CARE Reaffirms Faze Three Ltd Ratings Amid Revenue Growth, Capital Structure Strength

CARE Reaffirms Faze Three Ltd Ratings Amid Revenue Growth, Capital Structure Strength​

CARE Ratings Ltd has reaffirmed its credit rating for Faze Three Limited following a review of the company’s financial performance and operational scale. The ratings reaffirmation includes an enhanced rating for the combined long-term and short-term bank facilities, with CARE Ratings assigning Stable outlook status.

The total aggregated Bank Facilities that have been reaffirmed stand at Rs 280.00 crores. This includes Long Term Bank Facilities amounting to ₹40.00 crore, which hold a CARE A; Stable rating. Additionally, the Long Term / Short Term Bank Facilities amount to 240.00 (enhanced from 210.00), carrying a rating of CARE A; Stable / CARE A1.

The reaffirmation comes despite global geopolitical uncertainties and challenges related to trade tariffs that affected the company’s profitability in FY26. CareEdge Ratings noted a significant improvement in Faze Three Limited's scale, citing a 34% year-on-year growth in revenue to ₹923 crore in FY26, compared to ₹690 crore in FY25.

Operational Strength and Financial Health​

Ratings continued to derive strength from the company’s established track record in the home textile industry and its diverse product portfolio, which includes floor coverings, bathmats, and various top-of-the-bed products. Faze Three Limited maintained an adequate capital structure, with overall gearing reported at 0.69x and Total Outside Liabilities to Tangible Net Worth (TOL/TNW) at 0.89x in FY26.

The company has invested over ₹300 crore in the last four years towards expanding capacity for existing and new products, funded primarily through internal accruals. The management team is comprised of experienced promoters with over three decades of knowledge in the home textile industry.

Despite absorbing incremental tariffs and other operational costs due to market disruption, profitability was noted to have moderated by approximately 300 basis points year-on-year to a PBILDT margin of 10.12% in FY26 (FY25: 13.03%). The company also benefits from established relationships with major global big-box retailers in the US, the UK, and Europe, such as Walmart and Target, supporting revenue visibility.

Key Risks and Constraints​

CARE Ratings highlighted several constraints that impact the rating profile. The company faces a high geographical concentration risk, as over 60% of its revenue is derived from exports to the US market over the last five years. Additionally, the operations are noted for their high working capital intensity, resulting in an elongated working capital cycle.

The business remains susceptible to volatility in cotton and polyester prices, as well as foreign exchange rate fluctuations, given its export-oriented nature. However, the company maintains a defined hedging policy to mitigate these risks. Liquidity was assessed as adequate, with Cash Flow from Operations reported at ₹35 crore in FY26 (FY25: ₹7.03 crore).

Financial summary and rating details are presented below:


\*PBILDT: Profit before interest, lease rentals, depreciation and tax.

FAZE3Q Stock Price Movement​

Shares of Faze Three Limited are edging higher to ₹600.2 as of 12:47 PM today, climbing sharply by 4.99%. The stock sees active trading in the live market, with 7,175 shares executed so far.