Indian cotton spinners are likely to report double-digit revenue growth and all-time high profits in 2021-22, mainly driven by high demand and realizations, according to a report. While the growth is primarily being led by all-time high realizations, which have sustained for much of the year, volumes are also estimated to be better than the pre-COVID levels, the report said.
Besides recovery in domestic order, robust growth in export demand has also supported volumes, it added. Large and mid-scale spinning companies are expected to report robust double-digit growth in revenues and all-time high profits in FY22, with 400-600 bps improvement in operating margins, Icra Ratings said in the report.
“Companies, which had higher stocks of lower-cost cotton from the previous season, benefitted more in terms of profitability in H1 FY22. “This apart, the inclusion of all cotton yarn exports under Remission of Duties and Taxes on Exported Products (RoDTEP) scheme from January 2021 onwards (as notified in August 2021) has also supported margins as well as price competitiveness of domestic spinners in the international markets,”
