Textile sector set for revival


17 June 2023, Mumbai

After a challenging year of sluggish demand, excessive inventory, limited supplies, and soaring cotton prices, the textile industry is set to bounce back.
Challenging year Spurs resurgence
Experts predict a resurgence in demand, particularly in the third quarter of FY24, as global retailers reduce stockpiles and place orders for the upcoming Summer/Spring 2024 collections.
Demand on the rise  
Favorable market conditions, coupled with geopolitical uncertainties faced by competitor nations, are expected to inject vitality into the sector.
As a result, textile players are anticipated to witness consistent earnings growth and improved cash flows.
Having completed their capital expenditure, companies will now focus on strengthening their balance sheets and enhancing return ratios.
Favorable conditions bring vitality  
Moreover, the decline in cotton and crude prices will bolster profit margins and enhance India's competitiveness in export markets. The industry has already gained market share in crucial export markets for garments and home textiles. Focus on strengthening  
The potential for a UK free trade agreement and the China+1 strategy further augments the sector's prospects for improving earnings and multiples.
Additional opportunities; Sharekhan has upgraded its outlook on the textile sector to 'positive,' recommending Gokaldas Exports, KPR Mill, Himatsingka Seide, and SP Apparels as preferred picks.

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