Higher Local Cotton Prices To Impact Margin, Says Vardhman Textiles
The new rebate scheme announced by the Ministry of Textiles will indirectly help the company, Vardhman Textiles said.
Textile makers may not be able to sustain the strong growth in margins as seen in the last quarter due to higher support price for cotton, according to Neeraj Jain, joint managing director at Vardhman Textiles Ltd.
“The increase in minimum support price has made the local cotton prices much higher this year,” Jain told BloombergQuint in an interview. The trading gains, he said, aided the increase in profit margin last year. “The trading advantage, however, due to the difference in prices could return this year due to lower overall cotton output.”
Jain said the new rebate scheme of all embedded taxes and levies announced by the Ministry of Textiles will “indirectly help” the company as it supplies raw materials to home textiles and garment makers.
Watch the full interaction here: