Indian Textiles Industry Report - Textiles Sector Research & Analysis in India - Equitymaster
X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2019 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Textiles Sector Analysis Report 

[Key Points | Financial Year '18 | Prospects | Sector Do's and dont's]

  • India's textiles sector is one of the oldest industries in Indian economy dating back several centuries. India's overall textile exports during FY18 stood at US$ 39.2 billion.
  • The size of India's textile market as of November 2017 was around US$ 150 billion, which is expected to touch US$ 223 billion market by 2021, growing at a CAGR of 12.2% between 2009-21. (Source IBEF)
  • The new textile policy aims to achieve US$ 300 billion worth of textile exports by 2024-25 and create an additional 35 million jobs. (Source IBEF)
  • The Indian textiles industry is extremely varied, with the hand-spun and hand-woven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum. The decentralised power looms/ hosiery and knitting sector form the largest component of the textiles sector. The close linkage of the textile industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries. The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and across the world.
  • The Indian textiles industry, currently estimated at around US$ 150 billion, is expected to reach US$ 250 billion by 2019. India's textiles industry contributed 7% of the industry output (in value terms) of India in FY18. (Source IBEF)
  • As per data from National Bureau of Statistics, due to steep wage inflation, the average monthly wage cost in China stood at US$ 230 per month in 2013 as against US$ 80 per month in India. Also, India is rich in traditional workers adept at value-adding tasks, which could give Indian companies significant margin advantage. However, India's inflexible labor laws have been a hindrance to investments in this segment. Unlike in home textiles, garment capacities are highly fragmented and leading Indian textile companies have been slow to ramp up their apparel capacities, despite strong order flows from overseas buyers who are trying to diversify out of China.
  • Rising per capita income, favourable demographics and a shift in preference to branded products to boost demand. The domestic textile industry in India is projected to reach US$ 223 billion by 2021F (Forecasted) from US$ 150 billion in November 2017. (Source IBEF)

How to Research the Textiles Sector (Key Points)

  • Supply
  • Despite some pick-up in demand from both global and domestic markets, most new capacities in the apparel and home textile segments are not operating at full capacities.
  • Demand
  • High for premium and branded products due to increasing per capita disposable income.
  • Barriers to entry
  • Superior technology, skilled and unskilled labour, distribution network, access to global customers.
  • Bargaining power of suppliers
  • Because of oversupply in the unorganised market like that of denim, suppliers have little bargaining power. However, premium products and branded players continue to garner higher margins.
  • Bargaining power of customers
  • Domestic customers - Low for premium and branded product segments. Global customers- High due to presence of alternate low-cost sourcing destinations.
  • Competition
  • High. Very fragmented industry. Competition from other low cost producing nations is likely to intensify.

top ↑

Financial Year '18

  • Favourable trade policies and superior quality to drive textile exports. India's textile and apparel exports stood at US$ 39.2 billion in FY18 and is expected to increase to US$ 82 billion by 2021 from Rs 1.3 trillion (US$ 18.5 billion) in FY19.
  • Increase in domestic demand set to boost cloth production. Cloth production in FY18 stood at 67.4 billion square metres (provisional) and stood at 33 billion square metres (provisional) in FY19.
  • 100% FDI (automatic route) is allowed in the Indian textile sector. Under Union Budget 2018-19, the government has allocated Rs 300 million (US$ 4 million) for the Scheme for Integrated Textile Parks, under which there are 47 ongoing projects. Free trade with ASEAN countries and proposed agreement with European Union will boost exports.
  • In May 2018, textiles sector recorded investments worth Rs 270 billion (US$ 4 billion) since June 2017.
  • India's textiles industry contributed 7% of the industry output (in value terms) of India in 2017-18. It contributed 2% to the GDP of India and employs more than 45 million people in 2017-18. The sector contributed 15% to the export earnings of India in 2017-18.

top ↑

Prospects:

  • Huge investments are being made by Government under Scheme for Integrated Textile Parks (SITP) - (US$ 185 million) and Technology Upgradation Fund Scheme (TUFS) - (US$ 216.2 million released in 2017) to encourage more private equity and to train workforce.
  • Increased penetration of organised retail, favourable demographics and rising income levels to drive textile demand. Growth in building and construction will continue to drive demand for non-clothing textiles.
  • In FY19, growth in private consumption is expected to create strong domestic demand for textiles.
  • Textile and apparel exports from India are expected to increase to US$ 82 billion by 2021. Exports of textiles and Apparels from India reached Rs 1.3 trillion (US$ 18.5 billion) in FY19.

top ↑

Related Links for Textiles Sector
Quarterly Results | Sector Quote | Over The Years

Views on News

NAHAR SPINNING M Announces Quarterly Results (3QFY19); Net Profit Up 830.6% (Quarterly Result Update)

Feb 15, 2019 | Updated on Feb 15, 2019

For the quarter ended December 2018, NAHAR SPINNING M has posted a net profit of Rs 213 m (up 830.6% YoY). Sales on the other hand came in at Rs 6 bn (up 4.1% YoY). Read on for a complete analysis of NAHAR SPINNING M's quarterly results.

BANSW.SYNTEX Announces Quarterly Results (3QFY19); Net Profit Down 134.9% (Quarterly Result Update)

Feb 15, 2019 | Updated on Feb 15, 2019

For the quarter ended December 2018, BANSW.SYNTEX has posted a net profit of Rs 10 m (down 134.9% YoY). Sales on the other hand came in at Rs 3 bn (up 0.8% YoY). Read on for a complete analysis of BANSW.SYNTEX's quarterly results.

ALOK INDUSTRIES 2017-18 Annual Report Analysis (Annual Result Update)

Jan 24, 2019 | Updated on Jan 24, 2019

Here's an analysis of the annual report of ALOK INDUSTRIES for 2017-18. It includes a full income statement, balance sheet and cash flow analysis of ALOK INDUSTRIES. Also includes updates on the valuation of ALOK INDUSTRIES.

BOMBAY RAYON F 2017-18 Annual Report Analysis (Annual Result Update)

Jan 22, 2019 | Updated on Jan 22, 2019

Here's an analysis of the annual report of BOMBAY RAYON F for 2017-18. It includes a full income statement, balance sheet and cash flow analysis of BOMBAY RAYON F. Also includes updates on the valuation of BOMBAY RAYON F.

More Views on News

Most Popular

7 Stocks to Profit from Sensex 100,000(The 5 Minute Wrapup)

Feb 4, 2019

Tanushree Banerjee explains everything you need to know about the Rebirth of India and Sensex 100,000.

The RCom Bankruptcy: 5 Lessons for Smallcap Investors(Profit Hunter)

Feb 7, 2019

Managements of companies can create or ruin their fortunes. Why is management quality such an important factor in valuing businesses? Read on to find out...

Here's What the Biggest 'Rebirth of India' Investors are Doing(The 5 Minute Wrapup)

Feb 5, 2019

A roundtable on the 18th of January 2019 had investors with billions of dollars of investment kitty.

The One Real Estate Stock to Buy Now(The 5 Minute Wrapup)

Feb 13, 2019

The real estate sector is ready to make a comeback. This is the stock to consider buying.

Do You Have the Stomach to Survive a Small Cap Crash?(Profit Hunter)

Feb 5, 2019

While selecting good businesses is relatively easy task in a bearish phase, where most people fail is in having enough patience to hold the quality stocks until recovery.

More

Get the Indian Stock Market's
Most Profitable Ideas

How To Beat Sensex Guide 2019
Get our special report, How to Beat Sensex Nearly 3X Now!
We will never sell or rent your email id.
Please read our Terms

COMPARE COMPANY

MARKET STATS