24 May , 2022 By : Kanchan Joshi
Faze Three Ltd (FTL) is a small-cap company with a market capitalization of Rs834.02 crore. In India, the company is currently a well-known maker of home textiles and automotive fabrics. The company's shares have risen from Rs96.55 on May 24, 2021 to Rs342.95 last traded, representing a multibagger return of 255.20 per cent in one year. Year-to-date (YTD), the stock has gained by 18.54 per cent, and in the previous six months, it has climbed by 17.07 per cent. Faze Three is now trading better than the 5 days, 20 days, 50 days, 100 days, and 200-day moving averages, and has gained 9.59 per cent in the previous 5 days.
According to the company's financial results for the quarter and year ended March 31, 2022, total income increased 44.53 per cent YoY to Rs157.06 crore from Rs108.67 crore the year-ago quarter. The firm recorded an EBIT of Rs21.64 crore for the quarter ending March 31, 2022, up 56.25 per cent year-on-year, and a PAT of Rs15.91 crore, up 85.22 per cent year-on-year, compared to Rs8.59 crore in the year-ago quarter.
The brokerage firm ICICI Securities has said that “Over the past five years, the impact of FTL’s improved financial performance has been visible in upward momentum in stock price, which has grown at ~27 percent CAGR over the period. Near term challenges (spike in cotton/polyester yarn prices) may persist but we believe there is enough headroom for sustainable long term growth."
ICICI Securities has maintained a BUY rating on the stock with a revised target price Rs405 i.e. 13x FY24E EPS. The brokerage has also stated that the company is currently operating at peak utilisation levels and has a healthy order book for the next two quarters and a visible shift by large retailers of sourcing to India from China across the company’s product categories to create sustained demand.
The stock hit a 52-week high of Rs413 on 17 January 2022 and a 52-week low of Rs88.20 on 21 May 2021, implying that it is presently trading at a discount of 17% to its 52-week-high. The stock's P/E ratio is 18.96, which is high and overvalued whereas the P/B is 4.87, while ROE is 17.43%. The company has a high promoter holding of 51.28 per cent, which indicates that it is a good time to buy because of the potential for future growth, as well as a low PEG ratio of 0.55, which indicates that the stock is cheap.
The views and recommendations made above are those of individual analysts or broking companies.
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