THE NET HAS BEEN CAST

Fortune India|May 2020

THE NET HAS BEEN CAST
For decades, Pune-based Garware Technical Fibres made ropes and nets from man-made fibre. Then, third-gen entrepreneur Vayu Garware decided to pivot it into an innovation-led player. Not only has its stock shot up by 400% in the last four years, but the company has also found success in uncharted salmon-rich waters across the globe.
T.SURENDAR

THE NEXT

RANK 291 (292)

2020 COMPANY PROFILE

GARWARE TECHNICAL FIBRES

REVENUE

1,040.57 CRORE

PROFIT

125.68 CRORE

NET WORTH

650.34 CRORE

EMPLOYEE COST

129.95 CRORE

KEY

NO CHANGE

MOVED UP

MOVED DOWN

NEW

NOTE: THE NUMBER IN BRACKETS DENOTES LAST YEAR’S RANK; FORTUNE INDIA NEXT 500 RANKING IS BASED ON FY19 DATA.

NET PROFIT Garware Technical Fibres, led by Vayu Garware, has seen its profits jump 300% between March 2015 and March 2019.

IT IS A COOL JANUARY MORNING and the vista is pleasing. Large industrial sheds dot a mountainous terrain in Wai, in the foothills of Mahabaleshwar, a scenic hill station in Maharashtra. Apart from the one-toned clanking of machines from a few sheds, what prevails is the industrious quiet of women squatting inside the sheds, knotting giant nets (some are over a kilometre in length).

No, this isn’t a small cooperative in action. It is big business— worth ₹1,103 crore as of March 2019, in fact—for Pune-based Garware Technical Fibres, an increasingly sought-after maker of fishing cages for salmon farming, No. 291 on Fortune India’s Next 500 list. Its net has spread globally—literally—replacing those of competitors in exacting markets such as Norway and Canada; it is also setting up a new office in Chile. The company even got a patent for its nets in India in 2018 (it has filed for one in Chile, Norway, and Canada, among others, as well).

These are uncharted waters for Garware Technical Fibres which, till six years ago, sold 70% of its nets and ropes (primarily made from man-made fibres like nylon, till that point) in a commoditised manner. “We added value only to the rest. Today, that equation has turned around,” says Vayu Garware, 46, the Wharton-educated chairman and managing director of Garware Technical Fibres who decided to invest in creating a “unique product” (it took them four years to develop, but more on that later). “Now our products sell at a premium over even European competitors in all the markets,” he says.

As a result, sales went up 40% from ₹786 crore in March 2015 to ₹1,101 crore in March 2019, while profits jumped 300% in the same period (from ₹60 crore to ₹182 crore). Not surprisingly, its stock soared. On the BSE, it rocketed 437%—from ₹280 in February 2016 to a high of ₹1,695 on February 27, 2020. (The markets downturn has seen a slide down to ₹1,072.55 as of April 2.)

The gains, according to a research study titled How Competitive Advantage Drives Churn in the Stock Market by Saurabh Mukherjea, founder and chief investment officer of Marcellus Investment Managers, are also because Garware is at that early ‘inception’ stage in a company’s life cycle, where it creates a new niche in the market, leading to a unique positioning and profitability. That makes news and enhances value, he wrote.

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May 2020