Garware-Wall Ropes was established in 1976 by the visionary philanthropist late Mr. B. D. Garware in collaboration with M/s Wall Industries Inc. USA. Subsequently, the Cambridge educated Mr. Ramesh Garware took over the reins of the company. At the helm of affairs till end of 2011, he infused dynamism and the culture of time bound result orientation across the organization. Weaving the core competencies of the organization to suit the emerging needs of the customers, he introduced a slew of far-reaching initiatives like capacity expansion, forward integration of operations, setting up a dedicated netting plant, launching new and fabricated products etc. His entrepreneurial instinct coupled with a humane approach has laid the platform for further growth and consolidation of the organization.
Solutions Provided By The Company:
1) Fisheries: As an innovative solution provider, the company caters to the global requirement in the active and passive fishing with products of Synthetic Fishing Ropes, Twines, Nets, Fabricated Products.
2) Aquaculture: The company offer Customized Synthetic Cages, Predator Nets and Mooring System Ropes for Aquaculture that are used in marine, inland and brackish water environment.
3) Shipping & Industrial: The company meets the stringent requirement of the various users in the Heavy Engineering, Shipping, Transmission, Safety and allied industries.
4) Yarn & Thread: The company's yarns and threads are used for Industrial Stitching purpose in diverse industries ranging from Fertlisers, Food Grains, Foot Wear, Filter Fabrics and other allied industries.
5) Sports: Customized sports nets conforming to international standards and specifications are used for different indoor and outdoor sports and games like Cricket, Football, Tennis. Hockey, Volleyball, Golf, Swimming Pool etc.
6) Coated Fabrics: Coated Fabrics used for various applications ranging from transportation to sports. Available in an array of different colours, the company's PVC Coated Fabrics offer high tensile strength, UV stability, Waterproofing, tear resistance and a variety of other benefits.
7) Agriculture: Development of various types of nets, cords and ropes, used for Protected Cultivation, protection Of Horticultural crops, support for Floriculture and Vegetable crops, utility products for Post Harvest Technology and Sericulture.
8) Geosynthetics: The company offers turnkey solutions in diverse applications such as Rockfall Protection, Coastal & River Protection, Erosion Control, Landfill and Lining Systems, Earth Retention Systems and Ground Improvement Techniques. The solutions are environment friendly and cost effective.
1) Pune Plant: Spreads across 14 acres of land and produces Ropes, PPMF Yarns/ Twines, SPM System, Geo Textiles and Metal Gabions
2) Wai Plant: Spreads across 29 acres of land and produces all types of Twines, Nets and Coated Fabrics
The Dept. of Science and Technology, Govt of India, has recognized the R&D Centers at both the locations – Pune and Wai.
Company Website: http://www.garwareropes.com/index.html
Garware-Wall Ropes eyes Rs 1,000-crore sales by 2017
While going through the fundamentals of the company, the only issue I faced, is its sector, due to which it might face some resistance, and which I why, I was hesitant in writing about it in detail. However, with tremendous efficiency of the company and a very strong product portfolio, it doesn't seem that company is going to be affected by the trend in overall sector.
The company is managed by very well known group with good experience.
Speaking of numbers, over the years, it has not been impressive, but they have kept on posting decent growth with the kind of business they are in. Recently, the focus on R&D and technology has increased, which is likely to aid the company in posting better growth in future.
The company has paid good dividend over the years, and in past 2-3 years, they have made a significant attempt in reducing the debt levels, which is a big positive.
The debt as of now, stands around 56 Cr compared to somewhere around 125 Cr in 2012.
On account of such reduction, the debt:equity ratio is very stable at around 0.2
The book value of the company stands at 125 Rs per share.
For the first half of this fiscal, the company has posted a sales growth of 23% and net profit growth of 68%. As per management, they are expecting the sales to continue growing at 15-20% annually. Based on FY'14 numbers, the EPS stood at 11.4, which means the stock is trading at a P/E of 16. However, with good profit growth this year, the company is likely to post annual EPS around 16-20, which means currently, the stock is trading at a P/E of 10, based on expected annual FY'15 numbers. The ratio can't be considered less, when compared with overall industry, however, looking at above data, I think the potential is huge in future, and there is plenty of scope for margin expansion.
Current market capitalization stands at 425 Cr vs sales of 688 Cr and net profit of 27 Cr.
It will be interesting to see, how market will value the company. when the sales, as expected by management, reaches 1000 Cr, and net profit stands somewhere in the range of 50-70 Cr annually.
However, looking at its 52 weeks high-low, it seems the stock is in radar of many investors, as it has almost grown 4 times this year.
One of the bigger problems, with the companies in textile sector, has been extremely high competition, which is something I feel, should not be the problem with Garware Wall Ropes, because of their uniqueness & mastery in products. However, as every one knows, somewhere the sector, always influences the price of company.
Note: This is not to be considered as recommendation being given, but a company, which readers can refer to, as it has plenty to learn and study from. If reader wants to take any action on the counter, it will solely be his/her decision. The author is not giving any advice on the action that can be taken at current market price.