New Delhi
As per Ind-Ra,
when it comes to home textiles, it is expected that stable raw material prices
and a sustained demand can bring about growth in exporters’ top line and bottom
line. As per the report generated, home textile players saw a good and healthy
rise in the top line in the year 2021 but the operating margins were quite
affected in the fourth quarter of the same year. This effect was due to factors
like increasing import duty on cotton, uncertainty over remission of duties,
and taxes on the incentives generated on export products.
Due to lockdowns
in various cities and industries, prices of cotton were corrected in the month of
April. This was on the account of lower demand from mills that were operating
with lower capacities due to the current pandemic scenario.
Also, according
to the report, the United States Department of Agriculture Foreign Agricultural
Service (USDA-FAS) is expecting that the domestic crop will increase by 2% year
on year in the new season that will commence in October 2021. Having said this,
the consumption is expected to increase by 6 to 8% year on year, which will
lead to a reduction in the overall ending stock.
Finally, as per
the report, there is a marginal increase in the production that is supported by
a good monsoon season, which has further led to an increase in the yield by 5%
to 497 kg per hectare. This marginal increase is despite the expected lower
area under cultivation for the coming season. In conclusion, it can be said
that if the prices of raw materials stay stable and the demand is sustained,
the home textile industry will see a boost.
Source – The Times of India
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