India’s Home Textile Industry To Grow 6-8%

ENA Sectors 2024-11-06 17:01:12 New Delhi, Nov 6 (KNN) Indias home textile industry is on track to achieve 6-8 per cent revenue growth in the current fiscal year, bolstered by robust demand from key export markets, notably the United States, and a strategic push into the domestic market. This forecast comes on the heels of a strong 9-10 per cent rebound in revenue growth in the previous year, as reported by Crisil Ratings. The sector, which draws approximately 70-75 per cent of its revenue from exports, is heavily reliant on the U.S., which alone contributes 60 per cent of these exports. Crisils Senior Director Mohit Makhija attributes this years growth prospects to three core factors: sustained consumer spending in the U.S., normalised inventory levels at major American retailers, and the industrys focus on deepening its domestic market reach. Despite lingering logistical hurdles such as container availability, Makhija remains optimistic about steady export momentum. The industrys competitiveness is further strengthened by stable cotton prices, a critical raw material, which are projected to align closely with international rates. This pricing balance should help Indian manufacturers maintain their market share in the U.S., which has held steady at 30 per cent of U.S. imports from January to August 2024. Makhija notes that recent dips in global cotton prices, due to high supply from countries like Brazil and the U.S., have yet to affect Indian exports significantly. With Indias cotton season beginning, any price gaps between domestic and international markets are expected to narrow, safeguarding Indias competitive edge. The operating margin for the industry is projected to remain stable at around 14-15 per cent, matching last years performance. Investment has also been a focus, with the industry injecting â¹8,500 crore into capacity expansion from 2019 to 2024, which now sees capacity utilization stabilizing between 60-70 per cent. Larger firms, though maintaining moderate capital expenditure (capex), are prioritizing operational efficiency to optimize utilization, all while benefiting from deleveraged balance sheets. The industrys financial health appears stable, with an interest coverage ratio forecasted at 5-6 times. Crisil Ratings Associate Director Pranav Shandil notes that healthy cash flow will limit the need for external debt, keeping total liabilities to net worth low at approximately 0.6-0.7 times. While the outlook remains optimistic, industry leaders will need to monitor potential risks, such as a slowdown in U.S. demand or unexpected rises in domestic cotton prices. (KNN Bureau) 39827 https://knnindia.co.in/news/newsdetails/sectors/indias-home-textile-industry-to-grow-6-8 2024-11-06 17:01:12 knnindia.co.in India’s Home Textile Industry To Grow 6-8%