India's home textile exports set to drop by 16-18% in FY23: CareEdge

After a boom seen in FY21 and FY22, the overall textile exports from India contracted by 13.4 per cent year on year (YoY) at $23.1 billion during the April-November 2022 period.

In contrast, FY22 witnessed home textile exports worth $44.4 billion, helped by the pandemic-induced demand and the China+1 strategy of importing nations.

After hitting the peak in Q2 FY22, India’s home textile exports started plateauing with a sharp surge in commodity inflation and a global recessionary trend disrupting growth, CareEdge noted in a release.

The operating margins for the top four listed home textile companies (comprising 30-35 per cent market share in India’s home textile exports) have been moderating on a quarterly basis and are expected to weaken by 400-500 basis points for FY23.

Lower demand and higher operating costs due to lower capacity utilisation are denting the margins despite the reduction in cotton prices.

Products that are primarily used for home decor experienced tremendous growth compared to pre-pandemic levels. For instance, bed, table, and bath linen imports by the US and European markets increased by 29.44 per cent YoY in FY21 to $23.4 billion from $18.07 billion.

However, FY22 saw signs of contraction by around 8.1 per cent in the import of bed, table and bath linen.

Overall, the India’s aggregate home textile exports saw a de-growth of 3 per cent in FY22 post the abnormal growth of 10 per cent YoY in FY21.

The export demand was also dented by an uptrend in key raw material prices like cotton that led to higher finished good prices hurting the demand.

Fibre2Fashion News Desk (DS)