The stock which rallied 31 per cent in the last three months, 92 per cent in the last six months and 52 per cent in the last one year is currently trading at 0.55 times its book value. The company has repaid most of its debt obligations in the last two year and reduced the borrowings from Rs 312 crore in March 2017 to Rs 118 crore as on 30 September 2020.
Last week, the flagship company of specialty polyester manufacturer Garware Group announced the production of paint protection films (PPFs) for automobile paint protection which is expected to contribute an incremental revenue of Rs 300 crore by 2022-23.
The company has delivered a profit growth of 38.21 per cent CAGR over the last 5 years. The improvement in operating performance marked by consistently high capacity utilization level and improved focus on value added products translated into expansion in its operating profit margin in the last few quarters, according to analysts.
“The company in the last three years has tweaked its product mix in favour of higher margin yielding products as against the commodity grade product,” according to Kunal B Shah, analyst, Care Ratings. “These value added products are high margin products due to their properties like high tensile strength, chemical & dimensional stability, rejection of harmful UV rays and others.”
The liquidity indicators of the company continue to remain strong on the back of sufficient cushion available in its working capital limits with 20 per cent average utilization of its fund-based limits during the past 12 months ended July 2020, according to Care Ratings. The gross cash accrual was healthy at Rs.129.51 crore during FY20 and unencumbered liquid investment of Rs.144 crore at end of June 2020. Further, GPL is expected to generate the cash accruals in the range of Rs.85-100 crore during FY21.
