With anticipated recovery of Textiles, Dyes & pigments industry may bounce back in FY24: Report

New Delhi, July 25 (KNN) The domestic dye, dye intermediates, and pigment (D&P) industry in FY23 faced significant hurdles due to volatile input costs, high inflation across major economies, disruptions stemming from the Russia-Ukraine war, and stiff competition from low-cost Chinese products, according to a report by CareEdge Ratings.

However, a glimmer of hope shines on the horizon for H2FY24 as an anticipated revival in demand from the textile industry and stabilization of input prices could bolster the industry’s performance, the report pointed out.

Despite the subdued performance, the solvency position of major players in the D&P industry is expected to remain relatively comfortable in FY24. This observation bodes well for their ability to manage capital expenditure and incremental working capital requirements, reported Mint stating from the CareEdge Ratings report.

Kalpesh Patel, Director at CareEdge Ratings said, “The Dye, Dye Intermediates, and Pigment industry is poised for recovery after the challenges faced in FY23. The demand from the textile industry is expected to improve in H2FY24, though H1FY24 may remain subdued.”

“This anticipated rebound should result in moderate volume growth and a slight improvement in profitability as input costs stabilize. Further, the major players in the industry are likely to maintain comfortable debt protection metrics with controlled leverage and stable interest rates. This positions them well to handle any capital expenditure or incremental working capital requirements," he said.

CareEdge Ratings‘ rated portfolio revealed a moderation with the Modified Credit Ratio (MCR) declining below unity during FY23. However, the credit risk profile of major players is expected to remain stable in the near to medium term, thanks to the expected improvement in the current fiscal year.

Despite this positive outlook, smaller and mid-sized industry players with a more leveraged capital structure may continue to face vulnerability amid the ongoing headwinds.  (KNN Bureau)