Filatex India Ltd Multibagger

Filatex India Ltd is likely to become a multibagger stock owing to the new capacity expansion that is being completed and the huge demand for man made fiber in the domestic as well as international markets.

Here are the full details of Filatex India Ltd based on a comprehensive research report.

Research report on Filatex India Ltd Multibagger

Company Overview

Filatex India Limited (FIL), is engaged in manufacturing Monofilament Yarns for Zippers, Tooth Brush Bristles, Velcro, Magic Fasteners and Forming Fabrics in India. All these products are import substitutes and are helping the country in saving precious foreign exchange. FIL is in the business of manufacturing Polyester, Nylon, FDY, POY, and DTY. The Company commenced with the manufacture of Monofilament Yarn and has now extended to Bright FDY. Their portfolio comprises intermediary products to multiple yarn varieties.

Investment Rationale

FILATEX INDIA LTD – KEY FUNDAMENTALS
PARAMETER VALUES
MARKET CAP (Rs CR)   888
EPS – TTM (Rs) [*S] 13.53
P/E RATIO (X) [*S] 15.08
FACE VALUE (Rs)   10
LATEST DIVIDEND (%)   5.00
LATEST DIVIDEND DATE 20 SEP 2012
DIVIDEND YIELD (%) 0.00
BOOK VALUE / SHARE (Rs) [*S] 81.23
P/B RATIO (Rs) [*S] 2.51
FILATEX INDIA LTD – FINANCIAL RESULTS
PARTICULARS (Rs CR) DEC 2017 DEC 2016 % CHG
NET SALES 504.19 368.2 36.93
OTHER INCOME 3.92 3.14 24.84
TOTAL INCOME 508.11 371.34 36.83
TOTAL EXPENSES 466.34 338.31 37.84
OPERATING PROFIT 41.77 33.03 26.46
NET PROFIT 14.48 6.85 111.39
EQUITY CAPITAL 43.5 43.5




New Capacity Expansion: FIL is almost at the end of completion of their brownfield expansion for bright polyester fully drawn yarn and bright chips at Dahej which will help them to increase their top line significantly.

Diversified Product Portfolio: FIL has diversified product portfolio to meet the domestic as well as export demand. The Company has global market reach across the globe to 28 countries.

Government Initiatives: Indian government reduced GST rate on manmade fiber from 18% to 12% and increase in import duty on all fabrics to 20% will act as demand accelerators for this company.

Cost Competitiveness: Due to improvement in India’s cost competitiveness vs. China in Polyester Yarns, exports saw healthy growth of 30-40% YoY in Q3FY18.

Demand for MMF: Polyester now has become the yarn for the masses, as per reports 5% decline in India’s cotton yarn production and easy availability of man-made fiber at competitive rates has led to the slower growth of cotton yarn production.

Behavioral Change in Apparel Industry: Demand for new applications such as sportswear, underwear, and bedding will enhance demand. Cost and other advantages could also help PFY substitute cotton and other fibers to mark their presence in the landscape of the apparel industry.

Affordability: In terms of affordability, Polyester is a wrinkle-free material with wide use in formal wear within the apparel industry. The fiber does not shrink and is often blended with other fibers to make it water-resistant.

Jump In Disposable Income: Increasing disposable income shift in employment patterns, exposure to global trends and increase in discretionary spending resulted in changing consumer aspirations, that drives the demand for value-added products like demand for premium apparel is likely to increase adding to the ‘look good’ factor, catalyzing polyester demand. The Company is expecting an increase in volume for value-added product led to an EBITDA growth in near-term and expecting a strong profitability along with free cash flow in FY19.

Boost In Urbanization: Urbanization is expected to result in a growing demand for fashionable products, durable garments and fabric that meet appealing requirements.

Valuation: Considering robust demand in the domestic as well as international market for man made fiber, we arrive at a Target Price of INR259 based of different multiples.




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Comment (1)

  1. AJAY Kumar

    Super assessment

    Reply

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