MUMBAI: India Ratings on Friday said that home textiles exporters are expected to witness growth in their topline and bottomline on account of sustained demand and stable raw material prices.
The home textile segment continued to exhibit demand resilience, led by the healthy demand, it added. "In home textiles, a sustained demand and stable raw material prices will lead to growth in exporters' topline and bottomline", Ind-Ra said in a report.
While home textile players reported a healthy rise in topline during FY'21, operating margins were impacted during the fourth quarter of FY'21, on account of an import duty on cotton along with uncertainty over remission of duties and taxes on export products incentives, the report stated.
Meanwhile, cotton prices corrected during April 2021, led by a lower demand from mills operating under lower capacities on account of micro lockdowns domestically.
Also, the report revealed that while the United States Department of Agriculture Foreign Agricultural Service (USDA-FAS) expects the domestic crop to increase by 2 per cent year-on-year in the next season commencing October 2021, consumption is slated to increase by 6-8 per cent Y-o-Y, leading to a reduction in ending stocks.
The marginal rise in production is despite an expected lower area under cultivation for the next season, albeit supported by a normal monsoon and increasing yield by 5 per cent to 497 kg per hectare, added the report.