Garware Technical Fibres reports steady revenue growth; profitability to improve from H2FY23GARFIBRES - 3395 Change: -3.30 (-0.10 %)
Garware Technical Fibres (GTFL) reported revenue growth of 26% YoY to Rs 356 crore. However lower gross margins (down 352 bps YoY to 66.1%) impacted the profitability. Positive operating leverage led to lower employee cost to sales ratio (declined by104 bps YoY) and lower other expenses to sales ratio (declined by 182 bps YoY) which restricted the decline in EBITDA margin to 66 bps YoY to 17.4%. Absolute EBITDA Increased by 22% YoY to Rs 62 crore. Higher depreciation and Interest expense along with lower other income on YoY basis led to net profit growth being restricted to 17% YoY to Rs 48 crore.
Q2FY23 profitability at gross margin level was negatively impacted due to higher cost inventory carried forward from earlier quarters and continued high cost of freight. At the EBITDA margin level, the company is gradually inching back to normal levels. The raw material costs and freight costs have eased subsequently after Q2FY23 which should enable the company to improve its profitability from H2FY23.