This document provides a recommendation to buy shares of Filatex India Limited. It summarizes the company's key financial details, stock price information, and rationale for the recommendation. The company reported excellent Q4 2016 results and has expansion plans that are expected to boost revenues and margins going forward. Its newly commissioned fully drawn yarn plant boosted recent performance and additional texturizing machines will further increase revenues. The stock is currently trading above its 50-day and 200-day moving averages and provides upside potential to the target price of Rs. 82 per share.

1. CMP 73 82 64
Price ` 73
Target Price 82
Upside 13%
Div Yield -
Tenure 3 Months
Stop Loss 64
Sensex 26973.77
Nifty 8271.35
Group/Index B
M.cap (` in cr) 232
Equity (` In cr) 32.00
52 wk H/L `
Face Value ` 10.00
NSE code
BSE code 526227
IN ` Crores
Particulars Q4 FY 16 Q3 FY 16 Q2FY 16
Revenue 349.37 299.23 332.32
EBITDA 31.27 20.34 23.11
PBT 12.65 9.02 5.79
PAT 13.55 5.74 3.84
EPS 4.23 1.79 1.20
IN ` Crores
Particulars FY 2016 FY 2015 FY 2014
Revenue 1278.23 1572.76 1769.39
EBITDA 98.14 88.57 54.47
PBT 32.65 14.40 (11.49)
PAT 26.27 9.60 (8.09)
EPS 8.21 3.00 (2.53)
RUDRA SHARES &
STOCK BROKERS LTD.
There is no immediate threat from Brexit over textiles industries. Textile manufacturing moved away from England long
ago to China. So we don't see much impact on Indian textile machinery manufacturing.
The newly announced Central government's textile policy will strengthen employment in the country. The policy is aimed
at creating 1 crore jobs over the next three years, following labor-friendly measures such as initiation of fixed term
employment and enhancing duty drawback to push textile and apparel exports.
Excellent Q4 FY 16 results combined with better credit rating, company's expansion plans & expected robust growth in
coming years would benefit company to increase its margins & profits.
Commencement of commercial production at Dahej: Company has taken up expansion scheme for increase in capacity
of fully drawn yarn, Polyester Texturized Yarn & Spinning capacity at its Dahej plant. Company had proposed to put up
manufacturing facilities for manufacturing of 100MT/day of polyester FDY at company's existing unit at Dahej at a cost of
`100 crore, to ramp up long-term profitability & commercial production has started during Q4 FY 16. Company also in the
process of installing about 40 Texturizing machines at it existing units, of which two texturising machines have been
installed & production started from Q4 FY 16 & remaining would be installed in phases and likely to be completed by 30 th
Sept 2016.
TENURE 3 MONTHSSTOP LOSS
POSITIONAL CALL - FILATEX INDIA LIMITED
BUY Investment Rationale
Dated : 30 th
June 2016
TARGET
Stock Details
FILATEX
75.90/32.30
Results Update
Financial Highlights
A newly commissioned fully drawn yarn (FDY) plant boosted Filatex Q4 FY2016 performance to ` 350 crores. With
current expansion of setting up texturising machines will further boost its first half FY17revenues.
Top line of company is expected to increase by 20-25% in FY 2017 & also trying to reduce the finance cost by selling
surplus land at village Nani Tambadi, Gujarat. Margins will also be better because this fully drawn yarn has decent margins.
As on 23th
June 2016, Credit rating agency, Credit Analysis & Research (CARE) has assigned ratings to bank facilities of
Filatex India. The rating agency has assigned ‘BBB’ rating for ` 467 crore long term bank facilities and ‘A3+’ for ` 300 crore
short term bank facilities of the company.
Decrease in annual turnover is mainly due to decline in finished goods prices consequent upon decrease in price of raw
material and deep fall in crude prices, however, outlook for the coming year is favorable for polyester as the declining
cotton prices globally has discouraged cotton farming in major cotton growing countries, leading to a lower cotton acreage
for the next season.
Indian Textile industry currently estimated at around US$ 108 billion & expected to reach USD 500 billion by 2025. The
growth implies domestic sales to rise to US$ 315 billion from currently US$ 68 billion. At the same time, exports are
implied to increase to US$ 185 billion from approximately US$ 41 billion currently The Indian Textile Industry contributes
approximately 5 % to India’s gross domestic product (GDP), and 14 % to overall Index of Industrial Production (IIP).

2. The stock is trading above its 50 and 200 day EMA & its below trend line shows a support of ` 64 and ` 62. If we see above trend line, if it cross
the high of ` 76, then it may reach to ` 82 in future, which is also our target.
RUDRA SHARES &
STOCK BROKERS LTD.

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STOCK BROKERS LTD.
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