Filatex India Ltd Valuation Shifts to Attractive Amid Robust Market Performance

Valuation Metrics and Recent Grade Change

As of 10 Feb 2026, Filatex India Ltd trades at a price of ₹51.50, up 7.38% from the previous close of ₹47.96. The stock’s 52-week range spans from ₹34.03 to ₹66.10, indicating a recovery and upward momentum over the past year. The company’s valuation grade has been revised from Very Attractive to Attractive as of 22 Dec 2025, signalling a subtle moderation in its relative cheapness but still maintaining a favourable investment profile.

The price-to-earnings (P/E) ratio currently stands at 12.36, a level that remains significantly lower than many of its sector peers. For context, Trident and Vardhman Textile, two comparable companies in the Garments & Apparels industry, trade at P/E ratios of 32.56 and 18.36 respectively, while Pearl Global Industries and Indo Count Industries are priced even higher at 31.93 and 37.33. This disparity underscores Filatex’s continued valuation discount despite the recent upgrade in grade.

Price-to-Book Value and Enterprise Value Multiples

Filatex’s price-to-book value (P/BV) ratio is 1.62, which is modest and suggests the stock is not overvalued relative to its net asset base. This compares favourably with the sector average, where many companies exhibit elevated P/BV ratios due to growth expectations or asset revaluations.

Enterprise value (EV) multiples further reinforce Filatex’s attractive valuation. The EV to EBIT ratio is 8.82, and EV to EBITDA stands at 6.65, both considerably lower than peers such as Trident (EV/EBITDA 16.05) and Welspun Living (16.19). These metrics indicate that Filatex is trading at a discount to its operational earnings, which may appeal to value-oriented investors seeking exposure to the garment sector without paying a premium.

Profitability and Efficiency Metrics

Filatex’s return on capital employed (ROCE) is a healthy 18.80%, signalling efficient use of capital to generate earnings. Return on equity (ROE) at 13.13% also reflects solid profitability, though it trails some higher-rated peers. These figures suggest that while Filatex is not the most profitable in the sector, it maintains respectable operational performance that supports its valuation.

Comparative Analysis with Sector Peers

When benchmarked against other companies in the Garments & Apparels sector, Filatex’s valuation remains compelling. Arvind Ltd, rated as very attractive, trades at a higher P/E of 24.01 and EV/EBITDA of 12.24, while Pearl Global Industries is considered expensive with a P/E of 31.93 and EV/EBITDA of 18.92. Conversely, companies like Swan Corp and Alok Industries are classified as risky due to losses, making Filatex’s stable earnings and attractive multiples stand out.

Filatex’s PEG ratio of 0.28 is notably low, indicating that the stock’s price is not fully reflecting its earnings growth potential. This contrasts with Trident’s PEG of 0.86 and Pearl Global’s 2.62, suggesting that Filatex offers a more favourable risk-reward profile for investors focused on growth at a reasonable price.

Stock Performance Relative to Sensex

Filatex India has outperformed the Sensex across multiple time horizons, reinforcing its appeal amid broader market volatility. Over the past week, the stock gained 10.16% compared to the Sensex’s 2.94%. The one-month return of 8.95% dwarfs the Sensex’s 0.59% gain, while year-to-date, Filatex has risen 5.47% against a 1.36% decline in the benchmark index.

Longer-term returns are even more impressive. Over five years, Filatex has delivered a 72.96% return, surpassing the Sensex’s 63.78%. The ten-year return is extraordinary at 1,271.50%, vastly outpacing the Sensex’s 249.97%. These figures highlight the company’s sustained growth trajectory and investor confidence despite sector cyclicality.

Market Capitalisation and Mojo Score

Filatex’s market capitalisation grade is rated 3, indicating a mid-sized company with moderate liquidity and investor interest. The company’s Mojo Score currently stands at 55.0 with a Mojo Grade of Hold, downgraded from Buy on 22 Dec 2025. This adjustment reflects the recent valuation grade change and a more cautious outlook on near-term price appreciation potential, despite solid fundamentals.

Investment Implications and Outlook

Filatex India Ltd’s shift from very attractive to attractive valuation grade suggests that while the stock remains a value proposition, some of the earlier bargain pricing has been absorbed by recent gains. The company’s low P/E and EV multiples relative to peers, combined with strong returns and operational efficiency, continue to make it a compelling candidate for investors seeking exposure to the Garments & Apparels sector at a reasonable price.

However, the downgrade in Mojo Grade to Hold signals that investors should temper expectations for rapid upside and consider the stock within a balanced portfolio context. The sector’s competitive dynamics and macroeconomic factors such as raw material costs and export demand remain key variables influencing future performance.

Historical Context and Sector Trends

Historically, Filatex’s valuation multiples have hovered in the very attractive range, reflecting periods of undervaluation relative to earnings and book value. The recent upgrade to attractive valuation grade indicates a partial re-rating, likely driven by improved earnings visibility and market sentiment. This is consistent with the company’s steady ROCE and ROE metrics, which have remained stable over recent quarters.

The Garments & Apparels sector has experienced mixed fortunes, with some companies facing margin pressures due to rising input costs and supply chain disruptions. Filatex’s relatively low EV to sales ratio of 0.49 and EV to capital employed of 1.74 suggest it is efficiently managing capital and sales generation, which may provide resilience amid sector headwinds.

Conclusion: Balanced Valuation with Growth Potential

Filatex India Ltd presents a nuanced investment case. Its valuation remains attractive compared to sector peers, supported by solid profitability and operational efficiency. The recent price appreciation and valuation grade adjustment reflect a market recognising these strengths but also factoring in potential risks and competitive pressures.

Investors should weigh the company’s strong long-term returns and reasonable multiples against the Hold rating and the evolving sector landscape. Filatex remains a noteworthy contender for those seeking value in the Garments & Apparels space, but a cautious approach is warranted given the recent moderation in valuation appeal.

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