Garware Stock Analysis

An Outlier in a Intrinsic Compounding

commoditised Industry

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 What are Technical Textiles ?
Technical Textiles are textile materials and products used for
their technical performance & functional properties.

Technical Textiles are used based on their specific physical &

functional properties and mostly by other user industries
Eg: Sports Nets, tarpaulin, Sleeping Bag etc.
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 Raw Material

Derivatives of Crude Oil:

Polyethylene

Polypropylene
Polyester
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HDPE
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 Key Customers

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 Competitors

MENEZES

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Vayu Garware, MD
 PRODUCT PORTFOLIO

Anti Bird Nets Reinforced Soil Tarpaulins Aquaculture Cage Nets Cage Nets 8 Strand Shipping Tennis Nets
Fully Assembled Trawls
Anti Hail Nets Structures Hanger Covers Mooring & Towing Rope Predator Protection Ropes Volley Ball Nets
Purse Seine Nets
Shade Nets Landfill Awnings Trawl Nets Nets 3 Strand Industrial Basket Ball Nets
Gill Nets
Sericulture Nets Coastal & River Inflatables Purse Seine Nets Anti Bird Nets Ropes Ski Nets
Dole Nets
Floriculture Nets Protection Biogas Covers Mooring System Specialty Ropes Cricket Nets
Conductor Cable Pulling Pelagic Nets
Insect Nets Rock Fall Protection Sea Lice Solutions 12 Strand Ropes Badminton Nets
Tents Hot Line Stringing Ropes & Twines

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Grape Nets Gabion Walls Safety Nets Golf Practice Nets
Pandals River Cross Cable Pulling
Crop Support Geosynthetic Cargo Nets Soccer Nets
Pitch Covers/Ground
Stacking Cord Lining Braided Ropes Batting Cages
Covers
Erosion Control Rope Articles Handball Nets
Banana Ropes

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 SUPPLIER OF NETS TO
PREMIER LEAGUE

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 SUPPLIER OF NETS TO WIMBLEDON

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"First Principles is a physics way of looking at the world. You boil things
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down to the most fundamental truths and then reason up from there"
-Elon Musk
 First Principles
What is Fouling ?
Growth of unwanted marine life like
bacteria, algae, plants, worms etc.
This leads to huge maintenance cost a
& sometimes early death of the fish.

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 V2 Fibre: Anti-Fouling Tech

Garware using its polymer

engineering expertise infused
copper at the nano particle
level in the fibre. Since copper
is anti-microbial, this stopped
the unwanted growth of
marine life on theSchool
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 First Principles: Application 2

Customer's Problem: Sea Lice

Most of the sea lice skirts (which keeps out
sea lice from salmon cage) are for 5-6
meters depth, but the issue is that it
prevents the flow of water & when the
currents are high, sea lice skirt tends to
balloon out which leads to entire sea lice
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entering the salmon cage.

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 Garware's Solution

Garware developed a new patented

product called X 12 that has a very
high water flow. In trials in Chile, 2
head cages were treated with X 12 lice
skirt and the rest were only treated
with pharmaceutical. After 13 months,
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there was a 60% reduction sea lice Compounding
count in cages with x 12 sea lice skirt.

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 First Principles: Application 3
Garware's Solution:
Anti-Predator Tech
Highest cut resistance, up to four times that of
PA/ PES nets.
Higher stiffness over other PE nets
Prevents mud ingress and thus also minimizes
algae formation
SS wire resists biting through and adds stiffness
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Promotes Environment /animal friendly farming.
Send Enquiry

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 Types of Nets for Fishing

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TRAWL NETS PURSE SEINE NETS

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 Mini Moats
Complex Manufacturing

Switching Cost/Critical Application

Technical Know How

IntangibleSchool
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Distribution
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 Product Mix

Commoditized
30%

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Value Added
70%

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 Product Mix Break-up

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 R&D Expenditure

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 Margin Expansion Story
75%
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66%

59% 59%
58%
56% 56% 55%
53%
50%

37%

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10%

0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
 EBIT Margins
20% 20%
19%
18%

15% 15%

12%

10% 9%
9%
8% 8%

5%
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0%
2012 2013 2014 2015 2016 2017 2018 2019 2020
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 Free Cash Flow Engine
125
110

100 94
84

75
61

50 48
37

24
25 19

-25
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0

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-25
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
 Return on Capital Employed
30%
28%
26% 26%
25%
23%

20%

10%

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0%
2016 2017 2018 2019 Intrinsic Compounding
 Net Fixed Asset Turnover
5

1
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0
2012 2013 2014 2015 2016 2017 2018 2019 2020

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 Related Party Transactions

Borrowings from Related Parties

(In crores)

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 Related Party
Regulation
Transactions

Working Capital Limited Size of

Cycle Elongating Opportunity
due to B2G Risk
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"Risk comes from not knowing what
you are doing"- Warren Buffett
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