Indian textile companies may have a healthy growth in turnover in fiscal year 2023. So says ICRA.

Macro headwinds had impacted the performance of textile players across segments in the second quarter of 2022-2023. Revenue and margins dipped for Indian spinners while for the apparel segment revenue and margins remained flat, with recessionary conditions in key markets. Inventory levels fell for most textile players in the second quarter after cotton stocks from the previous harvest season started to reduce and cotton prices saw a sharp volatility, resulting in players becoming cautious on buying.

Revenue of spinners declined by four per cent on a year on year basis while margins were moderated by 950 bps.With pressure on the profitability of companies across different scales, the interest cover also moderated during this period. The impact was steeper for smaller players since large scale companies benefited from cost savings on bulk purchases of raw materials. For the first half of the fiscal year, inventory levels for most players have come down with cotton stocks from the previous harvest season getting extinguished and a sharp volatility in cotton prices affecting the buying power of spinners.

Unlike Indian cotton spinners, revenue of apparel exporters improved by 4.5 per cent year on year.