Garware Hi Tech Films Ltd (GRWRHITECH) Q2 FY27 Results Analysis: PAT Jumps 42%, Margin Guidance Raised

Garware Hi Tech Films Ltd reported Q2 FY27 numbers with revenue of Rs. 695.53 Cr (+22.10% YoY) and PAT growth of +41.90% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Record Q2 revenue of Rs.695.53 Cr (+22.1% YoY) with EBITDA margin up 377 bps YoY to 27.2% and PAT up 41.9% YoY; H1 margin of 28.7% ran above the prior 25% ± 2% guidance band, prompting management to raise FY27 margin guidance to 27% ± 2%. The company remains debt-free with Rs.933 Cr liquidity and is funding the Rs.309 Cr TPU + SCF capex entirely from internal accruals, with TPU commissioning on track for Q3 FY27. The QoQ margin dip is an inventory-timing artifact, and growth was delivered despite Middle East slowdown and a 10% US tariff burden.

Key Investment Insights

Key Positives

• Record quarterly revenue of Rs.695.53 Cr, up 22.1% YoY and 9.9% QoQ
• EBITDA margin expanded 377 bps YoY to 27.2%, a peak Q2 margin; H1 margin of 28.7% exceeded the prior 25% ± 2% guidance band
• Management raised FY27 EBITDA margin guidance from 25% ± 2% to 27% ± 2% while reaffirming revenue of Rs.2,500+ Cr
• PAT grew 41.9% YoY to Rs.129.44 Cr; H1 PAT up 50.4% YoY to Rs.262.09 Cr
• Materials cost fell to 42.4% of revenue from 43.6% despite naphtha import prices nearly doubling and rupee -6%
• Debt-free balance sheet with Rs.933 Cr liquidity surplus; H1 FCF of Rs.168.27 Cr funds the Rs.309 Cr TPU + SCF capex from internal accruals
• H1 ROCE (adjusted for Rs.764 Cr revaluation reserve) at 32% vs the >25% FY27 target
• GHS studios expanded from 9 to 14 in H1; GAS network at 264+ (250+ India, 14 global)

Risk Factors

• Middle East slowdown amid the ongoing conflict acknowledged in the press release
• EBITDA margin compressed 311 bps QoQ from Q1's 30.3% (largely inventory-timing, Rs.67.25 Cr swing)
• US tariff burden (MFN + 10% Section 301) persists versus the 50% stack in the Q2 FY26 base
• Effective tax rate rose to 25.2% from 24.2% YoY
• CFO/PAT at 0.75x in H1 due to inventory pre-build (−Rs.71.74 Cr) and receivables (−Rs.24.50 Cr) absorbing cash