India Ratings and Research (IRDA) believes that Indian home textile players will increase their market share in terry towels and bed linens, led by supply chain diversification away from China.
It is pertinent to mention here that the home textiles players continued to witness a steady recovery over October-December 2020, led by consumers’ willingness to pay for health and wellness across the US and EU territories.
The companies producing bed sheets, towels and advanced textiles have announced capital expenditure to increase their operating capacity.
Further, depreciation of rupee against the dollar by 6 per cent year-on-year (Y-o-Y) during the 9 months of 2020-21 contributed positively for exporters, it stated.
The agency continues to expect a healthy and sustained demand improvement for players in their export markets, led by the restoration of retail store inventories, it added.
On the other hand, it has claimed that the apparel prices are likely to remain soft in the second half of 2020-21 even as the segment is in a recovery mode.
The apparel segment’s Wholesale Price Index recovered to pre-COVID-19 levels in November 2020, led by the festive and marriage season demand.
The research agency expects the apparel prices to remain benign in the second half of 2020-21, leading to inventory liquidation.
The demand for blended fabrics recovered in November 2020 and was 20 per cent higher from the same period of the previous year, all owing to festive and marriage season demand.
Cotton knitted fabrics’ production increased for the fifth month in a row in November 2020, led by a surge in demand from the opening of retail stores and malls.
Further, it stated that demand for cotton woven fabrics increased sequentially in November 2020 but it was 40 per cent lower Y-o-Y on the back of a lower demand for formals and school clothing.
It also added that the fabric companies would likely to remain weak for the second half of 2020-21, due to social distancing and the fear of a second wave of the pandemic and emergence of a new coronavirus strain.
