It is expected that Indian Textile industry will grow with a CAGR of 10% from 2015 to 2021

which is quite above the other industries growth.

Ministry of Textile Industry took initiatives to promote technical textile industry. Government

allocated Rs. 48cr for 11th five year plan which was from2007 to 2011. Mainly it was for creating

awareness in the people about the industry. Government also set up four centers of excellence

to provide testing support, facilities for training etc.

Ministry of Textile allocated Rs. 200cr for 12th five year plan to promote technical textile

industry and the aim is to improve the basic infrastructure in terms of testing facilities, lack of

market development support, skilled manpower, research &development and regulatory

measures towards this industry. Government allocated 156cr to upgrade four existing COEs

and to setup four new COEs. Whereas 44cr to support business startups & for market

development.

It is expected that the market will grow by 20% in 12th five year plan which provides a huge

opportunity for investor to invest in this sector.

Asian technical textile market is the biggest market in the world which accounts 39% share in

the world. India has the competitive advantage over the world due to low labor & operational

costs and also in terms of technological advancement.

The Global market is analyzed by the following Segments: Mobile Textiles, Medical Textiles,

Industrial Textiles, Sports Textiles, Residential Textiles, Clothing Textiles, Agro Textiles, and

Others in which Mobile textile Industrial textile & Sport textile have 50% market share.

There are other different growing sectors like automotive sector, constructions sector,

healthcare sector & sports sector which will pull the growth of technical textile sector. Because

these sectors can’t grow without technical textile sector. So we believe that this untapped

sector has huge upside potential to grow up.

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.

Management is very important aspect if we want to analyze any company. There are plenty of

examples which proved that good businesses can be failed because of the bad management

and a bad business can be sustained for a long time because of good management. We believe

that Garware-Wall Ropes is in good hands who think about their investors as well as they know

that how to grow and sustain in this competitive world.

Promoters have more than 50% of the market share which is a good sign for investment in the

company. If we see the above graph, shareholding of foreign institution and NRI in this

company is less than 5%, which shows that there will be less risk if they exit from the company.

Garware-Wall Ropes is not only a domestic company instead it has a Global reach and delivers

their products and applications to more than 50 countries including USA, Sweden, Korea,

Tacoma, South Africa, New Zealand etc.

A fishery involves to capture of wild fish or raising fish through fish farming or aquaculture.

Directly or indirectly, the livelihood of over 500 million people in developing countries depends

on fisheries and aquaculture. Garware-Wall Ropes has a long product lines in Fisheries like

Trawling, Gill Netting, Dole netting, Pelagic netting and different specialty ropes, which provides

the options to the customers to select the products according to their needs.

Aquaculture is the farming of aquatic organisms such as fish, crustaceans, molluscs and aquatic

plants. Aquaculture involves cultivating freshwater and saltwater populations under controlled

conditions, and can be contrasted with commercial fishing, which is the harvesting of wild fish.

Garware-Wall Ropes has a lot of varieties in Aquaculture product line which creates demand for

the company’s products.

3 Strand Rope- Is the most economical rope available in the market. It consists of many tiny fibres spun into yarns, and then formed into strands. 3 Strand ropes are flexible, easily spliced and knotted. 8 Strand Rope- Is commonly used in conjunction with commercial vessels in marine applications. Plaited 8 strand ropes have four right hands laid strands and four left hand laid strands which produces a torque balanced rope. 8 Strand Ropes are easily spliced and has good abrasion resistance. 12 Strand Rope- Is produced to provide significant improvement in performance, life expectancy and strength. Plaited 12 strand ropes have six right hand laid strands and six left hand laid strands which produces a torque balanced rope. 12 Strand Ropes are easily spliced and offer greater abrasion resistance combined with higher strengths. Double Braid Rope- Is a common marine rope which is designed for great strength to weight ratio. Double Braid ropes have a braided core encased in a braided jacket cover and is designed to bear equal load on the core and cover. These ropes offer high strength and very good abrasion resistance. Fibres can include Nylon, Polyester, Spectra Core, and Dual Fibre Blend.

Yarn and Thread used in the production of textiles, sewing, crocheting, knitting, weaving,

embroidery, rope making etc. which provides a huge potential to this product line of Garware-

Wall Ropes.

Garware-Wall Ropes are the manufacture of different kinds of sports net like tennis net, Cricket

net, Basketball net etc. Due to huge upside potential of sports sector, Garware-Wall Ropes is

also growing with the sports sector.

In Coated Fabrics of Garware-Wall Ropes provides different kind of products like:

Truck Tarpaulins & Container Covers.

Temporary Exhibition Halls, Temporary Warehouses & Aircraft Hangars.

Pandals for Marriages / Religious Ceremonies.

Tents for Resorts, Tents for NGOs, Tents for Trekking & Promotional Canopies.

Bouncies, Promotional Balloons, Aerostat Balloons, Inflatable Boats, Inflatable Tents & Water Storage Tanks.

Auto Hoods / Tractor Hoods.

Agriculture plays a vital role in India’s economy. Over 58 per cent of the rural households

depend on agriculture as their principal means of livelihood. The country is the largest

producer, consumer and exporter of spices and spice products. It ranks third in farm and

agriculture outputs. Agricultural export constitutes 10 per cent of the country’s exports and is

the fourth-largest exported principal commodity. Company provides different kind of nets for

agriculture like anti bird net, shade net, grape net,insect net etc.

These products have a wide range of applications and are used in many civil, geotechnical,

transportation, geo environmental, hydraulic, and private development applications including

roads, airfields, railroads, and embankments, retaining structures, reservoirs, canals, dams,

erosion control, sediment control, landfill liners, landfill covers, mining, aquaculture and

agriculture.

Cash generated from operations in FY 15 is 8860.91 Lacs as compared to 8450.93 Lacs in FY 14

which is more than 409.98 lacs.

Sales growth of the company is continuously growing which gives an indicator of the growth of

the company. The CAGR of the company is 31.65% from 2005 to 2015 which is quite healthy as

compared with the other companies.

Operating profit margin is used to measure a company's pricing strategy and operating efficiency. Garware Wall Ropes has a healthy 10% OPM in average for last 10years.

If we look into the graph, the profit after tax of the company is growing over the years, which

showed us the company is able to generate profit after tax year on year basis.

There are lot of factors which provide a top line growth to the company like growth in

agriculture sectors, sports sectors, exports, domestic demand etc. These factors providing push

to the sales of the company’s products.

From the graph, we can understand that Garware- Wall Ropes is an international company

whose export demand is approximately equal to the domestic demand in YOY basis.

The main expenditure of the company is raw material which is approximately 48% of the total

expenditure. If there is any movement in the price of raw material, company will face difficulty

and challenges. If we combine other expenses and employee benefit expenses, it will be

approximately 50% of the total expense, which is concern for the company. They should have

to reduce their other expenses so that the profit will be more.

Company’s products are heavily dependent on petroleum-based raw materials, power and

labors. If there is any movement in price of the raw material it will affect the company’s

revenue. Also, the company’s 50% revenue comes from export and if there is any uncertainty in

the global market than the company will face a huge pressures and challenges.

To invest in any company, we have to analyze the long term potential of the industry in which

the company belongs, than we have to see the company’s potential to grow, company’s

management and capacity to generate cash etc.

If we look for Technical textile industry, it has a huge potential of growth. Now, if we analyse

Garware-Wall Ropes, we can find that company has the potential to grow and has the capacity

to generate cash with a good management. If we combine all these factors, the output will be

positive. These are the reasons which gives us the dare to invest in this company.

• Going ahead, we expect GWRL to report a top-line CAGR of approximately 12% over

FY2015-17E. On the bottom line front, we expect the company to report approximately

18% CAGR over FY2015-17E on account of expansion in operating margin.

• Further, the company has reduced its debt significantly which will lead to cost saving for

the company. At the current market price, GWRL trades at a P/E of 11.3x its FY2017E

EPS.

Disclaimer for investors: This Report is based upon information that we consider to be reliable, but OSAR Capital does not warrant its completeness, accuracy or adequacy and it should not be relied upon as such. This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue. Prices, values or income from any securities or investments mentioned in this report may fall against the interests of the investor and the investor may get back less than the amount invested. Where an investment is described as being likely to yield income, please note that the amount of income that the investor will receive from such an investment may fluctuate. The information contained in this report does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation of particular securities, financial instruments or strategies to you. Before acting on any recommendation in this material, you should consider whether it is suitable for you or not. Certain statements in this report, including any financial projections, may constitute “forward-looking statements.” These “forward-looking statements” are not guarantees of future performance and are based on numerous current assumptions that are subject to significant uncertainties and contingencies. Actual future performance could differ materially from these “forward-looking statements” and financial information.