Source: fibre2fashion.com

January 7, 2021

(Fibre2Fashion News Desk (RKS): The COVID-19 pandemic had its adverse effect on the sales of the Indian textiles and apparel industry, with overall sales dropping by 36 per cent in H1 FY21 compared to that in H1 FY20. In Q2 FY21, however, there have been signs of a remarkable recovery, with the average EBIDTA percentage recovering by 7.4 percentage points from Q1 FY21 to Q2 FY21.

The overall EBIDTA showed a decline of 58 per cent in H1 FY21 as compared to H1 FY20. Raw material (RM) cost and manpower cost also decreased by 36 per cent and 23 per cent, respectively during the same period, according to the latest edition of the Wazir Textile Index (WTI), which encompasses the highlights of the cumulative financial performance of the top Indian textile companies with respect to the market performance of the Indian textiles sector in H1 FY21.

The consolidated sales of the selected top 10 companies were ₹12,934 crore in H1 FY21 as compared to ₹20,235 crore in H1 FY20 and showed a decline of 36 per cent as compared to the previous year, according to the WTI. As compared to H1 FY20, the average EBITDA margin has also declined by 4.5 percentage points in H1 FY21 for the selected top companies. Average RM cost decreased by 0.3 percentage points, while the average employee cost increased by 2.3 percentage points in H1 FY21 as compared to the same period during the previous financial year.

The textiles & apparel (T&A) exports in H1 FY21 stood at $11.9 billion, showing a dip of 29 per cent from H1 FY20. The exports of filament and apparel witnessed the highest dip of 49 per cent and 39 per cent, respectively. In Q2 FY21, exports of fibre have shown a significant recovery of 78 per cent y-o-y due to the increase in cotton exports amid the US ban on the purchase of cotton products from China. On the home textiles front, exports witnessed a steady recovery in Q2, led by high hygiene and wellness consumption across the US and EU territories.

The Indian T&A industry showed a significant recovery in overall sales and EBIDTA levels in Q2 FY21 as compared to Q1 FY21. The consolidated sales rebounded by 97 per cent from Q1 FY21 to Q2 FY21 and the average EBIDTA percentage recovered by 7.4 percentage points from Q1 FY21 to Q2 FY21. The performance of exports also showed recovery with only 1 per cent decline in Q2 FY21 as compared to 56 per cent decline in Q1 FY21. With these results and the beginning of the post-COVID world, the T&A industry is anticipated to show positive results in the next quarter.

(Source: fibre2fashion.com)