With Piyush Goyal as Textiles Minister, the sector is looking up: Analysts
With the government extending the Rebate of State and Central Taxes and Levies programme on exports of clothing and made-ups until March 2024, shares of most textile firms dominated the headlines.
The majority of the stocks of export-oriented textile companies reached fresh 52-week highs. Welspun India and Arvind both set fresh highs of 130 and 111, but closed at 125 and 109, respectively, owing to profit-taking. Similarly, Vardhman Textile reached a 52-week high of 1,660 before closing at 1,608. Himatsingka Seide, Nitin Spinners, Bonswara Syntex, Nandan Denim, Donear Industries, Suryalata Spinning, and Suryalakshmi Cotton were among the other companies that reached a 52-week high.
Analysts believe that, in addition to the export concession, the sector is now more optimistic as a result of the appointment of Piyush Goyal as textile minister.
According to Vishal Wagh, Research Head at Bonanza Portfolio, a further rise of 10-15% in textile stocks cannot be ruled out, as the appointment of Piyush Goyal as Textile Minister has raised expectations in the sector.
Analysts believe that, in addition to the export concession, the sector is now more optimistic as a result of the appointment of Piyush Goyal as textile minister.
According to Vishal Wagh, Research Head at Bonanza Portfolio, a further rise of 10-15% in textile stocks cannot be ruled out, as the appointment of Piyush Goyal as Textile Minister has raised expectations in the sector.
Uncertainty over the structure and rates of export incentives made it difficult for exporters to price their commodities over the previous six to seven months. The recently approved concession includes clothing and made-ups, which contribute for around 55-60% of India’s textile exports. Apparel exports plummeted by 25% in a year due to the Covid epidemic, while the global apparel trade shrank by 13%.
According to ICRA, the Government’s decision to discontinue MEIS incentives and create the RoDTEP scheme was intended to make India’s export incentive programmes compliant with WTO standards. Clarity is required on other textile categories such as raw materials and intermediate goods like fibres, yarns, and textiles under the Ro DTEP system, she stated.
