Faze Three - Diversified Product Basket, Strong Cliental Base Bodes Well: HDFC Securities Initiates Coverage

HDFC Securities Retail Research

Faze Three Ltd. is engaged in the business of manufacturing and export of technical and home textiles products supplying to top retailers across the globe.

Majority of Faze Three’s revenue (90%) is derived from Exports to USA, UK and Europe region. The product ranges includes technical and home textiles as well as handloom home textiles products.

FY22 was a remarkable year for the company as it was able to add significant capacities, management bandwidth, new products, customers and substantial across all stakeholders.

Even after sharp rise prices of raw material, coal/fuel costs, shipping costs, etc., the company was able to report highest ever revenue. Margins also improved resulting in strong net profit growth.

Faze Three is currently running at peak capacity level. It has zero long term debt in the balance sheet since FY18, however recently the short term debt has risen due to inflated raw material and transportation cost as well as due to ongoing capex.

Management has indicated that there is huge unfulfilled demand within the existing customers and this could be met with the increased capacity.

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