Buy Filatex India; target of Rs 125: ICICI Direct

ICICI Direct is bullish on Filatex India has recommended buy rating on the stock with a target price of Rs 125 in its research report dated July 30, 2021.

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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

For all recommendations report, click here

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