Global Textile Industry Recovers, But Demand Remains Subdued: Report

ENA Sectors 2024-07-03 15:38:37 New Delhi, Jul 3 (KNN) A recent report by Avendus Spark indicates that the global textile industry is exhibiting signs of recovery, with inventory levels of international retailers and brands returning to pre-pandemic norms. However, the industry maintains a cautious stance on demand, as garment companies await a resurgence in order book momentum. In the fourth quarter of fiscal year 2024, the sector experienced an 8 per cent year-on-year revenue growth. This growth was tempered by a 5 per cent decline in yarn prices, which constrained overall expansion. The report suggests that as cotton prices stabilise, value growth is expected to align with volume growth in the near future. Indian cotton prices, which were briefly lower than global rates, have now risen to approximately 13 per cent above international levels. This temporary price advantage boosted demand and helped cotton spinners increase their volumes. Despite the challenges posed by price fluctuations, garment manufacturers reported a 4 per cent revenue growth. Home textile companies emerged as strong performers, with a 16 per cent value growth. Indian exporters gained market share, with the country's share in US cotton sheet imports reaching a record high of 62 per cent. However, EBITDA margins in this segment fell by 80 basis points, potentially indicating a slowdown in volume demand. The Man-Made Staple fibres (MMSF) sector saw a 5 per cent year-on-year revenue growth, although it faced pricing pressures due to cheaper imports from countries like China and Bangladesh. Capacity constraints limited volume growth opportunities, but several companies plan to increase capacity in the coming quarters. The Production Linked Incentive (PLI) scheme is expected to encourage further investments in MMSF yarn production. Cotton-related exports showed significant growth, increasing by 20 per cent sequentially and 18 per cent year-on-year. Cotton spinning companies achieved 5 per cent revenue growth year-on-year, driven by strong volume growth despite the decline in yarn prices. In the garment manufacturing sector, EBITDA margins improved by 177 basis points in Q4FY24, primarily due to lower input costs. Vertically integrated players reported better margin growth compared to their peers. While the textile industry shows promising signs of recovery, the report suggests that the order cycle may remain shorter than usual for the foreseeable future, reflecting the sector's cautious optimism. (KNN Bureau) 38452 https://knnindia.co.in/news/newsdetails/sectors/global-textile-industry-recovers-but-demand-remains-subdued-report 2024-07-03 15:38:37 knnindia.co.in Global Textile Industry Recovers, But Demand Remains Subdued: Report