Bangladesh Crisis Sparks Rally in Indian Textile Stocks

ENA Sectors 2024-08-07 16:00:13 New Delhi, Aug 7 (KNN) In a significant market development on Tuesday, major Indian spinning and textile companies saw their stock prices surge amid the ongoing crisis in Bangladesh. Industry giants such as Vardhman Textiles, KPR Mills, GHCL Textiles, and Sportking recorded substantial gains throughout the trading day. V Nagappan, a seasoned stock analyst, offered insight into the upward trend, stating, Many of these companies have begun performing well under new and dynamic management, unlike in the past where owners operated like Zamindars. The next generation is doing better, and the uncertainty in Bangladesh, coupled with FDA issues, is contributing to this positive momentum. The stock price increase was anticipated by market insiders, who cited expectations that foreign buyers would increasingly look to India as part of a China Plus strategy. This shift comes as Bangladesh, which has built a formidable garment industry over the past decade, faces internal turmoil. In 2023, the global readymade garments market, where Bangladesh holds a competitive edge over India, was valued at approximately USD 1,110 billion. Export data highlights the current landscape: India's readymade garment (RMG) exports, including cotton accessories, stood at USD 16 billion in FY23, while Bangladesh's RMG exports reached an impressive USD 47 billion. Prabhu Dhamodharan, Convenor of the Indian Texpreneurs Federation in Coimbatore, commented on the potential shift in orders: We have some spare capacity available in India to handle an additional 20 per cent of orders immediately. He noted that concerns over timely delivery from Bangladesh might lead to order diversion, particularly for cotton apparel. However, the situation presents a complex picture for the Indian textile industry. While the apparel sector may benefit from potential order diversions, the spinning sector faces short-term challenges due to Bangladesh's position as a major buyer of Indian cotton yarn and fabrics. K Venkatachalam, Chief Advisor of the Tamil Nadu Spinning Mills Association, emphasised India's readiness to capitalise on this opportunity: If garment orders are diverted to India, the country has sufficient infrastructure to cater to any requirements. SK Sundararaman, Chairman of The Southern India Mills' Association (SIMA), predicted a temporary slowdown in yarn sales but expected stabilisation within a month. Neeraj Jain, Joint Managing Director of Vardhman Textiles Ltd, provided a balanced perspective during a recent financial results discussion: Bangladesh is our biggest customer for yarn exports, accounting for 25 per cent to 30 per cent of exports. (KNN Bureau) 38886 https://knnindia.co.in/news/newsdetails/sectors/bangladesh-crisis-sparks-rally-in-indian-textile-stocks 2024-08-07 16:00:13 knnindia.co.in Bangladesh Crisis Sparks Rally in Indian Textile Stocks