The Indian hosiery industry is expected to witness between 18% and 20% year-on-year revenue growth thanks to a revival of rural demand. The industry should report a revenue total of around Rs 36,000 crore in the 2024 financial year, according to ratings agency Crisil Ratings.
“This fiscal, urban demand is expected to remain stable, while a well-distributed monsoon and probable inflation moderation should boost rural demand, leading to a recovery of 35% to 40% in volume,” said Crisil Ratings’ director Rahul Guha, ET Bureau reported. “Potential export opportunities, especially to Gulf countries, could bump up volume further.”
Close to half of India’s domestic hosiery industry revenue comes from rural areas so changes in rural demand have a significant effect on the sector. Last financial year, rural demand was affected by inflation and a drop in income for farmers and this caused the overall volume of the Indian hosiery industry to drop by 30% year-on-year.
“Capacity utilisation, which had fallen to 60% last fiscal, will rebound to around 90% this fiscal,” said Crisil Ratings’ director Himank Sharma, the Economic Times reported. “We don’t see companies taking up significant capacity expansion this fiscal, so addition of long-term debt will be minimal. Strong cash flows from higher revenue and profitability will be sufficient to meet incremental working capital requirement and keep overall debt in check.”
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