SP Apparels, Gokaldas, Indo Count, KPR Mill surge up to 20%; here's why

Textiles, garments & apparels stock price movement today: Shares of textile companies including garments and apparel makers such as Gokaldas Exports, Indo Count Industries, S P Apparels and KPR Mill have rallied by up to 20 per cent on the BSE in Wednesday’s intra-day trade after India and the United Kingdom (UK) on Tuesday announced the conclusion of talks for a free trade agreement (FTA) that will boost strategic and economic ties between the countries.

 

Shares of S P Apparels zoomed 20 per cent to ₹876.10. Gokaldas Exports and Indo Count Industries have surged 9 per cent to ₹928 and ₹313, respectively. KPR Mill (₹1,101.95) and Welspun Living (₹130.50) soared 8 per cent in intra-day trade.

 

Vardhman Textiles, Sportking India, Sangam India, Himatsingka Seide, Siyaram Silk Mills, Pearl Global Industries, Kitex Garments and Nitin Spinners were up in the range of 5 per cent to 8 per cent. In comparison, the BSE Sensex was up 0.15 per cent at 09:28 am.

 

Benefit of India-UK free trade deal

 

The trade deal, once implemented, may make import of whisky, gin, automobiles, medical devices, electrical machinery, cosmetics, soft drinks, chocolates, and lamb cheaper for India. It will also lead to a significant increase in the export competitiveness of Indian shipments to the UK for sectors like textiles, toys, leather, marine products, footwear, and gems & jewellery. Sensitive items like dairy products, apples, cheese, etc., have been excluded from any duty concession by India to protect its farmers.

 

The potential implementation of Free Trade Agreements (FTAs) with key markets like the UK and EU presents exciting opportunities for increased textile trade. Additionally, government initiatives such as the Production Linked Incentive (PLI) scheme for the Man-Made Fibre (MMF) and technical textile ecosystem are expected to boost investments in the sector, Gokaldas Exports said in its FY24 annual report.

 

Brokerage view – Elara Capital

 

Global brands have been increasingly shifting their supply chains away from China and Bangladesh and this trend is likely to continue and benefit integrated Indian textile companies. Further, garment and home textiles exporters are expected to perform well as India continues to gain market share.

 

Brokerage view – Mirae Asset Sharekhan

 

In the long term, growth prospects of the Indian textiles industry are strong, aided by augmentation of capacity with value-added products, China +1 factor, the government entering into a trade agreement in various countries, incremental benefits from the PLI scheme, and market share gains in export markets.

 

Brokerage view – JM Financial Institutional Securities

 

The long-term prospects for the industry remain intact with a continuing shift of global sourcing away from China, supplier consolidation towards efficient/ well-capitalised players and supply-side instabilities in several countries. Further, government incentives and support from state governments for low-cost locations, PLI and FTAs with key markets should drive increased textiles trade.