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Indian apparel companies to fare better than textile firms
22 Nov '11
2 min read
Apparel companies in India, engaged in the business of manufacturing garments and branding, are likely to perform better this fiscal compared to firms involved in the production of pure textile items like yarns and fabrics.
For example, S Kumars Nationwide Limited, which has brands like Belmonte, Reid & Taylor, etc., has posted a growth of 55 percent year-on-year during second quarter of current fiscal. On the other hand, Vardhman Textiles, which is a pure textile manufacturing company, has reported a year-on-year decline of 69 percent in its net profit during July-September period.
In fact, various marketing strategies like giving discounts and extending the period of end of season sale have worked in the favour of apparel companies.
For textile firms, however, the expectation of a further fall in prices of cotton is making the business atmosphere difficult. Cotton prices are expected to fall due to the projected bumper harvest of 35.6 million bales this year, as against the production of 32.5 million bales last season.
Moreover, apparel companies have not yet exhausted their existing stock of raw material bought at higher prices. This is also affecting the performance of pure textile firms.
Hence, apparel companies are likely to continue to perform better than textile companies in the coming months.
For example, S Kumars Nationwide Limited, which has brands like Belmonte, Reid & Taylor, etc., has posted a growth of 55 percent year-on-year during second quarter of current fiscal. On the other hand, Vardhman Textiles, which is a pure textile manufacturing company, has reported a year-on-year decline of 69 percent in its net profit during July-September period.
In fact, various marketing strategies like giving discounts and extending the period of end of season sale have worked in the favour of apparel companies.
For textile firms, however, the expectation of a further fall in prices of cotton is making the business atmosphere difficult. Cotton prices are expected to fall due to the projected bumper harvest of 35.6 million bales this year, as against the production of 32.5 million bales last season.
Moreover, apparel companies have not yet exhausted their existing stock of raw material bought at higher prices. This is also affecting the performance of pure textile firms.
Hence, apparel companies are likely to continue to perform better than textile companies in the coming months.
Fibre2fashion News Desk - India
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