Textile - Export data-a mixed bag; higher raw material prices impact 2Q margins: JM Financial

JM Financial's sector report on Textile

 
In Oct’17, India’s market share in home textile exports to the US (sum of all products) declined 1ppt YoY. YTD market share in USD terms increased 2ppt YoY to 50% for cotton sheets, driven by volume growth of 4%, while YTD market share for towels remained flat at 40%. The cotton price correction to INR 105/kg currently (from c.INR 120/kg over the past eight months) is a positive for textile players, while INR appreciation (5.3% YTD) remains an overhang. Under the GST regime, duty drawback on cotton made-ups and cotton yarn has been revised from 7.3%/2.5% (without input credit) to 2%/1.2% (with input credit), respectively. The Merchandise Export from India Scheme (MEIS) rate has been increased from 2% to 4%. Volume growth for both terry towels and bed linen, along with India’s rising market share in the global home textile space, is a welcome relief for the segment.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More