Indian home textile exporters are set to register robust performance in fiscal 2021-22 due to several factors, including pandemic-induced lifestyle changes and rise in stay-at-home options. With a sharp surge in demand for home improvement products in India over the past 12 months, the momentum is likely to sustain during the rest of this fiscal, ICRA said recently.
The export demand has been mainly driven by the United States, the largest market, accounting for nearly 60 per cent share in the country’s home textile exports.Indian home textile exporters are set to register robust performance in fiscal 2021-22 due to several factors, including pandemic-induced lifestyle changes and rise in stay-at-home options. With a sharp surge in demand for home improvement products in India over the past 12 months, the momentum is likely to sustain during the rest of this fiscal, ICRA said.#
Institutional demand is also likely to pick up with revival in the hospitality sector, ICRA said.
While increased raw material and logistics costs remain a transitory drag, benefits of operating leverage and improved clarity on export incentives to help offset the impact, it said.
ICRA’s sample set of companies, comprising four large, listed players accounting for 35-40 per cent share in India’s home textile exports, are projected to clock a robust double-digit growth of 20-25 per cent in FY22.
This follows a subdued 5 per cent growth in revenues reported by the sample in FY21, primarily due to 40 per cent year-on-year (YoY) dent in performance in the first quarter (Q1) of the last fiscal; the sample grew by 25 per cent YoY during the rest of the year, ICRA said in a press release.
“Compared to a 9 per cent increase in India’s home textile product exports of $5.7 billion in FY2021, exports to the US increased by nearly 14 per cent, while exports to the other major markets of the UK and the EU [European Union] reported a YoY decline during the year," Pavethra Ponniah, senior vice president and co-group head, corporate sector ratings, ICRA, said.
"Besides faster opening up, increase in exports to the US is partly attributable to the distribution model for these products, with a meaningful share accounted for by the large departmental chains that remained open even during the lockdown phase,” he added.
Moreover, expectations of a strong festive demand this year, backed by favourable vaccination coverage across key markets is reflected in the healthy order book position of Indian home textile exporters, the rating agency concluded.
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