With regard to the Indian economy, overall Q4 results of various public limited companies (apart from textiles and apparels) this year were on the positive side with 199 Bombay Stock Exchange (BSE) companies that more than doubled their March quarter profit Y-o-Y while few reported more than 100 per cent growth in their consolidated profit after tax (PAT). Though we could not find any such company specific to the textile industry, Indian textile and apparel industry seems to be on a slow growth path, at least Q4 results of various companies of the industry confirm this perception.
Apparel Resources explored the Q4 results of 10 companies covering different hubs, including high-end domestic brands, focused product category players and dedicated apparel exporters. The range also encompassed top level to mid-size and emerging to established companies. Nine of them have shown growth in terms of revenue as well as profit. On the basis of these companies’ performance, it can be said that the domestic market, specially the branded segment, is performing well.
Not only the performance of the domestic segment, but also that of top apparel exporters of India remained good during this particular quarter. The story is similar for the home furnishing giants too. With regard to domestic market, double digit growth was registered and that too despite high inflation and reduced purchasing power. The experts are of the view that demand from rural area has improved due to lucrative announcements, especially for farmers, by the Government, which has increased purchasing power. Normal monsoons is another reason for this hope. Good thing is that the coming quarter is also expected to remain positive.
Some interesting insights…
Due to recent changes in Arvind’s structure, the current quarter and year-end numbers are not comparable to the corresponding periods of previous years. Arvind Fashions Ltd. would remain focused on driving improved profitability, along with increasing discipline around cash generation and consolidation of its unlimited business during FY ’20. The company also plans to focus on continuous evaluation of its brand portfolio to optimise returns and profitability in the future. Power brands and other selected lines will continue to grow on the back of increased investments in both marketing and channel expansion in Tier-2 and Tier-3 cities.
Welspun India, in a regulatory filing, claimed, “To avoid the burden, cost and uncertainty of continued litigation in the United States surrounding the provenance of its premium cotton home textile products, the company and its subsidiaries have entered into a settlement agreement subsequent to year-end… The settlement agreement provides monetary payments to settlement class members to not exceed an aggregate US $ 36 million (about Rs. 250 crore).”
A bird’s eye view of results…
|Company||Revenue March 2019||Revenue March 2018||Growth %|
|Arvind Fashions Ltd.||218.42||276.47||(21)|
|Bannari Amman Spinning||264.37||233.38||13.27|
|Bhandari Hosiery Exports+||95.54||69.38||37.70|
|Dollar Industries Ltd.||298.50||272.98||9.34|
|Lux Industries Ltd.||394.64||356.10||10.82|
(All figures in cr.)
+ The company noticed profit but it decreased comparatively to Q4 of last fiscal.
*During Q4, the company has had a loss of Rs. 78.43 crore due to exceptional expense of Rs. 224.01 crore related to settlement of litigation in the US with regard to labelling and marketing of Egyptian cotton products. It had net profit of Rs. 89.86 crore compared to the corresponding period of the previous fiscal.