Feedback Here

fbook  tweeter  linkin YouTube
Global contents also translated in Chinese

India’s textile sales drop 51% in Q1 as COVID-19 mutes demand: Wazir study


Indias textile sales drop 51 in Q1 as COVID 19 mutes demandIndia’s textiles sales dropped 51 per cent from 130.9 to 56.4 per cent in the first quarter of the current financial year, compared to the corresponding quarter of the last fiscal, reveals Wazir Textile Index done by Wazir Advisors. Arvind, Vardhman Textiles, Welspun India, Trident, Raymond, KPR Mill, Filatex, RSWM, Sutlej Textiles, Nahar Spinners emerged the top 10 players during the quarter.

Among these, Arvind’s sales declined 72 per cent from Rs 1,742 in Q1 FY20 to Rs 493 crore in Q1 FY21; Vardhman Textiles’ declined 51 per cent from Rs 1, 558 crore to Rs 771 crore while those of Welspun India dropped 16 per cent from Rs 1,435 crore in Q1 FY 20 to Rs 1,202 crore in Q1 FY21.

Declining EBITDA margins

EBITDA margins of the top 10 players declined almost 88 per cent from 96.6 to 11.9 during the quarter. Arvind’ sIndias textile sales drop 51 in Q1 as COVID 19 mutes demand Wazir study EBITDA margins dropped from 9 per cent in Q1 FY20 to -6 per cent in Q1 FY 21; Vardhaman’s dropped from 15 per cent to -1 per cent while that of Welspun India from 24 per cent in Q1 FY 20 to the corresponding quarter of current fiscal.

Raw material and manpower costs of all top 10 players increased 60 per cent and 31 per cent respectively. Of these, Arvind’s percentage of raw material costs to total sales declined 46 per cent in FY 21. Similarly, the percentage of raw materials costs to sales for Vardhaman Textiles increased from 53 per cent to 55 per cent while Welspun India saw a drop from 48 to 39 per cent. Average raw material costs of all top 10 companies decreased 4.3 percentage points in the first quarter of the current financial year as compared to that in corresponding quarter last fiscal.

Rising employee costs

The average employee cost of all 10 players increased 6.6 percentage point during the quarter compared to same quarter last fiscal. Arvind’s employee cost jumped from 12 per cent to 25 per cent. For Vardhman Textiles’ cost increased from 9 to 16 per cent while for Welspun India saw an increase from 9 per cent to 12 per cent.

Other expenses increased by 7.2 percentage points during on an average for all 10 companies in the quarter. The Average Industrial Production (IIP) Index for apparels decreased by 51 per cent in Q1 FY21 as compared to Q1 FY20 while the IIP Index for textiles declined 75 per cent. The Wholesale Price Index (WPI) Index for apparels remained constant during the first quarter of FY21 while that of textiles declined by 3 per cent.

Exports register a drop

The economic slowdown induced by COVID-19 outbreak led to a 56 per cent decline in textile and apparel exports in Q1FY 21 compared to Q1 FY20. Filament witnessed the biggest decline of 67 per cent in textile exports while apparel exports dropped 65 per cent. US had the highest 31 per cent share in textile and apparel exports. However, its share declined 3 per cent from 34 per cent in Q1 FY20. It was followed by EU-28 and UAE with 26 per cent and 23 per cent shares respectively. Combined together these three regions had 56 per cent share in India’s textile and apparel exports during the quarter.