Why is everyone talking about the Indian Textile Industry?
For our textile business, the coronavirus epidemic is a classic illustration of both a boon and a bane. Our industry was knocked down a notch, but the "China + 1" plan had proven to be a gift. Global firms have been transferring manufacturing activities from China to other sourcing locations as part of this move to de-risk their supply chain.
Moreover, our Indian textile industry employs approximately 4.5 million people across the nation, making it workforce heavy. And with an expected growth of 2.5X in the coming five years, India has been regarded as the ideal 'plus one' destination. But will India be able to do justice to this opportunity?
The Indian textile industry and its worth
The world is vouching for the Indian textile industry. But wouldn't you want to know what makes this sector so attractive?
There are a couple of pointers to look at:
India produces 25% of the world's cotton and has very low labour costs, pushing domestic demand.
Recently, government regulations have been improving the “ease of doing business” in India.
With FDI inflows, our manufacturing infrastructure and supply chain have improved.
Exports to other nations have risen dramatically, contributing to almost one-third of our overall export revenue.
This is not over yet! Indian textile industry has shown the world what it can do in just a couple of months. Despite being heavily impacted by the pandemic, the industry evolved when producing covid essentials, and now we are the second-largest producer of PPE kits globally.
Thus we know you can not go wrong if you believe in the Indian textile industry's real worth. Does it mean all textile stocks are equally rewarding? Obviously not! But then, out of a plethora of textile stocks in India, which one should you select to invest your money in? Look no further, we got you covered.
7 best textile stocks in India for 2022
Trident Ltd. was established in 1990 and has been a part of the Trident Group. The company is a leading producer of yarn, bath, and bed linen. In addition, the company is involved in producing Chemicals, Wheat Straw-based Paper, and Captive Power. Trident is the world's largest manufacturer of terry towels for its fabrics. Trident Ltd. has several initiatives to expand its business in the same way. The company has completed projects worth Rs. 1140 crores. The company has also demonstrated consistent efforts to reduce its net debt from Rs 2408 crore on March 31, 2019, to Rs 1245 crore on June 30, 2020.
Lux Industries Ltd. was established in 1957 and operated in the hosiery industry. The company's inventory includes over a hundred items from sixteen different manufacturers. Lux Cozi, ONN, Genx, Lyra, and One8, among others, are among its makers. Many top Bollywood actors are routinely included in the company's classified advertising, leading to speculation that it spends a lot of money on them. With revenues rising from Rs. 1077 crores in 2018 to Rs. 1953 crores in 2021, the company has demonstrated good signs and symptoms with a Mcap of Rs. 11,423.66 crores, the company has a low debt-to-equity ratio of 0.13.
Welspun India Ltd. is one of the most prominent domestic textile manufacturers globally. The company's product offerings include towels, bathrobes, sheets, beds, and carpets. Unlike the other agencies on this list, Welspun gets most of its revenue from exports. Exports account for up to 84% of the company's revenue. The United States accounts for 67% of the agency's sales, while Europe accounts for 17%. The best 7% of the agency's sales come from India. Welspun India distributes their products to 17 of the world's most prestigious stores. Retailers such as Walmart, Costco, and Ikea fall under this category. The company has a low debt-to-equity ratio of 0.78 and a cutting-edge market capitalization of Rs. 13,363 crores.
Vardhman Textiles: Vardhman Textiles is a global manufacturer of yarn, fabric, acrylic fiber, and clothing in over 75 countries. Specialty yarns, colored yarns, acrylic, fancy and hand knitting, and grey yarns are available products. The company also produces clothing exported to the United States, Europe, and Asian countries. Among its many clients are GAP, H&M, Walmart, Calvin Klein, and Tommy Hilfiger, to name a few. Exports account for 39% of their earnings. The organization is considered one of the most prominent players in the home acrylic industry and one of the major spinners, accounting for 2% of the country's entire demand. As of now, the market capitalization of the company is Rs. 10,402 crores.
Sangam India Ltd. was founded in 1984 and is one of the leading makers of PV-coloured yarn, cotton, and OE yarn and can weave fabric. The BSE and NSE-listed company manufactures 48 million meters of denim cloth and 35 million meters of PV fabric annually. This intensity of manufacturing is possible thanks to a well-prepared manufacturing base that includes about 2,36,000 spindles and 2300 rotors. Sangam Suitings, the company's flagship brand, operates through a distribution channel and has a pan-India community of 10,000 merchants. It is valued at INR 1323 crores on the stock exchange. Apart from its vigorous business endeavors, Sangam Group is also actively interested in social welfare.
Nitin Spinners Ltd: Dollar Industries Limited has evolved as one of the best textile stocks in India in 2022, with an impressive 15% market share and a significant share of fabric exports in the entire production of the Indian hosiery industry. It has also established a strong presence on social media and e-commerce channels. Dollar Industries Limited has a significant presence in 29 Indian states. Not only that, but the products have also expanded outside the borders of India, becoming the most popular Indian innerwear brand in the UAE and the Middle East. Dollar Industries Limited is India's leading hosiery and knitwear company, with a fully integrated production facility. Dollar installed a four-megawatt solar energy plant at its Tirupur manufacturing facility in 2020. Their current market capitalization is Rs. 3,052 crores.
The Raymond Organisation: Raymond is a broad company having a majority of its business interests in the Textile and Apparel sectors, together with a presence in numerous areas such as FMCG, Real Estate, Engineering, and Prophylactics in both domestic and international markets. Raymond is credited with providing worldwide elegance and delightful items to its customers over the past nine decades, having enjoyed the patronage of over 1000 million customers. Raymond is an aspirational player in the Denim sector, one of the preferred suppliers of high-quality Ring Denim to the world's most renowned Jeanswear brands. Raymond also offers ready-to-wear apparel brands such as Raymond Ready To Wear ColorPlus, Ethnix, Parx, and Park Avenue, having established its supremacy within the textile industry. The Raymond company has a market capitalization of Rs 8447 Crores making it one of the strongest textile stocks in India.
Compared to the rest of the globe, the Indian textile sector is rather distinctive. This benefits their stocks in several ways. Investors must be aware of a new set of problems when investing in the textile industry. These include cyclical pricing swings and the benefits of the festival season. So, what are you waiting for? Start your investing journey by researching these textile stocks in India from Ticker by Finology.
*Disclaimer: The stock(s) discussed above aren't recommendations from Finology, they are only picked to make you understand the concept.