Thanks to an expected recovery in demand conditions and restocking by big retailers from the US market to realign their inventory levels, Icra, the rating agency, expects its sample of 4 leading home furnishing companies to report a 7 to 8 per cent Y-o-Y increase in revenues to Rs. 215 billion for FY 2024.
The operating margins also are set to improve by 250 to 350 bps in FY 2024 with expected improvement in revenues from Q2 FY 2024 onwards with the festive season.
The four listed home textile companies Welspun, Trident, Himatsingka, and Indo Count, account for about 35 to 40 per cent of India’s home textile.
“We expect home textile exporters to be on a road to recovery, as restocking by big retailers from the US markets has started since Q1 FY 2024. Further, as our channel checks indicated, with the festive orders coming in from Q2 FY 2024, the order book position is estimated to have improved for home textile exporters,” said Kaushik Das, VP and Co-group Head, Corporate Sector Ratings said.
India’s home textile exports reported a double-digit decline of 18 per cent and 12 per cent in FY 2023 and 4M FY 2024, respectively, amid high raw material expenses and energy inflation, coupled with a muted demand scenario in the US and the EU markets.
The US remains the largest market for Indian home textile exports, with a 56 per cent share in FY 2023 and a 58 per cent share in 4M FY 2024.
