Revenues of RMG manufacturers in India are set to grow on account of supply chain disruptions in markets such as Sri Lanka and harsh pandemic-induced lockdowns in China. As per a CRISIL report, RMG revenues could grow 16-18 per cent this fiscal. Manufacturers may also witness higher apparel sales with rise in domestic demand and discretionary expenses.
Domestic RMG demand is expected to grow 20 per cent, says Anuj Sethi, Senior Director, CRISIL Ratings. Meanwhile, export demand will grow around 12-15 per cent, despite the higher base of last fiscal, as overseas players continue to diversify their supplier base. Following Sri Lanka’s crisis, Indian apparel exporters have been receiving orders from the UK, European Union, and even Latin American countries. This will boost operating margins of RMG makers by 75-100 basis points year-on-year to 7.5 per cent-8.0 per cent this fiscal, adds Sethi.
CRISIL analyzed data from 140 readymade garment makers with aggregate revenues of Rs 20,000 crore. The ratings firm, however, said, a rise in raw material prices such as cotton may hike apparel prices.
