Home / Knowledge / News / Apparel/Garments / Financial metrics of Indian garment manufacturers to rise
Financial metrics of Indian garment manufacturers to rise
08
Nov '13
India Ratings & Research (Ind-Ra) expects the financial metrics of garment manufacturers to improve during FY14 (year end March), which could be one of the key drivers for a positive rating action.

“A combination of improving textile and apparel demand from large markets, benefits accruing from a depreciating rupee and structural changes in competing markets like China and Bangladesh have resulted in the improved performance of and stronger order book visibility for Indian exporters. The trends are seen to sustain in the short-to-medium term”, says Tanu Sharma, Associate Director, Corporates, India Ratings & Research.

Most garment exporters are therefore running on full capacity and also outsourcing manufacturing on a job work basis as order books are growing ahead of the peak festive season (December). During April-September 2013, garment exports grew 13% yoy in US dollar (USD) terms reaching USD6.5bn while growth in rupee terms was even higher at 18% yoy.

Rupee depreciation has improved the competitiveness of Indian exporters in global textile trade against China, Bangladesh and Vietnam. India’s competitiveness has also has benefited from the appreciation of the Chinese yuan against USD and rising labour cost in China. Large international buyers have also diverted orders to India from Bangladesh on account of wage protests in September 2013 and a factory accident in April 2013.

Shahi Exports Private Limited (‘IND A-’/Stable), a leading garment exporter, registered revenue (unaudited) of INR18.65bn, up 25% yoy, and has an order book of INR12.75bn to be executed in the next three months. Eastman Exports Global Clothing Private Limited was upgraded on 21 October 2013 to ‘IND A’ from ‘IND A-’, primarily due to a significant improvement in revenue with the addition of new clients and a strong order book from them, among other positive rating drivers..

Strong revenue growth in FY14 and earnings are likely to improve the credit metrics of garment exporters. However, the challenge for exporters is to manage liquidity amid increasing volumes coupled with a long working capital cycle and the consequent higher use of working capital limits, which is a characteristic of the textile export business.

India Ratings & Research (Ind-Ra)

Must ReadView All

Textiles | On 22nd May 2017

GST to be biggest achievement of Modi govt: ASSOCHAM

Goods and Services Tax (GST) which is near a roll-out would be the...

Textiles | On 22nd May 2017

Maintaining NAFTA benefits is crucial: Cotton council

The US must remain a participant in a vibrant North American Free...

Apparel/Garments | On 22nd May 2017

Retailers ask Congress not to go for consumption tax

The National Retail Federation has asked US Congress to focus on...

Interviews View All

Rajiv Sirohi
Shara

‘Portugal is taking away a major share of the mill made sector.’

Smita Murarka
Amanté

‘There is huge demand in the Indian lingerie market for non-wired styles.’

Pratik Bachkaniwala
Palod Himson Machines

Fabric processing machines are picking up

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
May 2017

May 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search