Indian home textile exporters are expected to witness growth in their topline and bottomline on account of sustained demand and stable raw material prices. Mumbai-based India Ratings (Ind-Ra), a leading credit rating agency, has claimed this in its report.
In this report, the agency said that the home textile segment continued to exhibit demand resilience. It added that in home textiles, a sustained demand and stable raw material prices will lead to growth in exporters’ topline and bottomline.
It is also pertinent to mention here that India’s leading home textile companies like Welspun India and Trident Group have shown better financial results recently and are geared up to grow further.
In topline during FY‘21, home textile players reported a healthy rise; operating margins were impacted during the fourth quarter of FY‘21, on account of an import duty on cotton along with uncertainty over remission of duties and taxes on export products incentives, the report stated.
Meanwhile, cotton prices were rectified during April 2021, led by a lower demand from mills operating under lower capacities on account of micro lockdowns domestically.
The report also highlights that that while the US Department of Agriculture Foreign Agricultural Service (USDA-FAS) expects the domestic crop to increase by 2 per cent year-on-year in the next season commencing October 2021, consumption is slated to increase by 6-8 per cent Y-o-Y, leading to a reduction in ending stocks.
It further added that the marginal rise in production is despite an expected lower area under cultivation for the next season, albeit supported by a normal monsoon and increasing yield by 5 per cent to 497 kg per hectare.
