1. At a Glance
Faze Three is that rare beast in the home textile jungle—quietly exporting rugs and bathmats to top retailers across the US, UK, and EU. But can a company selling cushions at Walmart deliver cushiony returns on Dalal Street?
2. Introduction with Hook
Imagine an Indian company selling your bathroom mat to Bed Bath & Beyond… and then buying back its own stock at 2x book value.
- FY25 Revenue: ₹659 Cr
- FY25 Net Profit: ₹40 Cr
- ROE: 10%
- EPS: ₹16.38
- 5-year stock CAGR: 83%
Not bad for a company that started with seat covers and moved on to home furnishing dominance.
3. Business Model (WTF Do They Even Do?)
Faze Three operates primarily in home textiles and technical textiles:
- Home Textile: Bath mats, rugs, throws, cushion covers, curtains, table linens
- Automotive/Technical: Car seat fabrics, outdoor textiles
- Eco-Innovation: RePOLY (recycled yarns), Germieshield, Protector Yarn
Clients include leading retail chains in US/EU, OEM auto suppliers, and e-com platforms.
Their model? Direct exports, manufacturing from India, proprietary yarns, and tight B2B relationships.
4. Financials Overview
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 548 | 536 | 659 |
| EBITDA | 100 | 90 | 76 |
| Net Profit | 57 | 42 | 40 |
| EPS (₹) | 23.6 | 17.3 | 16.4 |
| OPM (%) | 18% | 17% | 11% |
Flag Raised: Topline revived in FY25, but operating margins are shrinking. Raw material inflation?
5. Valuation
- CMP: ₹686
- TTM EPS: ₹16.4
- P/E: ~41.9x
- Book Value: ₹171 → P/B: 4.0x
Fair Value Estimate
| Basis | Range (₹) |
|---|---|
| P/E @ 25x | ₹410 |
| P/E @ 35x (growth opt.) | ₹570 |
| DCF Estimate | ₹520–₹580 |
EduInvesting FV Range: ₹475 – ₹575
Current price is richly priced—baking in long-term growth.
6. What’s Cooking – News, Triggers, Drama
- Buyback bonanza (FY24): Share repurchase executed
- New acquisitions: Mats & More subsidiary picked up a new unit
- Sold stake in V.R. Woodart – non-core exit
- ESOP Scheme 2024 launched – talent retention on radar
- CARE rating upgraded in Aug 2024
Watch this space: More branded exports and private label tie-ups could be growth juice.
7. Balance Sheet 💰
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | 24 | 24 | 24 |
| Reserves | 312 | 354 | 392 |
| Borrowings | 173 | 169 | 180 |
| Total Assets | 543 | 587 | 668 |
| Fixed Assets | 212 | 243 | 279 |
Balance Sheet View: Capex-heavy year. Debt crept up. Networth expanded but slower than topline.
8. Cash Flow – Sab Number Game Hai
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Cash from Ops | 109 | 35 | 29 |
| Cash from Investing | -47 | -42 | -45 |
| Cash from Financing | -6 | -18 | -7 |
| Net Cash Flow | 56 | -26 | -24 |
FY23 had exceptional cash gen. FY25 sees cash flow stress due to investments. Free cash flow… meh.
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE (%) | 19% | 15% | 11% |
| ROE (%) | 23.6% | 17.3% | 10.0% |
| Debt/Equity | 0.55 | 0.47 | 0.46 |
| OPM (%) | 18% | 17% | 11% |
| Working Cap Days | 112 | 135 | 142 |
Warning Signs: Margin dip + rising WC cycle = red flags. Needs better operational grip.
10. P&L Breakdown – Show Me the Money
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 548 | 536 | 659 |
| EBITDA | 100 | 90 | 76 |
| Net Profit | 57 | 42 | 40 |
| EPS | 23.6 | 17.3 | 16.4 |
Net profit hasn’t scaled with revenue. Maybe temporary? Or signs of margin pressure?
11. Peer Comparison
| Company | CMP (₹) | P/E | ROE % | Sales (₹ Cr) | OPM % |
|---|---|---|---|---|---|
| Faze Three | 686 | 41.9 | 10.0 | 659 | 11% |
| KPR Mill | 1,180 | 50.6 | 17.0 | 6,388 | 19.5% |
| Trident | 31.5 | 43.4 | 8.3 | 6,987 | 13.0% |
| Welspun Living | 142.8 | 21.7 | 13.7 | 10,545 | 12.3% |
Verdict: Valuation not justified by size or margins. But still early innings if branding/export story clicks.
12. Miscellaneous – Shareholding, Promoters
| Class | Jun 2023 | Mar 2025 |
|---|---|---|
| Promoters | 56.16% | 57.95% |
| FIIs | 0.00% | 0.02% |
| DIIs | 0.36% | 0.26% |
| Public | 43.47% | 41.65% |
| Shareholders | 11,131 | 12,323 |
Promoters increasing stake slowly. Public holding steady. No major institutional love… yet.
13. EduInvesting Verdict™
Faze Three is not your average textile player. The export edge, tech textile innovation, and focus on direct retail clients give it serious tailwinds.
But the FY25 numbers show margin compression, weak cash flows, and bloated valuation. Execution will need to fire in all rooms—manufacturing, working capital, and branding.
Right now? The rug looks plush. But check under the mat before jumping in.
Metadata
Written by EduInvesting Analyst | 20 July 2025
Tags: Faze Three, Home Textiles, Export Stocks, Smallcap, B2B Retail Suppliers, Technical Textiles
