I mean as compared to what we were doing in the past. And this is in line with the culture of DIY in USA though it is not 100% DIY. I mean their applicators is definitely required but what happens is is the people take advantage of the brand global and they directly order from the portal. So this cuts down the requirement of the distributor, dealer and all and gives us good margin to the company as this is in a very nascent stages.
We launched in two, three months back and now we are seeing good movement in that if you talk of year from now see the growth of the company like we said we have been growing like for a CAGR of 20 to 25% so all growth because we count that we have become on a specialty segment all the products being special and the growth has been phenomenal over the years. So all those growth like this TPF from USA market, architectural segment, Garware home solution, everything put together we expect 2500 revenue guideline to achieve 2500 guideline in FY25 and similar way the similar FY26 sorry and similar way this growth momentum will continue with all those efforts.
If I tell separately how much it is growing I can say the growth we are expecting to be very strong. But numbers as of now I can’t give but the margins and the numbers growth is going to be really good on that.
Manish Ostwal
Okay. And sir, with your revenue guidance so how much capex we will be doing for 2627 to achieve our revenue target.
Deepak N. Chawla
Yeah. So with current these things 400 to 500 crore revenue guidelines growth this year and next year. So this is actually will be helped by the new PPF which is coming in October September 25th and the another one we have already done for this thing of TPU which will come on. October 26th and beyond that we are now looking into the impact. We are now looking into not impact. I mean we are now looking into the. I mean headroom available for us. Like I’ll just explain you in another way that this year I mean FY25 utilized 133% of PPF.
Right. And around 70% of of new lamination line. Right. So when new PPF line comes, so there will be a 70% headroom available for that line which we will fill in one or two or two years. Right. Then there will be some headroom available for window films. Because PPF goes to PPF line because of the fungibility. So now ultimately what will happen that October, November, December there will be another cycle of understanding. Internal meetings for the growth drivers. And then we’ll decide on that. But we will maintain this CAGR growth of top line 20 to 25%.
Manish Ostwal
Okay sir, thank you very much. And all the rest for the coming.
Deepak N. Chawla
Thank you. Thank you.
operator
The next question is from the line of Nitin Gandhi from Inner Quest Advisors. Please go ahead.
Nitin Gandhi
Thanks for taking my question. Can you share a revolution reserve figure? That’s the first question. Sorry, Revaluation reserve. Ah.
Deepak N. Chawla
Okay. Mr. Agrawal, our CFO will answer the question. Yeah.
Abhishek Agarwal
So our evaluation reserve is about 700. 764 crores. 764 crores.
Nitin Gandhi
Okay. Thank you. And the second question is what is the peak revenue at optimal capacity after the second line goes live?
Deepak N. Chawla
Ah. So after the second as we said that will add around 400 crore of revenue. But that will be a step wise. So we can say like the 33% additional which we made this year from a fungible line of sun control that will now be produced after September will be produced on PPF line. So overall the revenue will go to 450 crore estimated. But that will be step wise. That’s why again I’m maintaining that there will be. I mean the growth drivers will be like PPF additional volume. Then architectural business in India and usa additional additional business from Middle east and Europe.
Right. And additional business from D2C market of PPF. So put together we are targeting 2500 crore this year. The FY26. And another similar kind of growth for FY27. So this all will be like five different buckets will add to this.
Nitin Gandhi
So that’s the peak revenue potential from the existing capacity after the second phase also. Right.
Deepak N. Chawla
That’s what you’re saying in phase I think we can reach around 3,000 crore. That’s with fully Utilization of window film line, I mean lamination line and the second PPF line. See if you add that will be 3,000 crore. And then with the TPU plant coming in we have plans for diversified new product lines which is which we are working. We have like four, five options and we will zero in for one or two options which will be like. See we explained about we did not just go for TPO line to be a backward integration for tpu but there was more.
I mean we wanted to diversify into architectural and automotive segment beyond sun control and ppf. We are looking into new product lines from TPU which might go into little bit to medical, little bit to automotive and little bit to architectural segment where the requirement will go for other glass applications. So these things, this is like broad thing which I explained right now. But behind this we are working, we are zero in, zeroing in on which product line we will go in FY27 and FY28. But definitely our aim is to diversify in the businesses to sustain this growth momentum not for one or two years but for coming five years.
Nitin Gandhi
Okay, thanks. What’s the amount spent in the second line of EPF?
Deepak N. Chawla
EPF it was 120. 130 crore.
Nitin Gandhi
Thank you very much.
Deepak N. Chawla
I mean to be precise. 130. Yeah. 130 crore.
Nitin Gandhi
Thank you.
Deepak N. Chawla
Thank you.
operator
The next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead.
Ankit Gupta
Thanks for the opportunity and congratulations for a great set of numbers on the new PPS line which is coming in October of this financial year. Have we tied up with any of our existing or have we added new customers, you know for like you know licensing and then some capacity.
Deepak N. Chawla
The these any such agreements are under strong non disclosure agreement. Right. So cannot comment on that. But we have put the line with some kind of forecast and agreements something we have done. So we are like one. One simple thing is FY25 we ran the line, I mean we had a production of 133% of the capacity. So that was 33% more than the line can produce. So we manufactured that with the, with the existing capacity of window films. Right. With the fungibility. Right. So going forward you can straight away think that with the natural growth we are 50% already utilized on that line. Right. Then we have like our plans and agreements and MoUs which will definitely be part of this thing. But we cannot, I mean disclose the details of any of them.
Ankit Gupta
Have we added any large customers on the PPF and control side post, you know all this direct discussion started because what we understand is the EPS being sold in US is largely imported from, you know, players like us Chinese as well as Korean players. So have we added any new clients on the PPF and control side which can become big for us?
Deepak N. Chawla
Yeah, so we have in fact we had like five new distributors who were like selling the products from big companies. They were mainly doing business from China and Korea. Right. So that discussion is still going on and one or two of them has already been converted and rest are being worked out. So we are working on that. And yes, we have converted a couple of them and more will follow because our efforts in USA market, like I said, we have set up a dedicated team there in US market. Right. And product portfolio has also been increased.
So with this we expect more customers to come to us as compared to the previous years.
Ankit Gupta
Any last OV which has approached us, you know, some of our competitors for which we can do white labeling.
Deepak N. Chawla
I’ll tell you yes, through white labeling our couple of customers are directly tied up with OEMs. Right. But if you talk of direct, direct was not possible before this year because it needs, it needs a lot of, you know like D2C we just started. So our model was to sell to white box and to distributors. Right. So serving OEM requirements, you know, your capabilities, having applicators, your capability, having, supplying the product from that particular location. So this and our model was like distributor and white box driven. So our white box distributors are definitely having not one many of the OEMs which are like the new age companies and one of the largest companies as well.
Right. So for us this will start from now. We’ll try to add oem. But since we already supplying to white box and distributors who are doing really, really good and they are continuously expanding, we only added that’s why D2C which helps each and every customer to take advantage of global brand rest. Everything is going on track and the growth is also shown to be good one.
operator
I’m sorry to interrupt. Mr. Ankit, could you please come back in the queue? Yeah, thank you. The next question is from the line of Ashish from InvestQ PMS. Please go ahead.
Ashish
Yeah, thank you so much for the opportunity. Initially I should congratulate the entire team of your company for the transition that we’ve seen the last four or five years. It’s been kind of phenomenal actually. So words on that, on the question sir, given this tariff, so 3M probably would be the biggest company in your domain and you’re a competitor to them. So taking that as an example because the entire objective of these tariffs is to bring manufacturing as much as possible inside the US and your competitors would be in the US corporations also. So in that scenario though tariffs right Now, I mean 10% is the number.
How do we, I mean how do we live in that environment is my question. Because it will be detrimental to our interest if we have to pay those duties. And those producing in America won’t be needed too. So any perspective on this would be helpful.
Deepak N. Chawla
Sure, sure. So as I explained, just think of a scenario where 10% duty is India. But at the same time South Korea also added 10%, Europe has also been added 10% and China has been 35%. Of course they were high initially, but still there is a 10% addition to that. So in that scenario we as a company, I mean as a country is one thing, but as a company we have lot of advantages of, of, you know, backward integration, cost controls and quality commitments. Right? So if we, I mean in our situation we are well positioned at this particular scenario to, to develop, to, to continue the growth momentum in US market, right? In fact we are trying hard to get more of the share from others, right? Because the trade scenario is still remains uncertain, right? So now with this one jerk of one, one month and ten days, right.
There has been many uncertainties towards the supply chain like what will happen to future, right. For other countries it has been stable. So with this pitch, it’s like very strong sales pitch what we do and strong marketing campaign which we have now elevated in the. Our marketing pitch has been gone to very different level now and with the introduction of E commerce and all, we are being viewed as a company which is continuously transforming itself from you know, the days when we were like a superior quality manufacturer, but now being viewed as a superior quality manufacturer plus a dynamic company in terms of marketing.
And also real thing is we are bringing this benefit to each and every customer to be it like a direct customer or big dealers and distributors, we are very popular on that. So we are taking advantage of this situation, as I said, competitive advantage. We still at a strong position. So we do not see as of now any change in that situation.
Ashish
So as of now there is no change. But hypothetically, if the duty were to go to say for example 30%, so would we be anyway be willing to put facilities in US and would that be a profitable proposition? Because this is very uncertain right now. And as I said, the objective of the government of US seems to be to bridge their trade deficit and to bring manufacturing within us. So I mean isn’t it a risk to our entire population.
Deepak N. Chawla
Now I got your question. We have like a team working in USA and here and rest of the world. So we have evaluated the situation. But be very honest. Anybody like, you know, just go there and put the plant. I mean we have like many options by the companies or do joint ventures ventures with someone. We are evaluating everything. But let me tell you one thing that there is hardly any manpower available in us. People can say anything. They will make garment, they will make this. But on the ground, right? To find people run the facility.
Our estimate says the current cost which we have will go like 30, 40% up in manufacturing. Right? Again, the tariff of total 26% which is 10%. On worst scenario, it may be another 16%. Still the advantages which the company has in the backward integration and like quality proposition with more things to come. We are at a very strong position, right? Because we are. If you talk of any company, I will not name anywhere in the world they buy. For example, let’s talk of a sun control. They buy base build from someplace. Then they buy it from someplace.
They get top coat or they get it done at some factory and then bring the material back. Right? Then they do many operations here and there. Whereas you think of our company as a company which buy petrochemicals, make their own resins, then make their own film, then add makes their own adhesive top coat. You know, nanotechnology discussion on top of this. Then all the operations are at one location. So we are advantages at this position are really, really strong as compared to any such situation. Having said that, we are continuously talking like in recent visit also we have evaluated, met many customers and you know, peers are who are willing to coordinate partners, participate with us.
We are in discussion with them. I mean, that is again very confidential in nature that we are doing all those things. And that may evolve in something like some kind of cooperation. And one of the thing is that some of the products or 20, 30% of the product which we supply to USA they re exported from there. So these opportunities are also. We are evaluating that we do not. I mean this duty does not affect on those situations. So many such proposition have been worked out for the extreme thing. And it has already been actioned, I would say.
Ashish
So I’m assuming that 3M also would be interesting or getting it made from the China or somewhere, right? I mean, mostly US based companies also would be doing that, right?
Deepak N. Chawla
Yes, I will. I don’t. I will not comment on any particular company. Right. But there are. You can assume there. You can Assume or you can say there are lots of companies even the companies which people in US assume that this is hundred percent American. Actually he. He’s doing the final thing in America but three backward integrated things. They are getting it done from other countries. Right. So it is 100% true what you are assuming. But I do not. I would not like to comment any particular company. But there are many many companies which we don’t even believe that they do these kind of things.
But they are doing.
Ashish
Thank you so much sir and all the best for.
Deepak N. Chawla
Thank you.
operator
The next question is from the line of Aditya from equities investments. Please go ahead.
Aditya
Thank you sir. Most of my question is answered so just on the geographical area recently signed trade agreement with UK do we see any expansion on those side? Are we hiring another team resource? Are we going aggressive towards that geography?
Deepak N. Chawla
Yeah. So in. In UK we already have our subsidiary. We have office and we have sales people there. Right. And but what we added rather we added in the European territory more to. To. To increase our penetration in European region. Right. So with the. I mean this trade pact we are just seeing if there is any duty or taxation benefit to us which is being evaluated. But to be precise UK is the kind of size revenues we are doing and the kind of Pvt. Of 445 crore which we are doing that the sale and the total potential of that market is not that great.
But let me tell you once again that to grow from here we are doing many bucket addition. That’s what we said. D2C in America maybe little bit from this trade in UK then lot of additions in in Middle east and Europe and then architectural sales in USA and India. So put together these many small buckets will get us to the desired results and desired growth what we are planning. But we are very aware of the fact of UK India pact and that already being discussed and advantages are being taken.
Aditya
Right. Sir, the second is just a small brief that I would need on. You said products from Korea and China different from what we manufacture. And you mentioned some process also. Sir, if you could just share two lines on that. How are we different? What is the process?
Deepak N. Chawla
I’ll tell you the products because there is again you know lot of competitive analysis people do from the other these things. I would say the method which we make the products they last for minimum 10 years and I would say even lifetime warranty on global products we make them in such a way that color fading. There are three important things in a film in a sun controlled window film. One is UV Protection. Another one is your control of visual light which comes from different colors, different metals and all. And lastly and the most important the heat control, the ir.
Right? So if we talk of ours versus the films which are manufactured from other countries is that that are this fading or coloring of the film that that does not happen to us, right? That is number one. Number two is when you talk of the this capability of IR or reduction of IR cut heat reduction that in our cases it is layered between two, two layers of film and coating, right? So it does not again fade away, right? So that is number two. And number three is like we have seen seen many vehicles in Middle east and USA where the adhesive comes out and it looks like pockets of filtration, right? So, so that what happens is our films, even customer testimonials they say.
I’ll just give you an example. It’s a good point that recently we posted in LinkedIn that a customer from Lucknow he put Karwari films in 2009 in his car, right? He came back in 2025 saying that the car, he’s changing the car. But the film which we applied in 2009 is still intact. So there is no other van in the world which can do that. So we did cake cutting and put his testimonials everywhere and he bought a new film on his new car. So such is the reputation of global and Garwari. Even we have seen some like some negative publicity in US where people say you know world which is the world best film technology.
Even before yesterday it has come. He said it’s. It’s Garware or global in India. But these products are. If you talk of other products they are very cheap. So the difference between us that the methodology and manufacturing of other films is very low quality and they do not stand up with our quality which is like 10 to 15 years intact into that. So that is the difference.
Aditya
Professor, thank you so much.
Deepak N. Chawla
Thank you.
operator
The next question is from the line of Aman from Astute Investment Management. Please go ahead.
Aman Vij
Good afternoon sir. Just two questions. So last year quarter one and quarter two were quite good because of favorable mix on the architectural side as well as there might be some benefits of some commodity pricing also. So for this half year do we expect similar kind of mix or was there any one off some particular kind of sales value added sales in architecture, anything. And if it was repeat this year that is question one. Second question is we posted like all time best quarter which was September 2024 quarter where we posted 100 crore plus kind of so by which quarter do you expect us to repeat that kind of like performance? Hundred crore plus kind of at for the quarter.
These are the two questions.
Deepak N. Chawla
Okay. So plain and simple that quarter one and quarter two, they are the quarters where we expect seasonality to be at its peak. So this year also either of these will be the best for us, right? Q3 normally remains subdued and Q4 will pick up to give growth for Q1 and Q2. So we can expect either of these two quarter to remain number one and number two for us this year as well. And with all the efforts, we have already given the guidelines for this year which we are saying that we will meet that one.
So there is, there will definitely be growth on both the quarters as compared to last year. Right. So we expect this to remain more or less same. It cannot have a rule like exactly Q1 will be better or Q2 will be better. Either of these two. I mean we can also say that Q1 posted 27% of operating margins. But Q2 was, was despite being better it the margins were around 24.5 or 25%. So this up and down in our company will always happen depending on like how the seasonality moves. And sometimes people pre buy to see like more.
I mean sales in that. So because our sales pattern is quite long, like we get orders, we manufacture, ship it to different world which take like 25 to 45 days and then they are sold. So the cycle is quite long. So these ups and downs are quite predictable for us. I mean quite unpredictable for us. But definitely Q1 or Q2 either these two will be the best quarter and definitely the guidance of 2,500 crore will. We are confident of meeting that.
Aman Vij
Yeah, just the clarification was there. So commodity price is something which nobody can control. But was there any benefits which was like I think in Q1, Q2 was there which might not repeat because the cycle has not like turned back down.
Deepak N. Chawla
So that particular question, so I can say on the commodity means we are talking of some products from IPD side. Right? So we, we said like you know what is happening. The company has turned around from 65, 70% of IPD to 30%. And with the new introduction of PPF line it will go as low as 20 to 25%. Right. And out of that commodity will be like 20% of that. So the total impact is very, very minimal for us as a company level. But still on IPD side also this is a backbone for cpd, right.
We supply many of the products which are manufactured in IPD to cpd. So growth in CPD is continuously improving the performance of IPD as well. Right. So that’s how we expect this momentum to continue. If there is a worse situation in the market, like commodity cycle goes to its lowest, we can see a little impact, I can say like in a like 4.5cr impact on PBT on a quarter, not more than that. So even last year it was the real growth. Let me tell you, the growth last year, the growth of these things that like CPD I mean has grown to its best.
I mean Sun Control has grown by around 36%. Right. And the real benefit to us on like as compared to FY24 in FY25 has come because of the better sales and high product mix of Sun Control. Not on IPD changes. IPD has done a minimal stable performance.
Aman Vij
Just one additional question.
operator
I’m sorry to interrupt. Sir, I would request you to come back.
Aman Vij
Thank you.
operator
Thank you.
Deepak N. Chawla
Thanks.
operator
The next question is from the line of Pratham from Quantum amc. Please go ahead.
Pratham
Thank you.
operator
Thank you. The next question is from the line of Dhuanil Desai from Turtle Capital. Please go ahead.
Dhwanil Desai
Hi, good afternoon. Deepak. Am I audible?
Deepak N. Chawla
Yes, yes, very well.
Dhwanil Desai
Yeah. Hi. Congratulations for a very good year. You know, you know, reasonably volatile situation. So two questions. One is that you know currently we are at 2100 crore and couple of years of 27 we are targeting to reach around 3000 crores. So this incremental 900 crore. How should we look at in terms of, you know, growth coming from sun control architecture, PPS and window. I understand that all, all of them will grow but which will garner the higher share, you know, in the packing order or in terms of number if you can tell.
Deepak N. Chawla
Yeah. So we expect, see whatever. I mean in last four, five years we have been growing on all segments. Right. So from here the growth we expect the number one growth to come from architectural segment and that too from India and US market. So that will be like number one and followed by PPS growth. Right. That would be number two. And third there will be like. That’s as a broad. If you ask for segment. Yes, it is architectural ppf. But in architectural also we are saying that the work has been done in terms of team building.
In terms of product portfolios, the work has been completed. Right. But there will be like garbage home solution which will add to that plus lot of products which we are adding now on also after completing the basket, the higher, higher end product that will also help. So architectural and ppf. And having said that automotive segment. So this is product wise, but if I go to geography wise again, we will expect a good automotive growth from Middle east and Europe. So that is growth drivers for us.
Dhwanil Desai
Okay. And a second question on tpu, I think the capacity that we are putting up, you know, it’s almost half of what we will produce in the tps. And we are also thinking about, you know, kind of doing additional products based on TPU which is other than pps. So essentially, you know, it is that we are first trying to stabilize or test this PPU line, then eventually kind of convert the entire backward integration into TPU over time. And on the tpu, new products, you know, in terms of the products that you are working on for FY27, FY28, you know, in terms of market size, are we looking at very niche products or are we looking at large scalable products like Sun Control or ppf? Some thoughts on that?
Deepak N. Chawla
Yeah, we are, you know, focusing on, we are see first to answer the first question on tpu. So this is yes, it’s true, it’s. It’s capable to supply one PPF line and but the idea here is to grow the product line also. We have always been trying and successfully achieved the niche products, always. So with this we are targeting some products which have got a volume, but they are, you know, they are not something which is very easy to produce. Right. So we are, the R D is working on those products. All efforts are working towards to grow that area before the life comes.
We should have the full idea, study everything ready with 25%, roughly 25% of the products which we are trying to start a new, I mean business vertical for us. So the idea to take like I said, not to look for like continuous. We are definitely capturing everything, whatever available in automotive market now into architectural market. Then we want to set up new business verticals because we want to create the valuation at the rate of 25, 30%, 20 to 25% CAGR. For that we definitely need the business verticals which are new age. Right. Which are. And TPU itself is a very new product.
Right. It’s not something which has been there for ages and people are using because the benefits of TPU are, I mean outstanding. It’s very, I mean flexible. It has got high strength and it can be used in multiple variants. So the idea is to grow that, that segment and then based on that we’ll decide like how do we go? Does it make sense just to make a backward integration for PPF or does it make more sense to Be a new product line with a very different, you know, aspect for the company. A complete whole new vertical.
And we are more focused towards to develop something new. Right. Because TPU will add only margins to PPF business. But we have to continue the sustained growth of top line also. So this, both objectives are there and this is being worked out very closely. And we will come out with what a final thing on that we know what we are doing but for the sake of our internal commitment and confidentiality and to avoid any, you know, information which is, which should not be like very much into the domain. So we avoid more commenting more on this.
Dhwanil Desai
Thank you.
Deepak N. Chawla
Thank you.
operator
The next question is from the line of Vinay from Hathaway Investments. Please go ahead.
Vinay Nadkarni
Thank you. Just wanted a couple of questions. North America delivers around 48.5% of your total sale. How much of it is direct to us?
Deepak N. Chawla
You mean north of America and US?
Vinay Nadkarni
No, only US.
Deepak N. Chawla
No, no, but 48% is to North America and most of that we. That’s what I was saying that out of 48.5 mostly goes to USA but there are many products which go to Canada, Mexico, Canada and yeah, many of them to go Canada and Mexico as well. So I can say around 80% goes to USA of 48.5 and another 20% goes to Mexico and Canada. Right. And going forward we will directly cater from Mexico and Canada directly from India.
Vinay Nadkarni
Okay. Secondly, your presence in the southern hemisphere is just limited to Australia very small part and I think South America very small part.
Deepak N. Chawla
Yeah.
Vinay Nadkarni
And since Sun Control is a big chunk of your sale, wouldn’t it be seasonality, better to have more presence there? What is the reason why we have not grown in that area?
Deepak N. Chawla
We have grown that area, but we have grown much faster in America because you know, US market and European market. These are the markets which, which value high end products a lot. That means, you know, the quality is most suitable for these markets. If you see any company they their maximum, you know, if they are good quality, high quality manufacturer, if they are ethical in terms of their offerings. Right. So they will have the maximum share in these markets because they are advanced and respecting good quality. Right. And we always give value proposition to our customers.
High quality at a more suitable pricing. Right. So that’s how this market has been very strong for us. But we have added resources in South America to grow that. But even when you talk of the potential of these markets, so based on that potential they they can grow a little. Not like what we are targeting in Middle east and Europe.
Vinay Nadkarni
Okay. And what Is the contribution of sun control and PPF individually to the total sales in FY25.
Deepak N. Chawla
Okay, so we have roughly 45% of sun control and 26 to 30, to be precise, 26% of PPF. Right. And around 30% of IPD. And forecasted numbers looks to be 45 to 50% on sun control this year and around 30% to PPF and around 20% to IPD. So if you see sequentially IPD will go down. PPF will slightly increase and sun control will increase. PPF will increase and Sun Control will also increase.
Vinay Nadkarni
Okay. And lastly just one question. Thank you.
operator
The next question is from the line of Harsh from Toro wealth managers. Please go ahead.
Harsh Mulchandani
Hi Deepak. Congratulations on great set of results. I just had one question to understand in Q4 was did we notice any stocking or you know, some sales being pre booked due to the upcoming tariffs? Was that a possibility? And if not then can we assume that this was entirely normal sales due to your marketing efforts?
Deepak N. Chawla
No, I can 100% post that it was normal marketing. This thing. No stocking has been done. I mean we see our stocks in US are very very normal. Nothing increase it. Thank you. From here it goes to US warehouse and it is same there. So no change in that.
Harsh Mulchandani
Got it. Because during COVID times we had some stocking then for a couple of quarters. So I was just trying to understand there is no like pre book of sales and then some destocking happening over the next few quarters. So that scenario isn’t there.
Deepak N. Chawla
As of now it is not there. Covid has been long and painful period where people could not get back material. That’s why they ordered a lot. They could not get in six months, eight months. Then suddenly they ordered and that’s why it got stocked up here. Painful period has been very small waiting period and nothing. There is no change in our stocking pattern.
Harsh Mulchandani
That sounds good. Thank you so much.
Deepak N. Chawla
Thank you. Thank you.
operator
Next question is from the line of. Mihirtami from Sher Khan. Please go ahead.
Mihir Dhami
Thanks for the opportunity sir. Because of the 10% additional tariffs from us, how much impact would it have on our margin?
Deepak N. Chawla
See on the margins I would say there has been a general increase from everyone into the US market like explained there. Even US manufacturers, there are many of them, they import their components from other countries. So everyone has got some kind of impact of that. That’s why there is. I mean many of the producers are contemplating like price hike to this extent. Right. So we are in discussion and will be able to pass this on. To our customers.
Mihir Dhami
Okay. Another one was a bookkeeping question. What was the reason for a rise in employee expenses and other income in this quarter?
Abhishek Agarwal
Employee expenses is on the back of our action hiring, which we had, plus your normal increments which come during the year. So that was employee expenses. And on the second question was on.
Mihir Dhami
Sorry, other increments.
Abhishek Agarwal
Basically from our investments which we made. So we are getting our dividends and other things on that. So that is important.
Mihir Dhami
Okay. All right. Thanks. That’s all.
operator
Thank you. Ladies and gentlemen, due to time constraint, that was the last question for today’s conference call. I now hand the conference over to Mr. Deepak Joshi for closing comments.
Deepak N. Chawla
Thank you everyone for your time given to us today. I mean, as on behalf of Karwari High Tech Field Management, I, I thank you everyone and good luck. Thank you.
operator
Thank you. On behalf of Garware High Tech Flames limited That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.