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Fibre2Fashion
18 hours ago
- Business
- Fibre2Fashion
Long-term prospects of India's textile industry seem strong: Report
The long-term prospects of India's textile industry seem strong as channel inventories seem to be normalising at the global retailer level, the United States may raise tariffs for China, labour costs are rising in Vietnam and Bangladesh is seeing political instability, according to a report by Systematix Research. Indian companies may pass on part of rise in costs to consumers, potentially leading to higher prices for textiles and apparel. This could dampen demand in key markets like the United States. Nevertheless, larger macroeconomic trends are beginning to tilt in India's favour, positioning it as a more appealing sourcing hub for global retailers, said the report. The Indian textile industry's long-term prospects seem strong with normalising global retail inventories, probable US tariff rise for China, rising labour costs in Vietnam and Bangladesh's political chaos, Systematix Research said. Indian textile-apparel prices may rise. Stable cotton prices, favourable forex rates and operational efficiency may bolster Indian firms' profitability in the long run. However, Indian textile firms have reported a lacklustre performance in the fourth quarter of fiscal 2024-25 (FY25). Revenue of such firms witnessed a modest 5-per cent growth year on year (YoY), while earnings before interest, taxes, depreciation and amortisation (EBITDA) declined by 3 per cent, and profit after tax only slightly increased by 3 per cent YoY, primarily due to ongoing tariff uncertainties and weak sales volumes. Spinning companies experienced a slight improvement in gross margins because of falling cotton prices and steady yarn prices, while garments benefitted from normalised retailer inventories, boosting sales volumes, the report noted. In contrast, India's home textiles segment continued to experience reduced demand, with significant volume declines when compared YoY and quarter on quarter. However, stable cotton prices and favourable foreign exchange rates, along with continued focus on operational efficiency, are expected to bolster profitability for Indian textile companies in the long run, it observed. Systematix Research expects the prevailing cotton-yarn spread of 0.70 per pound to sustain and the Cotton Corporation of India (CCI) to remain as the sole supplier of cotton, unless the government decides to waive off the import duties on cotton. Fibre2Fashion News Desk (DS)
India Gazette
5 days ago
- Business
- India Gazette
India's textile sector competitiveness may gain edge as Vietnam fights rising labour costs, Bangladesh grapples with political instability: Report
New Delhi [India], June 17 (ANI): India's textile sector may gain a competitive edge in the global market due to rising labour costs in Vietnam and ongoing political instability in Bangladesh, two of its key export rivals, according to a report by Systematix Research. The report, however, highlighted that the near-term outlook for the sector remains challenging. Tariff-related uncertainties may force exporters to absorb part of the additional costs, putting pressure on margins. Companies are also expected to pass on a significant portion of these costs to consumers, which could lead to higher textile and apparel prices and potentially reduce demand from key markets like the US. The report pointed out that global macroeconomic shifts are gradually working in India's favour. With Bangladesh facing political instability and Vietnam seeing a rise in labour costs, India is expected to become a more attractive sourcing destination for global retailers. It said 'India's textile industry seem strong, as channel inventories seem to be normalizing at the global retailer level, there is a likelihood of the US raising tariffs for China, labour costs are rising in Vietnam, and Bangladesh is seeing political instability'. Despite these long-term positives, Indian textile companies reported a muted performance in the fourth quarter of FY25. Amid tariff uncertainty, the revenue of the companies rose by 5 per cent year-on-year (YoY), EBITDA declined by 3 per cent, and profit after tax (PAT) grew by only 3 per cent YoY, mainly due to weak volumes and ongoing uncertainty around tariffs. 'Textile companies reported muted revenue/EBITDA/PAT performance of +5 per cent/-3 per cent/+3 per cent YoY, respectively, due to tepid volumes, amid tariff uncertainty,' the report stated. Spinning companies, however, saw a marginal improvement in gross margins, supported by a 10 per cent YoY and 2 per cent quarter-on-quarter (QoQ) drop in cotton prices, and stable yarn prices, which were down 3 per cent YoY and flat QoQ. Garments showed strong recovery, with normalizing retailer inventories pushing up sales volumes by 10 per cent YoY and 20 per cent QoQ. On the other hand, home textiles continued to witness weak demand, with volumes falling by 9 per cent YoY and 6 per cent QoQ. Nevertheless, stable cotton prices, favourable forex rates, and a continued focus on operational efficiency are likely to support profitability for Indian textile firms. (ANI)
India Gazette
03-06-2025
- Business
- India Gazette
Cement demand to grow 6-7.5% in FY26 amid recovery in infrastructure and housing: Report
New Delhi [India], June 3 (ANI): The Indian cement industry is likely to see a demand growth of 6 to 7.5 per cent in the current financial year (FY26), according to a report by Systematix Research. The report highlighted that with consolidation-led discipline taking hold and strong momentum in infrastructure and housing sectors, the industry is entering a more stable and profitable phase. It said, 'With consolidation-led discipline settling in and momentum building in infrastructure and housing, industry demand is expected to grow by 6-7.5 per cent in FY26'. The report noted that the sector exited FY25 on a stronger footing. The last quarter of the previous financial year saw a visible recovery in both demand and pricing after a slow first half. Increased government capital expenditure towards the end of FY25 helped revive construction activity in major markets. The report said 'Cement volume for companies under our coverage grew by 11 per cent after a slow H1 due to an upswing in commercial activity and a ramp-up in government execution. In FY25, the cement industry ended with a capacity of about 655 MTPA (+4.8 per cent YoY). This also supported price hikes, which were partially absorbed in regions like the East and North. In May 2025, the report added that the cement companies attempted price hikes across different regions, ranging from Rs 5 to Rs 10 per bag. However, due to weak demand in several areas, the absorption of these hikes remained limited. Regional factors such as early monsoons and heat waves played a key role in affecting demand. In the East, demand dropped sharply due to early monsoons, but prices still rose by Rs 46 per bag. The South faced flat demand conditions as heat waves impacted construction activities. As a result, price hikes in the region are expected to be postponed to the second quarter of FY26, since the fourth quarter remained muted. Meanwhile, the report mentioned that central India recorded a modest hike of Rs 2 per bag, and Northern markets saw better traction, with prices increasing by Rs 20-30 per bag. Despite these regional challenges, the average cement price across India rose 1.6 per cent month-on-month in May 2025, reaching Rs 367 per bag. The industry also benefited from a favourable cost environment and improving capacity utilisation, further supporting a positive outlook for FY26. (ANI)
Mint
03-06-2025
- Business
- Mint
Cement demand to grow 6-7.5% in FY26 amid recovery in infrastructure and housing: Report
New Delhi [India], June 3 (ANI): The Indian cement industry is likely to see a demand growth of 6 to 7.5 per cent in the current financial year (FY26), according to a report by Systematix Research. The report highlighted that with consolidation-led discipline taking hold and strong momentum in infrastructure and housing sectors, the industry is entering a more stable and profitable phase. It said, "With consolidation-led discipline settling in and momentum building in infrastructure and housing, industry demand is expected to grow by 6-7.5 per cent in FY26". The report noted that the sector exited FY25 on a stronger footing. The last quarter of the previous financial year saw a visible recovery in both demand and pricing after a slow first half. Increased government capital expenditure towards the end of FY25 helped revive construction activity in major markets. The report said "Cement volume for companies under our coverage grew by 11 per cent after a slow H1 due to an upswing in commercial activity and a ramp-up in government execution. In FY25, the cement industry ended with a capacity of about 655 MTPA ( 4.8 per cent YoY). This also supported price hikes, which were partially absorbed in regions like the East and North. In May 2025, the report added that the cement companies attempted price hikes across different regions, ranging from ₹ 5 to ₹ 10 per bag. However, due to weak demand in several areas, the absorption of these hikes remained limited. Regional factors such as early monsoons and heat waves played a key role in affecting demand. In the East, demand dropped sharply due to early monsoons, but prices still rose by ₹ 46 per bag. The South faced flat demand conditions as heat waves impacted construction activities. As a result, price hikes in the region are expected to be postponed to the second quarter of FY26, since the fourth quarter remained muted. Meanwhile, the report mentioned that central India recorded a modest hike of ₹ 2 per bag, and Northern markets saw better traction, with prices increasing by ₹ 20-30 per bag. Despite these regional challenges, the average cement price across India rose 1.6 per cent month-on-month in May 2025, reaching ₹ 367 per bag. The industry also benefited from a favourable cost environment and improving capacity utilisation, further supporting a positive outlook for FY26. (ANI)
India Gazette
02-06-2025
- Business
- India Gazette
India's GDP growth in Q4FY25 looked strong but hides weakness: Report
New Delhi [India], June 2 (ANI): India's GDP growth for the January-March quarter of 2024-25 looked strong on the surface, but it hides several weaknesses, highlighted a report by Systematix Research. The report said the growth is still mainly driven by government spending, especially on construction, while the manufacturing sector remains weak. It said 'the upside surprise in Indian 4QFY25 GDP growth makes a robust headline, but it masks underlying weaknesses. It continues to be dependent on public spending-led construction'. The report mentioned that there are many signs that the headline GDP growth may not reflect the real state of the economy. For example, money supply grew much slower than nominal GDP, which raises questions about the accuracy of the growth numbers. Also, personal consumption spending grew much faster than the sales volume of consumer companies, showing a mismatch. While government capital spending rose sharply, private investment likely fell, showing that public spending is not creating the expected boost to the economy. Demand in the economy also remained low due to weak household income, slower retail lending, and lower government subsidies. Net indirect taxes rose to the highest level since June 2018, which further added to pressure on demand. The report said, 'Despite a reduced external deficit, contraction in total trade indicates slowing global and domestic demand, highlighting a disconnect between reported GDP figures and the on-ground economic situation'. Looking ahead, hopes are resting on rural consumption picking up, supported by a strong agriculture sector. But with private investment still weak and global conditions uncertain, recovery may remain slow. The Reserve Bank of India is expected to ease policies to support demand, especially if inflation stays low. However, the report notes that low inflation is mostly due to weak demand and incomes. The report added, 'This bidirectional causality can be broken only with a turnaround in productive employment, which has been lacking in the wake of rising ruralisation and private capex'. The report also warned of global risks, including panic buying in global trade ahead of possible new US tariffs under Trump, which could lead to stagflation in the US. This will not help India, as its trade-to-GDP ratio is already shrinking. (ANI)
