5 Textile Stocks with Strong Growth Plans

#2 Welspun Living

Second on the list is Welspun Living.

Welspun Living (WLL) is a global leader in the home textiles industry. WLL maintains partnerships with top global retailers and exports its products to over 60 countries.

Home Textiles is the company's largest division, accounting for roughly 92% of its revenue in FY26. WLL is a leading global supplier of towels, bath rugs, and sheets. WLL's presence also spans advanced textiles and flooring solutions.

To capture demand, WLL is making targeted capital investments while maximizing existing capacities. The company's Ohio facility (US) is currently operating at 60% utilization. WLL invested US $13 m in a new Greenfield pillow plant in Nevada with a capacity of 4.5 m pieces on 31 March 2026.

It plans to double its pillow business revenue from US$ 27.5 m in FY26 to approximately US$ 60 m in FY27.

WLL is also aiming to achieve Rs 10 bn in flooring revenue, up from Rs 7.4 bn in FY26. Increasing demand for high-margin (20%+) soft flooring products across the commercial and hospitality segments will drive this growth.

The company is also expanding its flooring business in Australia and New Zealand, which could provide an additional growth lever for the segment.

While FY26 faced utilization pressures, WLL expects capacity utilization across its core towel, sheet, and bath rug segments to rebound to above 86% in FY27.

With its currently optimized capacities, WLL estimates a peak revenue potential of around Rs 120 bn.

It aims to push its non-US revenue contribution from the current 41% to over 50% in the medium term.

In India, management anticipates consistent growth of 26-30%. The company aims to scale its domestic consumer brand portfolio (Welspun and Spaces) toward the Rs 10 bn mark, up from Rs 6.6 bn in FY26. The portfolio now accounts for 19.3% of total revenue.

From an earnings perspective, it expects margin expansion and strong cash flow generation following the reduction in US tariffs.

The company expects FY27 EBITDA margins (current 9.1%) to advance into the "teens". Their normalized medium-term aspiration is to restore EBITDA margins to 15% or higher.

ROCE also dipped to 5.6% in FY26. Management has guided ROCE to exceed 15% over the next three years, driven primarily by an asset-light growth strategy.

Another key development could be achieving net debt zero by FY27. WLL's free cash flow stood at Rs 9.6 bn in FY26. This allowed WLL to reduce its net debt by 52% to Rs 7.7 bn.

From a financial perspective, total income declined 11.5% to Rs 94.7 bn in FY26. EBITDA declined 40.6% to Rs 8.6 bn with margins at 9.1%. Net profit dropped 68% to Rs 2 bn.

Looking ahead, management is targeting double-digit revenue growth in FY27. The planned capex is Rs 4.5 bn for modernisation, automation, and debottlenecking.

Check out Welspun Living's financial factsheet and quarterly results to know more.

#3 Vardhman Textiles

Third on the list is Vardhman Textiles.

Vardhman operates as India's largest vertically integrated textile manufacturer. Yarn is the backbone of Vardhman's operations, accounting for 65% of the revenue. It's the largest producer of yarn in India, with an installed capacity of over 1.25 m spindles.

The fabric division is the company's second-largest segment, contributing 35% of revenue. The Indian market accounts for 56% of its revenue, while exports contribute the remaining 44%.

It's expanding capacity to capture market demand. In the yarn segment, the company completed an expansion of about 15,600 spindles in H1FY26 and then an additional 17,000 spindles.

Management is also restarting an open-ended spinning project that was previously put on hold.

In its fabric division, Vardhman is diversifying and expanding. In March 2026, it commenced commercial production of an additional 31 m meters of processed fabric annually, along with an 18 m meter line dedicated to performance fabrics (synthetic woven).

This plant is expected to reach optimal capacity utilisation over the next 6-9 months. This expansion positions Vardhman to tap into the 100% synthetic fabric market, where domestic competition is limited.

To capitalize on strong relationships with existing brands and improve the cost structure of its smaller garmenting operations, it also approved an investment of around Rs 1.3 bn.

The garmenting segment is currently small. It plans to invest around Rs 1.3 bn to improve the business's cost structure. The strategy is to utilise strong relationships with existing brands to scale this vertical. The investment will double the garment's annual capacity from 2.2 m to 4.5 m shirts by the end of FY27.

To further expand its capacity, it has acquired new land in the PM MITRA Park in Madhya Pradesh.

The land is expected to be handed over by December 2026 or January 2027. This would allow Vardhman to begin planning its next phase of capacity expansion to meet anticipated demand.

From a financial perspective, total income declined slightly by 0.3% to Rs 99.3 bn in FY26, mainly due to US import tariffs, volatile domestic cotton prices, and geopolitical tensions. EBITDA declined 8% to Rs 14.9 bn with margins at 15.1%. Net profit dropped 16% to Rs 7.4 bn.

Looking ahead, management expects better performance in FY27, driven by a 40-50% expansion in yarn spreads, the alignment of Indian cotton prices with international markets, and strong export demand.

Check out Vardhman Textiles' financial factsheet and quarterly results to know more.

#4 Arvind

Fourth on the list is Arvind.

Arvind is a diversified manufacturing enterprise whose core operations are divided into two primary segments: Textiles and Advanced Materials.

In the textiles and garments, the company is a major producer of denim and woven fabrics. The segment contributes 74.1% to revenue. The remaining comes from advanced materials.

Strategic international acquisitions, capacity expansions, and favorable sector-specific demand drive the company's expansion strategy.

A key part of Arvind's growth strategy is the acquisition of a 61% stake in US-based Dalco-GFT. The acquisition gives Arvind a presence in a US $2.5 bn market across multiple product segments. Achieving a similar scale, customer base, and market access on its own would have taken several years.

It also provides Arvind with manufacturing facilities in North and South Carolina, bringing production closer to customers in the US.

The Dalco-GFT acquisition is both margin and EPS-accretive at the consolidated Arvind level. It generates a 17% EBITDA margin and previously achieved a 40% Return on Capital Employed. Arvind aims to accelerate the business growth rate at 15%+ from the historical growth of 10%.

To achieve this, Arvind plans to invest US$ 5 m annually in Dalco-GFT to add one new manufacturing line per year. This capacity expansion would resolve the capacity bottleneck.

The US facilities are currently operating at around 85% capacity, leaving room for further expansion. The plants also have enough space to add three more production lines, ensuring that capacity is unlikely to be a bottleneck as the business grows.

On the domestic front, Arvind intends to invest Rs 4.5-5 bn in FY27 in its garmenting and advanced materials divisions. This will be funded entirely by its free cash flow.

The garmenting division continues to be a growth engine. It recently crossed the milestone of producing over 10 m pieces for the third consecutive quarter and surpassed Rs 20 bn in annual revenue.

From a financial perspective, total income grew by 12% to Rs 93 bn in FY26. EBITDA grew 15% to Rs 10.6 bn with margins at 11.4%. Net profit grew 21% to Rs 4.4 bn.

Check out Arvind's financial factsheet and quarterly results to know more.

#5 Gokaldas Exports

Fifth on the list is Gokaldas Exports.

Gokaldas is a leading apparel manufacturer that designs, develops, and exports a range of clothing for all seasons. It has an annual production capacity of 87 m pieces.

In FY26, North America was the dominant end-market at 77.9%, followed by Asia at 12.2% and Europe at 9.3%. The company is strategically pivoting its product mix to capture higher-value segments.

It successfully onboarded four new premium brands (two for India operations and two for Africa), which will begin contributing to revenues in FY27.

To sustain an expected growth rate of minimum 15%, it's continuously scaling its physical infrastructure and improving operational efficiency.

Following recent capacity additions, the company's manufacturing capacity is poised to reach 104 m pieces, comprising about 52 m pieces in India and 40 m pieces in Africa, with additional expansions.

A manufacturing unit in Karnataka (Kolar Gold Fields) is currently ramping up and will hit full capacity in H1FY27. This will add about Rs 1.3 bn to revenues.

Concurrently, a new plant in Bhopal is expected to reach full capacity by Q3FY27, adding about Rs 1.8 bn to the top line.

Beyond its ongoing expansion, it may greenlight two new factories with a planned capital expenditure of Rs 0.8-1 bn over two years. These facilities are expected to add around Rs 3 bn to revenue by FY28.

In the overseas market, physical capacity expansion in Africa was largely completed last year. It now plans to drive output by introducing a second shift. The African business is also showing signs of revival.

A major growth driver could be Gokaldas merger with Bombay Rayon (BPTL). The merger is expected to conclude in Q3FY27 and will add significant scale.

BTPL has a current capacity of 7 m meters of fabric, which can be scaled up to 10 m of fabric. Its current capacity utilisation is approaching 5 m meters. BTPL revenue is expected to cross Rs 10 bn in FY27.

EBITDA break-even is likely in H1FY27, with margin projected to reach 12% by FY28 and 14% by FY29.

From a financial perspective, total income grew 4% to Rs 40.7 bn in FY26. EBITDA grew 2% to Rs 4.3 bn with margins at 10.7%. Net profit declined 37% to Rs 1 bn due to geopolitical headwinds.

Check out Gokaldas Exports' financial factsheet and quarterly results to know more.

Bottom line

The next phase of growth in India's textile sector is unlikely to be driven by industry tailwinds alone.

It will depend on which companies can convert capacity additions, new customer wins, acquisitions, and margin initiatives into sustainable earnings growth.

The five companies on this list have laid out some of the most visible expansion plans in the sector. The key question now is not whether opportunities exist, but who can execute best.

On the risk side, the heavy reliance on the US market remains a key concern, as any increase in tariffs could affect export growth and profitability.

Thus, instead of relying solely on hype, investors need to carefully analyse the company's fundamentals, including financial performance, corporate governance practices, and growth strategies.

Happy investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...