The latest textile index of 10 companies done by Wazir Advisors show sales and EBITDA recorded a tremendous growth during the nine months in fiscal 22. The 10 reviewed companies were: Welspun India, Vardhaman Textile, Arvind Ltd, Trident Group, KPR Mills, Indo Count India, RSWM, Filatex India., Nahar Spinning Mills and Indorama Indi.
Sales grow by 30%
The Wazir Textile Index shows overall sales of the 10 companies under review grew 30 per cent compared to 9M FY20. Consolidated sales grew 14 per cent to Rs 38,094crore as against Rs 29,195 crore in 9MFY20. EBITDA margins improved almost 75 per cent during the fiscal year 2022 compared to the EBITDA in 9M FY20. Average EBIDTA margins of these companies grew 5 per cent, 17 per cent and 20 per cent CAGR respectively from 2020-2022.
Raw material and other costs decline
In terms of expenses, the average raw material costs of these companies decreased 4.0 percentage points to form 60 per cent of overall sales during the period. Their average employee costs decreased 1.0 sales percentage points during the nine-month period compared to 9MFY20. Other expenses decreased by 1.0 percentage points during the period compared to 9MFY20.
Apparel outpaces textile growth
The consolidated earnings of these companies have seen significant recovery since FY21. The Index of Industrial Production Index (IIP) recovered to pre-COVID levels. While IIP for he apparel category increased by 78 per cent during 9MFY22 as compared to the corresponding period in FY, the average Wholesale Price Index (WPI) for apparels increased 3.5 per cent compared to textiles which went up 12 per cent each in 9M FY22 as compared to 9MFY20.
11% growth in textile and apparel exports
Textile and apparel exports of grew at 11 per cent CAGR during 9M FY22 since 9M FY20. Export of fibers recorded highest growth of 58 per cent followed by 36 per cent growth in yarn exports. In Q3 FY22, fiber exports grew at 50 per cent CAGR as export of cotton increased due to US ban on cotton purchases from China. India’s textile exports to the EU declined from 23 per cent to 14 cent whereas exports to Bangladesh increased to 11 per cent from 7 per cent seen during the same period last year.
Imports decline 3%
Overall textile and apparel imports by these ten companies declined 3 per cent during 9M FY22 as compared to 9M FY20. Import of filament yarn grew 24 per cent CAGR since 9M FY20. However, import of fiber and home textiles declined during the period as compared to 9M FY20.
China dominates T&A imports from India
China continues to be the largest importer of textiles and apparels from India with a share of 41 per cent in 9M FY22. However, the country’s import share declined 4.0 percentage points from the corresponding period of 9M FY21.
EU’s import of share of textiles and apparels from India also declined 6 per cent in 9MFY22 compared to 9M FY20 in 9M FY22. Imports were hit by multiple nationwide lockdowns and restricted movements. However, in recent times EU-27 countries have been increasing imports from countries like China, Bangladesh, Turkey, India and Pakistan.
