Garware Technical Fibers: A Technical Textile Manufacturing Company

“The current quarter results have been impacted due to delay in orders from our customers in the industrial and sports businesses on account of recessionary pressures in Europe and the USA. We saw customers adjusting stocks in the third quarter significantly. We expect this to be short term in nature and will get corrected from the first quarter of FY24.”
– Vayu Garware, Chairman and Managing Director

Business Basics

Garware Technical Fibres Limited is a leading manufacturer and distributor of technical textiles in India. The company was established in 1976 and is headquartered in Pune, Maharashtra. Garware Technical Fibres has a strong presence in over 75 countries and caters to various industries such as aquaculture, fishing, agriculture, geosynthetics, sports, defence, and transport. The company’s product portfolio includes various categories such as fishing and aquaculture, agriculture, coated fabrics, geosynthetics, industrial, and sports. Garware Technical Fibres has a strong focus on innovation and R&D, which has helped the company to stay ahead of its competitors. The company’s manufacturing facilities are located in India, Thailand, and the United States. Garware Technical Fibres has received several awards and accolades for its products and services. The company’s commitment to quality, sustainability, and customer satisfaction has made it a trusted brand in the technical textiles industry.

Company’s Business Segments

Garware Technical Fibers has two main business segments, Synthetic Cordage and Fibre & Industrial Products. The Synthetic Cordage segment manufactures a wide range of synthetic ropes and twines used in various industries such as fishing, aquaculture, and shipping. The company’s ropes are known for their strength, durability, and resistance to abrasion, which makes them ideal for harsh marine environments. Garware Technical Fibers is a market leader in the fishing net and aquaculture industry in India and has a strong presence in the global market.

The Fiber & Industrial Products segment of Garware Technical Fibers manufactures technical textiles used in various industrial applications such as construction, transportation, and defense. The company produces high-strength fibers, geotextiles, and protective fabrics that are used in the construction of roads, bridges, and tunnels. Garware Technical Fibers also manufactures fabrics used in the transportation industry such as seat belts, airbags, and tire cords. In the defense sector, the company produces bulletproof vests, ballistic helmets, and other protective gear. Garware Technical Fibers’ focus on innovation and product development has helped the company to continuously expand its product portfolio in both segments.

Q3 FY23 Financial Performance

Garware Technical Fibres Limited reported Revenue from Operations for Q3 FY23 of ₹274.58 Crore up from ₹308.13 Crore year on year, a decline of 11%. This was due to the company’s Synthetic Cordage segment which dropped by 13% down to ₹239.97 Crore. Consolidated Net Profit of ₹46.59 Crore, down 8.4% from ₹50.89 Crore in the same quarter of the previous year. The Earnings per Share is ₹17.74 for this quarter.

Aquaculture: A High Margin Segment

Although the company serves a number of markets, aquaculture accounts for about 35% of its overall revenue. Since 80% of the company’s portfolio consists of value-added products, the margin across segments is not too low. Additionally, the company’s segment with the highest margin is aquaculture. The business views this market segment as the most lucrative one as a result.

As per the management, “Aquaculture is the highest margin segment for us followed by fishing and sports. So all segments that we have made because we upgraded top end, and we have a value-proposition to customers that are able to command a premium. So margin-wise, I think aquaculture is the biggest but other segments are also pretty strong.”

Analysis Of India’s Textile Industry

India’s textile industry is one of the oldest and largest industries in the country. It is a significant contributor to India’s economy, accounting for about 7% of the country’s GDP and 13% of its total exports. The industry is also the second-largest employer in the country, providing employment to over 45 million people, both directly and indirectly. By 2025–2026, it is projected to grow at a 10% CAGR, reaching $190 billion. India accounts for 4% of global textile and apparel trade. With an estimated 362.18 lakh bales produced during the cotton season of 2021–2022, India is also the world’s largest cotton producer.

However, the Indian textile industry faces several challenges. One of the significant challenges is the competition from other countries, particularly China and Bangladesh, which offer lower labor costs and more competitive pricing. The industry also faces issues such as outdated technology, inadequate infrastructure, and high raw material costs.

The Indian government has started a number of initiatives to encourage the expansion of the textile sector. The National Textile Policy, National Jute Policy, and Textile Export Quota Policy are a few of these initiatives. The government has also introduced a number of programme, including the Jute Manufactures Development Council, the Technology Mission on Technical Textiles (TMTT), and the Integrated Skill Development Scheme for the Textiles and Apparel Sector, Including Jute and Handicrafts.