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India’s apparel export improve over domestic local sales

Apparel exporters gained over others in during Q2 of this financial year. KPR Mill, Kitex Garments and Gokaldas Exports, where exports are the mainstay of their business, have seen revenue/profit improving or steady over both the June quarter (Q1), which was just before GST, as well as Q2. Raymond recorded profits of Rs 62 crore when compared to a net loss of Rs 7 crore in the pre-GST quarter of April-June. On the other hand, Page Industries and Arvind, whose garment business is equally focused on the domestic market, felt the impact of GST rollout of 28 per cent on branded apparel, with their Q2 bottom line declining over Q1 this year.

Analysts say there was slightly reduced domestic demand in the month post GST, despite a marginal rise in export. Wazir Advisors says sales for exporters had increased with a rise in capacities and utilisation of specific companies (KPR, Kitex and Gokaldas). KPR Mill saw its garment production increase year-on-year from 30.48 million units in Q2 last year to 39.41 million this year. As Prashant Agarwal, Joint MD, Wazir Advisors points out India’s apparel export to the US grew 6 per cent in Q2 from a year ago. However, for overall top textile players, consolidated sales fell by five per cent and EBITDA margins fell by an average of four per cent. Ebitda margin remained the same or fell for most companies. A rise in net profit of some, such as Raymond, Kitex and Gokaldas Exports, was largely due to higher other income. While KPR Mill posted growth in net profit from Rs 62.8 crore in Q2 last year to Rs 63.2 crore this time, Kitex Garments rose from Rs 13.1 crore to Rs 24.1 crore.