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ICICI Direct Report
Filatex India Ltd. is among the top cost efficient manufacturers of manmade yarns in India with a diversified product portfolio.
Globally, polyester is becoming a preferred fibre given its unique characteristics (highly durable, wrinkle resilient), inherent limitations of growth of cotton fibre (man made fibre dominates global textile fibre consumption with 70:30 ratio).
The company is one of the top five manufacturers of manmade yarns that over the years has gradually scaled up its presence in added segments (fully drawn yarn, drawn textured yarn) with its share of revenue rising from mere 10% in FY13 to approximately 65% in FY20.
The same has enabled the company to post Ebitda compound annual growth rate of 32% in FY14-20.
Given the enhanced focus, capacity addition of added products, we expect the share to get further augmented to 75% by FY22E giving fillip to margins.
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