How has been the historical performance of Garware Hi Tech?

Revenue and Profit Growth Trajectory

Garware Hi Tech’s net sales have shown a strong upward trajectory, rising from ₹948 crores in FY19 to ₹2,109 crores in FY25. This represents a compound growth trend, with particularly notable jumps in recent years, such as the increase from ₹1,677 crores in FY24 to over ₹2,100 crores in FY25. The company’s operating profit (PBDIT) excluding other income also improved significantly, reaching ₹441 crores in FY25 from ₹144 crores in FY19, indicating enhanced operational efficiency.

Profit after tax (PAT) has followed a similar growth pattern, climbing from ₹82 crores in FY19 to ₹331 crores in FY25. This surge is supported by a steady improvement in PAT margin, which expanded from 8.6% in FY19 to 15.7% in FY25, underscoring better cost management and profitability. Earnings per share (EPS) have more than quadrupled during this period, rising from ₹35.15 to ₹142.58, reflecting strong value creation for shareholders.

Cost Structure and Margins

The company’s raw material costs have increased in line with sales, from ₹442 crores in FY19 to nearly ₹982 crores in FY25, reflecting scale expansion. However, the operating profit margin excluding other income improved from 15.2% in FY19 to 20.9% in FY25, indicating that Garware Hi Tech has managed to control other expenses effectively. Employee and power costs have also risen but at a controlled pace relative to revenue growth.

Other expenses have increased steadily but remain proportionate to the company’s expanding operations. The gross profit margin improved from 14.1% in FY19 to 23.1% in FY25, signalling enhanced operational leverage and pricing power in its markets.

Balance Sheet Strength and Asset Base

Garware Hi Tech’s shareholder funds have grown from ₹1,564 crores in FY21 to ₹2,372 crores in FY25, supported by rising reserves and retained earnings. The company has successfully reduced its long-term borrowings to zero by FY25, reflecting a strong deleveraging trend and improved financial stability. Total liabilities have increased moderately, consistent with business expansion, but the absence of debt in FY25 highlights a conservative capital structure.

The net block of fixed assets has increased steadily, reaching ₹1,442 crores in FY25, indicating ongoing investments in capacity and technology. Capital work in progress fluctuated over the years but showed a significant reduction in FY25, suggesting completion of major projects. Non-current investments and current investments have also grown, enhancing the company’s asset quality and liquidity position.

Cash Flow and Liquidity

Operating cash flow has strengthened considerably, rising from ₹99 crores in FY20 to ₹329 crores in FY25, reflecting improved cash generation from core operations. Despite significant investing outflows in FY25, the company maintained a positive net cash inflow, supported by prudent financing activities. Closing cash and bank balances have nearly quadrupled from ₹32 crores in FY20 to ₹120 crores in FY25, underscoring robust liquidity management.

Summary of Historical Performance

Over the seven-year period ending FY25, Garware Hi Tech has exhibited consistent growth in revenue, profitability, and shareholder value. The company’s ability to expand sales while improving margins and reducing debt highlights operational resilience and financial prudence. Earnings per share and book value per share have both shown strong upward trends, reflecting sustained value creation for investors.

With a solid balance sheet, growing asset base, and healthy cash flows, Garware Hi Tech is well-positioned to capitalise on future growth opportunities. Its disciplined cost management and strategic investments have contributed to improved profitability and liquidity, making it a noteworthy player in its sector.

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