Revenues of the Indian home textile industry will boost by 7-9 percent in the current fiscal ending March 31, 2024, as against a 15 percent decline in the previous fiscal.
“This will happen as India regains global share, following a correction in domestic cotton prices and restocking by big retailers in various countries,” Care Ratings said in a report.
The report also added that operating profitability will also expand 150-200 basis points to 14.0-14.5 percent, due to lower raw material cost and better operating leverage, but will still be below pre-pandemic levels.
Credit ratings of these companies will continue to be stable, with an ongoing capital expenditure (capex) cycle in its last leg in the current fiscal, and also a result of healthy cash accrual, led by improved revenue growth and profitability, keeping leverage in check.
The report also stated that after strong headwinds in exports in the earlier fiscal, the Indian home textile industry is on the road to recovery.
But capacity utilization will improve slowly because of the recent large capacity addition amid moderate demand growth and that will continue to keep operating margins below pre-pandemic levels.
The home textiles sector is amid an INR 4,000 crore capex, planned to be completed by the end of fiscal 2024.
The rating agency analyzed data from 40 companies, which account for 40-45 percent of revenues from the Indian home textiles industry.
The industry generates 70-75 percent of its turnover from exports, with the US, accounting for more than 50 percent of its exports.
Revenues of Indian home textiles sector to boost 7-9% this fiscal
