Garware Hi-Tech (GRWRHITECH) Q2 FY27 Profit Slips Despite Record Revenue as Margins Contract
The specialty films maker posted a 22% revenue jump but saw profit dip sequentially as rising costs and a margin reset from a record high took effect.
Garware Hi-Tech Films reported record Q2 FY27 revenue of ₹696 crore, up 22% year-on-year. However, net profit dipped 2.4% sequentially to ₹129 crore as margins contracted from an exceptional peak.
Garware Hi-Tech Films’ multi-year shift from commodity polyester to high-margin specialty films delivered another record top line. Yet the second quarter reveals the tension between that long-term strategy and the immediate pressures of rising costs and a reset from an unsustainably high peak. Revenue reached a new high, but profitability took a step back.
The numbers show a company growing strongly year-on-year but moderating quarter-on-quarter. Revenue rose 22.1% from last year to ₹695.5 crore. Profit grew an even faster 41.9% to ₹129.4 crore. The story changes when viewed sequentially. While revenue grew 9.9%, profit slipped 2.4%. The net profit margin compressed from 21.0% in Q1 to 18.6%.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 (Sep 2026) | PreviousQ1 FY27 (Jun 2026) |
|---|---|---|
| Revenue (₹ Cr) | 695.53 | 633.08 |
| Profit (₹ Cr) | 129.44 | 132.65 |
| Net Profit Margin | 18.6% | 21.0% |
Why the margin peak was temporary
The stellar 21% net margin in the June quarter was an outlier. Management had cautioned it was unlikely to be sustained, citing Q1's typical seasonal strength. Reports from ScanX.Trade and ForgeUp note the sequential EBITDA margin contraction was driven by higher raw material and logistics costs. These pressures, flagged in industry reports, offset the benefits of a favourable product mix and operating leverage.
The outlook hinges on new capacity
Management’s confidence is evident in its raised guidance. The company increased its full-year EBITDA margin target by 200 basis points to 27% (±2%), as reported by StockFin.ai and SBI Securities. This optimism is pinned on upcoming capacity. A new TPU extrusion line, developed with Lubrizol, is on track for Q3 FY27. A larger Sun Control Film line is slated for H1 FY28.
These projects aim for backward integration and premium product growth, which should support margins. The company also holds a robust cash balance of ₹933 crore, per multiple reports, to fund this expansion without straining its zero-debt balance sheet.
Live Chart
· GRWRHITECH
(BSE)
ISIN: INE291A01017
Key Points
- Revenue growth remains robust, hitting a record ₹695.5 crore in Q2, up 22% year-on-year.
- Profitability moderated from an exceptional Q1 peak, with net profit dipping 2.4% sequentially as margins contracted.
- Management raised its FY27 EBITDA margin guidance to 27%, betting on new specialty film capacity and backward integration.
- The company maintains a strong liquidity position with ₹933 crore in cash to fund its growth capex.
Hexa Perspective
The quarter underscores Garware Hi-Tech’s successful transition—value-added products now drive growth, allowing it to raise annual guidance even as margins normalize. The path ahead depends on executing its capacity ramp on schedule. If the new TPU and SCF lines deliver the promised margin expansion, the current profitability reset could be a stepping stone. Investors are weighing this future potential against the reality of near-term cost pressures and a stock that saw a sharp ‘sell-on-news’ reaction, as noted by Newstopical.com, after a strong run.
Also read
Want this applied to your portfolio?
Talk to a HexaWealth advisor, or sync your mutual fund data for insights tailored to your holdings.