Garware Hi Tech Q2 FY27 Earnings Call — Analysis (NSE: GRWRHITECH)

Garware Hi-Tech Films delivered record Q2FY27 revenue of ₹696 Cr (+22% YoY) and EBITDA margin of 27.2% (+377 bps YoY), prompting management to raise full-year FY27 EBITDA margin guidance to 27% ± 2%.

26 Oct 2026 · Analysis by Alpha Inflection

Result quality: strong — Margin expansion. Management sentiment: optimistic.

The take

Q2FY27 Revenue from Operations ₹696 Cr ( +22% YoY ) . New guidance — FY27 fy27 revenue and ebitda margin… 27% plus-minus 2% . New story: Architectural Film as Next Growth Engine .

Results

Q2FY27 revenue grew 22% YoY to ₹696 Cr with EBITDA of ₹189 Cr (+42% YoY, margin 27.2%) and PAT of ₹129 Cr (+42% YoY).

Financial highlights

Guidance

Management upgraded FY27 EBITDA margin guidance by 200 bps to 27% ± 2% while reaffirming >₹2,500 Cr top-line guidance, targeting >₹3,000 Cr in FY28 and peak capacity revenue of ₹3,500 Cr.

What management committed to

• [GHFL] upgraded [FY27] EBITDA margin guidance by 200 basis points to 27% plus-minus 2% while reaffirming [GHFL's] revenue target of more than INR2,500 crores. — 27% plus-minus 2%, FY27
• [GHFL's] thermoplastic polyurethane or TPU film line remains on track for commissioning in Q3 FY27. — Q3FY27
• [GHFL's] INR191 crores solar control film capacity expansion is progressing with commercial production expected in H1 FY28, adding approximately 1,200 lakh square feet of fungible capacity. — INR191 crores, H1FY28
• With both these 2 capex [TPU and SCF] coming in, [GHFL] can reach up to INR3,500 crores in peak revenue potential at full capacity utilization. — INR3,500 crores, FY29
• In FY28, [GHFL] is targeting INR3,000 plus crores in revenue. — INR3,000 plus, FY28
• [GHFL] expects 1.5% to 2% [150 to 200 bps] consolidated margin expansion in FY28 from TPU backward integration into [PPF]. — 1.5% to 2%, FY28
• [GHFL] expects in next financial [FY28] INR75 crores to INR100 crores of merchant sale from the 25% external TPU allocation. — INR75 crores to INR100 crores, FY28
• [GHFL] plans to add another 12 studios in Q3 [FY27] and reach 50 [Garware Home Solutions] studios by December 2027. — 50 studios, Q3FY28
• [GHFL] expects in Q3 [FY27] another tariff reversal refund of around INR30 crores, with roughly INR16 crores coming to [GHFL's] books and INR14 crores refunded to customers. — INR16 crores to books, Q3FY27

Key themes

Margin expansion and capacity-led premiumization

How the narrative shifted

• Architectural Film as Next Growth Engine: Management views architectural window film as a ₹1,000 Cr annualized revenue opportunity that can scale to 50% of the window film portfolio, capitalizing on energy efficiency, UV protection, and safety benefits over conventional glass.
• TPU Integration and High-Margin Expansion: Backward integration into aliphatic TPU via the Lubrizol partnership secures raw material supply, cuts PPF production costs to drive 150-200 bps company-wide margin expansion, and unlocks external high-margin (~35% EBITDA) niche sales.
• Global Pricing Power and Parity: GHFL has systematically elevated its global pricing from 30-40% of international leader levels to 85-120%, positioning itself as a technology-led premium brand rather than a low-cost commodity alternate.
• Crude Sensitivity and Input Cost Resilience: Management argued that 75% of GHFL's consumer portfolio has low crude correlation (5-15%), allowing the company to sustain record profitability even at $100-110 crude while retaining operating leverage if raw material costs soften.
• D2C Brand Building via Studio Network: Transitioning from B2B to B2C/D2C through branded Home Solutions studios to establish top-of-mind recall, capture 10-15% higher realization margins, and scale direct architectural and PDLC film installations.

Operational commentary

• Thermoplastic Polyurethane (TPU) film line remains on track for commissioning in Q3FY27, supported by a strategic partnership with Lubrizol for specialized aliphatic TPU resin sourcing and co-marketing.
• Solar control film (SCF) capacity expansion of ₹191 Cr (adding ~1,200 lakh sq ft) is slated for commercial production in H1FY28 (June 2027) focused on robotics and automation, primarily serving the architectural segment.
• Plant capacity utilization in Q2FY27 stood at 75% for Sun Control Film and 73% for Paint Protection Film (PPF), with expectations to reach ~90-100% capacity by Q1/Q2 FY28.
• Direct-to-consumer (D2C) Garware Home Solutions network expanded to 14 studios with plans to add 12 in Q3FY27, targeting 50 studios by December 2027.
• Global footprint expanded with two additional application studios in the US (total 14 studios) and four new global distributors added during the quarter.
• Product revenue mix for Q2FY27 was 51% Sun Control Film, 24% Paint Protection Film, and 25% Industrial Products Division (IPD); export share was 80% (US 51%, Europe 15%, Middle East/RoW 12%, India 20%).

Analyst Q&A

• Q. What is the status and accounting treatment of the US tariff reversal refunds?

  GHFL has received ~₹31 Cr to date, of which ₹20 Cr was refunded to customers and ₹11 Cr recognized in books. A final refund of ~₹30 Cr is expected in Q3FY27 (~₹16 Cr retained in books, ~₹14 Cr passed to customers), accounted for by reducing COGS.

• Q. What is the capacity and margin profile of the new TPU business line with Lubrizol?

  75% of TPU capacity will be consumed captively for PPF (driving 150-200 bps company-wide margin expansion), while 25% will be sold externally to niche applications generating ₹75-100 Cr in FY28 with estimated ~35% EBITDA margins.

• Q. What led to the ₹25 lakh MPCB penalty during the quarter?

  The penalty was incurred during trials on an older boiler undergoing modification mandated by MPCB, where operations occurred before final clearance was finalized; the company complied with the penalty and resolved the issue.

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