Analysts predict Q3FY24 turnaround for textile firms

Trade volumes are predicted to further improve in the second half of FY24 as global retailers begin placing orders for their Summer/Spring 2024 collections.

Analysts have indicated that the textile sector is believed to be weaving a new narrative.

It was reported that textile companies had faced a challenging year in FY23 due to low demand, excessive inventory held by retailers, limited supplies, and increasing cotton prices. It was mentioned by them that they are hopeful that the worst is behind them and anticipate a revival in demand in the near future.

According to textile players, there is an expectation for demand to recover by the third quarter of FY24 as global retailers reduce their inventories. Some market participants pointed out that trade volumes are predicted to further improve in the second half of FY24 as global retailers begin placing orders for their Summer/Spring 2024 collections.

The reduced inventory on the shelves of global retailers, along with the anticipated reversal of the inventory to sales ratio over time, is expected to contribute to a more positive demand outlook for the second half of FY24.

Additionally, the sector is expected to benefit from various factors, including geopolitical uncertainties faced by competitor countries. Observers state that these factors will bring vibrancy to the sector, leading to consistent earnings growth and improved cash flows for textile players.

News source: Money Control