Indian textile sector sees a turnaround

Indian textile sector sees a turnaround

Shares of textile companies bucked the weak market trend and managed to rally as improving exports of cotton and made-up apparel, along with attractive valuation and earnings growth visibility, made analysts bullish.

Shares of textile companies bucked the weak market trend and managed to rally as improving exports of cotton and made-up apparel, along with attractive valuation and earnings growth visibility, made analysts bullish.

Shares of Super Fine Knitters, Super Spinning, and Filatex India, JCT, Surat Textile, Swasti Vinayaka, KPR Mill, Sumeet Industries, Bhandari Hosiery, Minaxi Textiles, Bombay Rayon, Gokaldas Exports and Vardhman Textiles also ended in the green.

In comparison, the S&P BSE Sensex fell over 1 per cent, or 621 points, and closed the session below the 60,000-mark.

The Covid-19 pandemic has altered the global textile and apparel (T&A) supply chain with several brands preferring more than one sourcing destination. Further, the US-China trade war and imposition of additional duties on Chinese T&A imports have forced US-based importers to scout other destinations such as India.

Countries such as China, Bangladesh, Vietnam, and Cambodia have become reliant on India for their cotton requirements after the ban, and Indian cotton exports have skyrocketed in the past eight months as a result.

Separately, India has witnessed increased exports in the made-ups segment. Moreover, the government’s stance on free trade agreements (FTAs) is a welcome policy change for the T&A players.

The stocks in the sector are also ripe for a re-rating as robust export opportunities give strong and sustainable earnings visibility, say analysts at ICICI Securities.

From investment view point, analysts suggest playing the theme by going long on Vardhman Textiles, Trident, Sutlej Textiles, Alok Industries, KPR Mill, Nitin Spinners, Welspun India, Indo Count, Himatsingka Seide, Gokaldas Exports.

Source: Business Standard

Also Read:

https://indiantextilejournal.com/arise-iip-joins-international-textile-manufacturers-federation/https://indiantextilejournal.com/strong-global-demand-for-indian-apparel-to-raise-exports/

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