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Arvind To Welspun: Textile Industry's Growth Levers In Place, Outlook Upbeat: Systematix

Arvind To Welspun: Textile Industry's Growth Levers In Place, Outlook Upbeat: Systematix

<div class="paragraphs"><p>A vendor displays cloth for customers at a stall in New Delhi. (Photographer: Sanjit Das/Bloomberg)</p></div>
A vendor displays cloth for customers at a stall in New Delhi. (Photographer: Sanjit Das/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Systematix Report

India’s garment exports ($17 billion) are lower than its peer countries like Vietnam ($35 billion), Bangladesh ($32 billion) and China ($175 billion) even as it accounts for ~27% of the global cotton capacity and has the world’s second-largest labour force along with significantly lower water costs.

This is attributable to the European Union's duty-free access to several countries (Vietnam, Bangladesh, Cambodia, Pakistan), while imports from India attract a ~10% duty and involve higher power costs & longer lead times.

Strong tailwinds should support India’s overall textile exports.

  • Arvind Ltd. plans to sweat its existing assets for the next 2-3 years for growth and hence, requires minimal capex.

  • Welspun India Ltd. is expanding its traditional business capacity after four years with capacity addition of 7% in towels (from Q1 FY21), 20% in bed linen and 50% in rugs (from H2 FY22).

Click on the attachment to read the full report:

Systematix Indian Textiles Industry Conference Takeaways.pdf

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