Jefferies On Textile Stocks: India's textile industry could be entering a multi-year growth cycle as China+1 sourcing, improving tariff competitiveness and a series of trade agreements reshape global supply chains, analysts said.
Against this backdrop, Jefferies analysts Dhiraj Mistry, Vivek Maheshwari and Manan Lahoti have initiated coverage on Welspun Living and Raymond Lifestyle, assigning a ‘Buy' rating to both stocks with target prices of Rs 260 and Rs 900, respectively.
The brokerage sees 25% upside in Welspun Living from its CMP of Rs 208 and 29% upside in Raymond Lifestyle from Rs 697, with the two companies offering different ways to play India's evolving textile opportunity.
Jefferies Initiates On Welspun Living With Rs 260 Target
Jefferies has initiated coverage on Welspun Living with a ‘Buy' rating and a Rs 260 price target, valuing the company at 14x September 2028 estimated EV/EBITDA.
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The brokerage views Welspun as a global home-textile leader and a compelling play on the home-textile export opportunity. Its integrated business model, scale and strong customer relationships are seen as key competitive advantages.
Jefferies expects Welspun Living to deliver a 14% revenue CAGR over FY26-29E, while margin recovery is expected to drive 38% EBITDA CAGR and 71% PAT CAGR during the same period.
The brokerage also expects ROCE to expand by around 13 percentage points to approximately 19%.
Raymond Lifestyle: Jefferies Sees Value In A Turnaround
Jefferies has also initiated coverage on Raymond Lifestyle with a ‘Buy' rating and a Rs 900 price target, implying 29% upside from its CMP of Rs 697.
The brokerage describes Raymond Lifestyle as a value buy with an attractive risk-reward profile, supported by its leadership in branded textiles, strong distribution network and fast-growing garmenting business.
Following the demerger, Raymond has emerged as a focused lifestyle company. While recent performance has been affected by weak demand and execution challenges, Jefferies expects a recovery following management changes.
The brokerage sees premiumisation, a turnaround in the apparel business and export-led garmenting growth as key drivers, with EPS expected to compound at 23% over FY26-29E.
At around 6x one-year forward EV/EBITDA, Jefferies believes the stock's valuation remains attractive.
Why Jefferies Is Bullish On India's Textile Opportunity
The global textile and apparel market is worth more than US$900 billion, with apparel accounting for nearly 60% of trade.
Jefferies believes India is well positioned to capture a larger share as global sourcing moves beyond China. The country's integrated fibre-to-fashion ecosystem, around $37 billion export base, raw material availability, skilled workforce and policy support provide a foundation for export growth.
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The brokerage expects supply-chain realignment, supplier consolidation and improving trade competitiveness to create a multi-year runway for Indian textile exporters.
UK, EU FTAs Could Strengthen India's Export Edge
Trade agreements could provide another major catalyst.
The UK FTA, effective July 2026, and a potential EU FTA from 2027 could give Indian textile and apparel exporters preferential access to a combined textile and apparel import market of around US$220 billion.
According to Jefferies, the UK FTA cuts tariffs on Indian textile products from 4-12% to near-zero. A potential EU agreement could similarly remove duties, materially improving India's export competitiveness.
The brokerage believes these developments, combined with China+1 sourcing and the gradual loss of Bangladesh's LDC-linked benefits, could help Indian exporters gain market share.
Home Textiles Offer India An Early Advantage
Jefferies sees home textiles as India's strongest export category, helped by high entry barriers, lower fashion risk and deep relationships with retailers.
India already has around 45-60% share in key US home-textile categories such as bed linen and towels. However, its share in the UK and EU remains much lower at around 5-25%, leaving significant room for expansion.
This is where Jefferies sees Welspun Living particularly well positioned, given its scale, backward integration and customer relationships.
Apparel Could Be The Bigger Long-Term Opportunity
While home textiles currently provide India with an established export advantage, Jefferies sees apparel as an even larger long-term opportunity.
Lower tariff barriers, China+1 sourcing and rising compliance requirements could support a multi-year expansion in India's apparel exports.
For Raymond Lifestyle, this creates an opportunity beyond its established branded-textiles franchise, with the brokerage specifically pointing to a recovery in apparel and growth in export-led garmenting.
What Should Investors Watch?
The key question for investors is whether India's improving trade competitiveness can translate into sustained market-share gains globally.
For Welspun Living, Jefferies' thesis centres on its global home-textile leadership, export opportunity, diversified growth drivers and margin recovery.
For Raymond Lifestyle, the focus is on whether management changes, premiumisation, an apparel turnaround and export-led garmenting can unlock the company's valuation potential.
With Jefferies initiating both stocks with ‘Buy' ratings, the brokerage is effectively positioning Welspun as a play on India's home-textile export opportunity, while Raymond offers a value and turnaround opportunity within the broader textile and lifestyle space.
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