ICICI Direct has given Buy recommendation for Filatex India with a target price of Rs. 125 in its research report issued on Jul 30, 2021

ICICI Direct’s research report on Filatex India

Filatex India (FIL) is among the top cost efficient manufacturers of manmade yarns in India with a diversified product portfolio. FIL, over the last decade, has transformed its product mix with enhanced focus on value added products with its share increasing from 10% in FY13 to 78% in FY21. Despite being capital intensive in nature, FIL has maintained a capital efficient business model with stringent working capital policy (NWC days: 17) and high asset turn (2.0x), generating healthy RoCE of 22% Healthy cash flows have enabled it to reduce debt by ~ Rs 140 crore (D/E: 0.8x in FY21 vs. 1.2x in FY20). We expect further deleveraging to result in D/E of ~0.2x in FY23E

Outlook

We continue to remain structurally positive and maintain BUY rating We value FIL at Rs 125 i.e. 7x FY23E EPS

 

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