The fall in cotton prices has been a trigger
Textile companies are expected to see happier days ahead and reflecting this sentiment, their share prices have begun to shine, owing to a fall in cotton prices coupled with strong export demand.
Alok Industries’ stock has moved up 11 per cent and those of Arvind Mills by eight per cent since April 1. The biggest gainer is Tuni Textiles Mills, up 62 per cent.
| BETTER RETURNS | |||
| BSE price in Rs | 1-Apr-11 | 20-Apr-11 | %chg |
| Tuni Textile Mills | 28.46 | 48.00 | 68.66 |
| Jaybharat Textiles | 110.00 | 183.70 | 67.00 |
| Shri Lakshmi Cotsyn | 79.65 | 107.80 | 35.34 |
| Winsome Yarns | 2.65 | 3.50 | 32.08 |
| Welspun India | 43.30 | 55.40 | 27.94 |
| Lovable Lingerie | 246.05 | 305.20 | 24.04 |
| S Kumars Nationwide | 57.25 | 65.34 | 14.13 |
| Alok Ind | 22.70 | 25.75 | 13.44 |
| Delta Corp | 85.80 | 96.45 | 12.41 |
| Arvind Ltd | 67.84 | 73.55 | 8.42 |
| SRF | 322.35 | 347.50 | 7.80 |
| Vardhman Textiles | 271.80 | 290.50 | 6.88 |
| Bombay Rayon Fashions | 271.55 | 286.80 | 5.62 |
| JBF Ind | 165.50 | 174.05 | 5.17 |
| Data compiled by BS Research Bureau | |||
The fall in cotton prices has been a trigger, as is the ability to pass on the burden of rising input cost to consumers. Cotton prices were Rs 63,000 a candy (356 kg) on the spot markets a fortnight before and are now Rs 55,500 a candy.
CARE, the country’s second largest rating agency, has upgraded the rating of 32 textile companies (it has downgraded four). They are expected to grow well in the coming months on the back of strong export demand, said an official.
Also, in the past month, Rs.2,000 crore has been allotted under the Technology Upgradation Fund Scheme. The scheme had offered a 10 per cent capital subsidy for processing and garment machines; weaving looms are also covered now, said an industry official.
“Another reason for the Indian textile industry to do better is because China’s domestic demand has increased and their imports of textiles have gone up,” said, Sunil Khandelwal, chief financial officer of Alok Industries.
An official said yarn spinning mills are doing better then other players in the industry.
