India’s textile industry saw phenomenal sales and EBITDA growth in FY22 over pre-COVID levels, shows latest Wazir Textile Index compiled by Wazir Advisors for the year FY22. The index based on the analysis of 10 companies highlights, overall grew by 18 per cent Y-o-Y since 2020. Welspun India recorded highest sales at Rs 5,956 crore followed by Vardhman Textiles with total sales worth Rs 5,788 crore. The third highest was Arvind Ltd with sales worth Rs 4, 519 crore.
Overall textile sector revenues grow 85%
In FY22, total revenues of India’s textile industry grew 85 per cent over FY20 levels. However, EBITDA margins of Welspun declined from 20 per cent in FY20 to 18 per cent in FY21 and further to 13 per cent in FY22. Vardhman Textiles EBITDA dropped to 13 per cent in FY21 from 14 per cent in FY20. However, it increased to 23 per cent in FY22. On a consolidated basis, EBITDA margins of the selected 10 players increased 5.0 percentage points.
Cost of raw materials dropped 2.0 percentage points
The average raw material cost of the textile industry grew 36 per cent in FY22 over FY20 while cost of manpower increased 19 per cent. Based on percentage points, raw material costs decreased 2.0 percentage points in FY22 over FY20.
Welspun’s raw material costs highest
Raw material costs of Welspun India grew 53 per cent in FY’21 as compared to 49 per cent in FY’20 and further increased 58 per cent in FY’22, this was by far the highest among all ten companies in the study. The second highest increase was recorded by Vardhman Textiles whose costs increased 54 per cent in FY’21 over 53 per cent in FY’20. However, it declined to 48 per cent in FY’22.
Average employee costs decline by 19%
Compared to FY’20, the average employee cost of the top ten industry players grew 19 per cent in FY’22. However, the average employee cost fell by2.0 percentage points in FY’22 over FY’20. From 10 per cent in FY20, Welspun India’s average employee cost declined to 9 per cent in FY21 and 8 per cent in FY’22.
The employee cost of Vardhaman Textiles increased to 10 per cent in FY21 from 9 per cent in FY’21. However, it fell further to 7 per cent in FY’22. Arvind Ltd’s employee cost also followed a similar patter, increasing to 13 per cent in FY21 over FY20 but falling to 9 per cent in FY22.
Quarter on quarter sales 29% in Q4
The consolidated sales of all 10 textile players quarter-on-quarter (Q-o-Q), grew 29 per cent to Rs 14, 255 crore in Q4 of the year compared to corresponding quarter of previous year. Average EBITDA margins of the companies declined 1 percentage points in Q4FY22 to 6 percentage points compared to 5 percentage points in Q3FY22.
Fiber exports dominate
India’s textile and apparel exports grew at a CAGR of 13 per cent from $34,222 million in FY20 to $43, 435 million in FY22. Triggered by the US ban on exports from China, India’s fiber exports achieved highest growth of 46 per cent from $1,891 million in FY20 to $4,041 million in FY22. This was followed by yarn exports which grew 36 per cent from $3,501 million in FY20 to $6,474 million in FY22. The United Arab Emirates topped with highest share of India’s textile and apparel exports at 36 per cent while the share of exports to Bangladesh increased 7 per cent during the year.
Yarn imports total 26% in FY’22
India’s textile and apparel (T&A) imports have grown steadily since 2020. Imports of filament yarn increased 26 per cent during the year compared to FY20. China continued to be the largest importer of fibers and yarn from India though its share declined by 2.0 percentage points compared to 2021.
