Driven by heightened demand from the US and Europe, and a favorable currency depreciation, Bangladeshi T&A firms experienced a growth in revenue and profit during Q2, FY25 spanning October-December 2024. According to a ‘Textile Sector Update’ by CAL Securities, listed textile companies achieved a 20 per cent Y-o-Y revenue growth, reaching Tk44 billion during the quarter.
Revenues of apparel exporters grew by 43.1 per cent Y-o-Y Contributing nearly half of the sector's revenue, spinning mills reported a 23.5 per cent growth. Dyeing, fabric, and denim segments also experienced growth, while the home textile segment saw a slight decline.
The sector's net profit increased by 72 per cent Y-o-Y to Tk2.2 billion, with net profit margins improving to 5 per cent from 3.5 per cent. Lower cotton prices were a key factor in this profitability boost, despite the impact of elevated interest rates.
Bangladesh's ready-made garment (RMG) exports grew by 12 per cent in H1, FY25, despite political and labor disruptions. This recovery was fueled by increased demand from developed markets, supported by declining inflation and monetary easing.
Looking ahead, CAL Securities predicts, higher US tariffs on Chinese imports will shift more orders to emerging markets. However, Bangladesh needs to focus on value addition to remain competitive. While US apparel imports increased, Bangladesh's market share grew only slightly, indicating a need for diversification and high-value product expansion.
Segment-wise, Malek Spinning led the spinning sector with a 24 per cent revenue growth. Esquire Knit Composite dominated the apparel segment with an 80 per cent revenue increase and a profit turnaround. Envoy Textile led the denim segment with a 22 per cent revenue growth and a 158 per cent profit surge. Other notable performers included Square Textile, Matin Spinning, Queen South Textile, Monno Fabrics, Rahim Textile, Paramount Textile, Fareast Knitting, Shepherd Industries, and ML Dyeing. Conversely, ShaSha Denim, Evince Textile, and Hwa Well Textile underperformed. This robust performance signals a positive outlook for Bangladesh's textile industry, contingent on strategic adjustments to capitalize on global opportunities.
