Indian textile sector shows signs of post-pandemic recovery: Report - World News Network

New Delhi [India], July 2 (ANI): The textile industry is seeing signs of recovery, with global retailers and brands reporting that their inventory levels have returned to pre-COVID standards, a recent report of Avendus Spark observed.
However, it highlights a cautious outlook on demand as garment companies await a boost in order book momentum. This cautious optimism suggests that the order cycle may remain shorter than usual for the foreseeable future.”Garment companies are still awaiting a revival in order book momentum,” the report added.
The report added that Indian cotton prices are currently lower than global prices, helping cotton spinners grow their volumes. In the last quarter of the fiscal year 2024 (4QFY24), the sector’s revenue grew by about 8 per cent compared to the previous year. However, yarn prices fell by 5 per cent, which limited the overall growth. With cotton prices stabilising, the value growth is expected to align with volume growth soon.
During this quarter, the home textile companies had a strong quarter, with a 16 per cent value growth, as Indian exporters gained market share, the report observed.
Despite the challenges of price changes, the garment manufacturers reported a 4 per cent revenue growth. Cotton spinners enjoyed robust margin expansion due to higher utilisation and stable cotton prices, as per the observation.
The Indian Textile report observed that despite a 5 per cent decline in yarn prices, cotton spinning companies achieved 5 per cent revenue growth yoy due to strong volume growth. Cotton-related exports increased by 20 per cent sequentially and 18 per cent yoy. Indian cotton prices were briefly lower than global prices, boosting demand. Currently, Indian cotton prices are about 13 per cent higher than global prices.
In 4QFY24, EBITDA margins for garment manufacturers improved by 177 basis points, primarily due to lower input costs. Vertically integrated players reported better margin growth compared to peers, it added.
Among the various textile verticles, home segments continue to shine as per the report as home textile companies outperformed with a 15 per cent yoy revenue growth due to strong demand and increased exports. India’s market share in US cotton sheet imports reached an all-time high of 62 per cent, Avendus Spark said.
However, EBITDA margins fell by 80 basis points, suggesting a possible slowdown in volume demand. Man-Made Staple Fibers (MMSF) saw a 5 per cent yoy revenue growth. The cheaper imports from countries like China and Bangladesh led to pricing pressures. Capacity constraints limited volume growth opportunities for MMSF players. Several companies plan to increase capacity in the coming quarters, potentially driving growth. The Production Linked Incentive (PLI) scheme is expected to encourage further investments in MMSF yarn production, Avendus Spark observed in the report.

“The top layer of exporters has started getting booked. The next couple of layers of exporters in most of the big hubs are getting many enquiries and everyone is hopeful that these enquiries will result in an order book that would be better than last year,” said Pawan Gupta, CEO and Co-founder of Fashinza reacting on the report.(ANI)

Disclaimer: This story is auto-generated from a syndicated feed of ANI; only the image & headline may have been reworked by News Services Division of World News Network Inc Ltd and Palghar News and Pune News and World News