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This multibagger stock surges over 200% in 1 year, ICICI Securities says to buy

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.Premium
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.

Faze Three Ltd (FTL) is a small-cap company with a market capitalization of 834.02 crore. In India, the company is currently a well-known maker of home textiles and automotive fabrics. The company's shares have risen from 96.55 on May 24, 2021 to 342.95 last traded, representing a multibagger return of 255.20 per cent in one year.

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Faze Three Ltd (FTL) is a small-cap company with a market capitalization of 834.02 crore. In India, the company is currently a well-known maker of home textiles and automotive fabrics. The company's shares have risen from 96.55 on May 24, 2021 to 342.95 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 157.06 crore from 108.67 crore the year-ago quarter. The firm recorded an EBIT of 21.64 crore for the quarter ending March 31, 2022, up 56.25 per cent year-on-year, and a PAT of 15.91 crore, up 85.22 per cent year-on-year, compared to 8.59 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% 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 405 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 413 on 17 January 2022 and a 52-week low of 88.20 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, and not of Mint.

 

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