Textile, apparel stocks in focus; Page Ind, TCNS Clothing surge up to 14%

The demand from the home textile industry is expected to remain supportive in the near-to-medium term

Shares of textiles, readymade garments and apparel companies were trading actively on Wednesday on expectation of higher demand going forward.

Individually, Page Industries, TCNS Clothing Company, Himatsingka Seide, Gokaldas Exports, Dollar Industries, Bombay Dyeing and Manufacturing, Arvind Fashions, Siyaram Silk Mills, and Monte Carlo Fashions from these segments were up between 5 per cent and 14 per cent on the BSE. In comparison, the S&P BSE Sensex was up 0.78 per cent at 46,623 points at 01:49 pm.

According to experts, demand from the home textile industry is expected to remain supportive in the near-to-medium term. The home textile industry, they say, witnessed a strong demand revival during July-September quarter (Q2FY21) on high demand from big retailers (selling essentials), who saw their inventory pipeline running dry due to demand recovery, lower channel inventory, and precautionary buying by big retailers during the Covid-19 pandemic.

"Outlook for the Home Textile business continues to remain positive, with Indian textile players best placed to utilize this opportunity. The same for Yarn and Garments players looks positive, which is due to higher demand for Apparels from the US and Europe and beginning of the festive season," said a textile sector report by Motilal Oswal Financial Services.

Meanwhile rating agency CRISIL says that the higher in-home consumption due to increased stay-at-home period and a sharper focus on health and hygiene amid the pandemic are helping Indian home textile exporters weave their way out of the downturn faster than other textiles segments.

The revenue de-growth for home textile exporters will be limited to 10-12 per cent this fiscal compared with 30-35 per cent for the overall textile sector, indicates a CRISIL analysis of 50 companies that account for over 60 per cent of India's home textile exports.

The Rs 55,000-crore Indian home textile sector, comprising products such as terry towels, bed sheets and spreads, pillow cases, curtains, and rugs and carpets, derives as much as 60-70 per cent of its revenue from exports. The United States and the European Union account for over 80 per cent of these exports, with big-box retailers of essentials and departmental stores among the major customers, it said.