Buy Garware Technical Fibres; target of Rs 3031: CD Equisearch

CD Equisearch is bullish on Garware Technical Fibres recommended buy rating on the stock with a target price of Rs 3031 in its research report dated April 21, 2022.

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April 21, 2022 / 12:33 IST

26 Aug, 2025 12:21

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CD Equisearch's research report on Garware Technical Fibres

According to a Fact.MR report, the global technical textile market, valued at $210 billion in 2021, is projected to reach $370 billion by 2032 growing at a CAGR of 5.3% during the forecast period. Given the steady consumption rise of technical textiles, the market size over the past half-decade has risen at a CAGR of around 4.8%. Much of the growth, this report pegs, is largely accredited to the growing usage of the technical textiles products in the medical, automotive, construction, industrial, and sports industry. Asia-Pacific region is likely to dominate the technical textile market due to the rising disposable income, further catalyzed by strong production capabilities, low-cost labour and technological advancements. As per a report published by Wazir Advisors, the Indian technical textile market has also grown significantly at a CAGR of around 10% from FY06 to FY20 given its leap towards modernization and its manufacturing competitiveness. India’s export of technical textiles in FY21 was around $ 2.37 billion, which has grown at a CAGR of 9% since FY16. Moreover, the exports in H1FY22 itself stood at $1.72 billion. Earlier, India was dependent on imports of technical textiles which have grown at CAGR of some 10% during FY16 to FY19. But since then, imports have declined continuously and reached $ 1.40 billion in FY21 indicating increased domestic production, which suffices the country’s needs. The imports in H1FY22 stood at $ 1.14 billion. Moreover, In order to encourage large-scale projects, the government of India had recently launched a production linked incentive (PLI) scheme worth Rs. 10,683 crs focused on enhancing India’s global competitiveness in man-made fibres (MMF) and technical textiles.

Outlook

The stock currently trades at 41.2x FY22e EPS of Rs 75.84 and 36.0x FY23e EPS of Rs 86.60. The company has made good strides across the international markets in its primary segments by bringing new solutions to the market, which have largely been well-accepted by the customers. Moreover, the company’s ability to produce over 20,000 SKUs and the presence of a distribution network across the coastline consisting of regional, branch offices; depots; exclusive, sub-dealers; and fishermen societies, is no small feat. However, seemingly stagnant domestic demand as evident from continuous domestic revenue de-growth in the past five financial years is a cause for concern. Weighing odds, we assign a ‘hold’ rating on the stock with a target price of Rs. 3031 based on 35x FY23e EPS of Rs 86.60.

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