Filatex India Q3 - Realisations, Margins To Improve Gradually With Easing Of Restriction In China: KRChoksey

KRChoksey Research Report

Filatex India Ltd. reported revenue of 10,704 million, declined by -0.4% YoY/-8.0% QoQ in Q3 FY23. The revenue growth was impacted due to pricing pressure on the final products. However, sales volume has increased by 11% YoY from 90398 milliontonne in Q3 FY22 to 101,488 million tonne in Q3 FY23, whereas sales volume was almost flat on a QoQ basis.

In Q3 FY23, total production was 99,969 million tonne as against 97,169 million tonne in Q2 FY23 and 86336 million tonne in Q3 FY22.

Performance during the quarter has been impacted due to China’s prolonged Zero-Covid policy. On account of low demand in China, polyester filament manufacturers in the country have dumped low priced goods into global markets, including India, which has resulted in an increase in imports and a decrease in exports for Indian polyester filament manufacturers.

Despite this challenging situation, Filatex India has achieved 100% capacity utilisation for its plants.

However, the headwind related to the dumping of goods by Chinese polyester filament manufacturers has affected realisation and margin during the quarter.

Management anticipates sustainable increases in realisation and margin beginning in Q1 FY24.

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