After a challenging year marked by low demand, excessive inventory, limited supplies, and surging cotton prices, the textile sector is poised for a turnaround. Industry experts predict a revival in demand, particularly in the third quarter of FY24, as global retailers reduce their inventories and place orders for the upcoming Summer/Spring 2024 collections. 

Analysts Optimistic About Textile Sector's Rebound in FY24 

Favorable market conditions, including geopolitical uncertainties faced by competitor countries, are expected to inject vibrancy into the sector. Consequently, textile players are projected to experience consistent earnings growth and improved cash flows. With completed capital expenditure, the focus will shift toward strengthening balance sheets and enhancing return ratios. Additionally, falling cotton and crude prices are set to bolster margins and enhance India's competitiveness in export markets. The industry has already gained market share in key export markets for garments and home textiles. 

The prospects of a UK free trade agreement and the China+1 strategy further enhance the sector's potential for recalibrating earnings and multiples.