Led by stable spinning margins in the cotton yarn segment, range-bound cotton prices and good domestic and export demand for downstream fabrics and apparels, FY16 seems overall stable outlook for the cotton textile sector, claims India Ratings and Research (Ind-Ra). Although, due to a slowdown in demand for yarn particularly from China, leading to softer yarn realisations and lower capacity utilization, the outlook for cotton yarn exporters is negative. It has revised the outlook for the synthetic textile sector to negative for FY16 from negative to stable. Unfavourable cotton-polyester staple fibre spreads have hurt substitution demand for synthetic fibres and synthetic yarn.
Lower export competitiveness of Indian synthetic yarn also contributes to the subdued outlook as import and central excise duty continue on man-made fibres. Ind-Ra has maintained a stable outlook on its rated textile companies as they are likely to show ratings stability on growing domestic demand, competitiveness in apparel exports and an overall improvement in credit profile. Trends for FY16 in the textile sector indicate more cautious inventory management, risk aversion towards holding higher raw material stocks and focus on efficiencies in cash conversion cycle.
Bharat Tex Special Report 2026 
