Indian Textiles - Volume Growth Trajectory Intact, Realisation To Remain Stable: Systematix

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Research Report.Textile companies reported healthy YoY improvement in operating profit in Q4 FY24, led by higher volumes and benign raw material prices. Topline growth stayed healthy, as volume growth offset diminishing realisations. However, soft cotton prices (down 3% YoY and up 5% QoQ) aided the gross margin expansion of companies under our coverage, which though was sequentially lower. Cotton prices at Rs 59,000-62,000/candy render the Indian industry competitive in the global arena in the prevailing scenario. Companies expect normalizing global demand coupled with muted raw material costs to improve volume growth in the medium term. Garment sales volumes improved YoY in Q4 FY24 on higher inventory liquidation as global retailers witnessed demand recovery. Similarly, home textile companies too continued to see healthy volumes in Q4 FY24. We expect demand momentum to sustain in FY25 and volume growth to gradually outpace inventory on easing inflation, normalised channel inventory, improving supply chain trends and expected cuts in interest rates. Aggregate revenue of textile companies under our coverage increased by 8% YoY and 12% QoQ, lower than our estimate. The industry witnessed 150bps YoY and 70bps QoQ margin expansion, with aggregate Ebitda margin at 14%, driven by benign raw material costs and change in product mix. Aggregate Ebitda increased 21% YoY and 18% QoQ, while adjusted profit after tax increased 19% YoY, largely contributed by 24% YoY growth in Vardhman Textiles’ PAT. Improving volume trends and stable realizations have led us to raise our earnings estimates for Vardhaman Textile and KPR Mill Ltd. We have trimmed our earning per share for Welspun Living to adjust for the flat YoY Ebitda margin guidance for FY25..Click on the attachment to read the full report:.Life Insurance - ICICI Prudential Life Seeing Sustained Momentum In May; Group Volume Tepid: Nirmal Bang.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Indian Textiles - Volume Growth Trajectory Intact, Realisation To Remain Stable: Systematix

Stable cotton prices make the Indian textile industry competitive

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