FIL has state of art facility with unique double beam technology which has diverse applications supplied by the renowned manufacturer, REIFENHAUSER Gmbh of Troisdorf, Germany. Hence the products of the company are of best quality and have been accepted by giant companies as end-users in many advanced countries. It has certificates like ISO 9001-2008, 14001-2004, OHSAS 18001:2007 Certified by quality Registrar Intertek and UKAS. Apart from the above, the Company also holds authorization/accreditation conforming to Oeko-Tex standards from Hohenstein Textile Institute, Germany. The company’s ability to produce superior quality product and continuous Research & Development would help the company to sustain its revenue growth from export markets.
Valuation: We believe, going forward the non-woven Technical Textile sector would grow globally as well as in India led by 1) changing perception of consumers towards disposable products 2) increasing per capita income 3) increasing awareness of hygiene. We like the stock as it is uniquely placed in the organized sector with low cost of production, strong order book and robust expansion plan by FY18 due to growing demand in TT products. The stock is currently trades at 24.1x/ 16.7x / 14.2x / 11.6x of FY16/17/18/19e. We initiate a coverage on FIL with BUY rating and a price target of Rs. 158 with a potential upside of 55% (18x PE multiple to FY19e EPS;10 year average PE).