Best Textile Stocks in India: If we take a look at the Indian textile industry it goes without saying that the country has a special place in history. Indian textiles and its early cotton industry have always been major sources of attraction for the west after spices.
If we take a look at the industry today, we are still set apart from the rest of the world making it an attractive investment opportunity that prospective investors cannot afford to overlook. In this article, we take a look at the Indian textile industry and also look into the Best Textile Stocks in India. Keep reading to find out!
Textile Industry Overview
The Indian textile industry is a multi-billion dollar industry that provides employment to 4.5 crores across the country. This makes it the 2nd largest employer in the country industry-wise. The Indian textile industry has a huge demand domestically.
In addition to this, the demand from other countries for exports has also increased significantly over the years. This is because several brands also look to India as a cost-effective manufacturing hub for their products
The industry contributed 2% to the Indian GDP prior to the pandemic in the year 2018-19. In addition to this, the industry also contributed 12% to earnings from exports and 5% to the global trade in textiles and apparel for the same period.
The textile industry was one of the hardest-hit industries during the pandemic. This was mainly because the industry did not have any alternative as workers were forced into a lockdown. In addition to this, the demand for many of their clients who were retailers also dropped drastically.
Despite the multitude of issues that the textile industry faced during the pandemic they found a silver lining and adapted when it came to manufacturing covid essentials. Today India is the 2nd largest manufacturer of PPE in the world.
The Indian apparel market was worth $55 billion as of 2020 and is expected to grow at a CAGR of 10% to be worth $190 billion by 2025.
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Best Textile Stocks in India
Now that we’ve understood the billion-dollar industry let us go through the Best Textile Sector Stocks in India.
Best Textile Stocks in India #1 – Trident Limited
Trident Ltd. was founded in 1990 and is part of the Trident group. In just 3 decades the group has evolved to be worth over three billion dollars. The company is a leading manufacturer of yarn and bath & bed linen. In addition to this, the company is also engaged in the manufacture of Wheat Straw-based Paper, Chemicals, and Captive Power.
When it comes to its textiles business trident is the largest manufacturer of terry towels in the world. The company is also the 2nd largest player in home textiles and the 3rd largest yarn manufacturer in India.
Trident Ltd. has several plans to further expand its business. The company has undertaken projects worth RS. 1,140 crores. This is to increase their yarn, sheeting, and power generation capacities.
The company has also shown consistent efforts towards the reduction of net debt from Rs 2,436 Cr as of March 31, 2019, to Rs 1,618 Cr as of March 31, 2022. The company has a debt-equity ratio of 0.51. Its MCap currently stands at 17,555 Cr
Best Textile Stocks in India #2 – Welspun India Limited
Founded in 1985, Welspun India Ltd. is one of the largest home textiles manufacturers in the world. The company’s product portfolio includes towels, bathrobe sheets, bedding, carpets, etc. Unlike other companies on this list, Welspun earns most of its revenue from exports.
As much as 84% of its revenue comes from exports. Out of this USA makes up for 67% of the company’s revenues and Europe makes up 17%. India makes up only 7% of the company’s revenues. Welspun India supplies its products to 17 of the top retailers around the world. These include retail chains like Walmart, Costco, Kohls’s, Ikea, and Bed Bath & Beyond.
The company has a low debt-equity ratio of 0.83 and its current Mcap stands at Rs. 6,639 crores.
Best Textile Stocks in India #3 – Lux Industries Limited
Lux Industries could be one of the most well-known companies on this list thanks to its advertising efforts. Founded in 1957, Lux Industries is engaged in the hosiery business. The company has a portfolio of over 100 products across 16 brands. Its brands include Lux Cozi, ONN, Genx, Lyra, and One8 among various others.
The company is known to spend a lot on its advertisements as many top Bollywood stars are often featured. Its current brand ambassadors include the likes of Kartik Aryan, Shah Rukh Khan, Katrina Kaif, and Amitabh Bachchan.
The company has shown positive signs with increasing revenues from Rs. 1077 crores in 2018 to Rs. 2295 crores in 2022. Its profits have also increased accordingly from Rs. 77 crores to Rs. 338 crores for the same period. The company maintains a low debt-equity ratio of 0.25 with a Mcap of Rs. 4,400 crores.
Best Textile Stocks in India #4 – Vardhman Textiles
Vardhman Textiles is engaged in the business of manufacturing Yarn, Fabric Acrylic Fiber, and garments with a presence in over 75 countries. The product range includes specialty yarns, dyed yarns, acrylic, fancy and hand-knitting yarns, and grey yarns.
The company also produces apparel that is also exported to the USA, Europe, and countries in Asia. Their clients include the likes of GAP, H&M, Walmart, Calvin Klein, and Tommy Hilfiger among many others. Exports make up 39% of their revenues. The company is one of the largest players in the domestic acrylic market and also one of the largest spinners accounting for 2% of the total in the country.
The shares of the company are available at a lower PE in comparison to the rest of the industry. In addition to this, the company has a low debt-to-equity ratio of 0.26. The company currently has a Mcap of Rs. 8,769 crores.
Best Textile Stocks in India List
|S.No.||Name||P/E||Mar Cap Rs.Cr.||Div Yld %|
|9||Go Fashion (I)||69.81||5,606||0|
|11||Indo Count Inds.||8.29||2,490||1.59|
|12||TCNS Clothing Co||101.64||2,979||0|
|25||Indo Rama Synth.||5.73||1,389||0|
|29||Monte Carlo Fas.||11.11||1,296||3.20|
|34||S P Apparels||7.69||759||0|
|50||Nahar Indl. Ent.||2.82||398||0|
The Indian textile industry is comparatively unique to the rest of the world particularly due to the unique moats in place. This also gives the Best Textile Sector Stocks in India several advantages. When we take a look at domestic demands the products are also culturally linked or specific.
Giving Indian producers an edge however not every company listed has capitalized on this. They however have taken advantage of the cost-efficiency of producing the country in comparison to other western countries.
Investing in the textile sector investors also must be wary of a new set of challenges. These include cyclical price movements and festival season advantages. That’s all for this post, let us know what you think about this article on the best textile sector stocks in India and your top pics in the comments below! Happy Investing!
Aron, Bachelors in Commerce from Mangalore University, entered the world of Equity research to explore his interests in financial markets. Outside of work, you can catch him binging on a show, supporting RCB, and dreaming of visiting Kasol soon. He also believes that eating kid’s ice-cream is the best way to teach them taxes.
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