Garment Manufacturers Revenue May Rise 8-10% In FY’24

Revenue of Indian garment manufacturers is expected to increase by 8-10 percent in current fiscal on the back of healthy domestic demand and revival in exports.

According to a CRISIL Ratings report, volume growth will be higher at 6-8 percent in the present fiscal, as against 3-5 percent in the previous fiscal.

The report also expects prices of cotton to decline 15-17 percent and manmade fibres to fall 8-10 percent year on year this fiscal.

The report added that the credit outlook for apparel manufacturers remains stable, driven by steady operating performance and healthier balance sheets amid low capital expenditure (capex) intensity.

“Garment makers will rely on domestic consumption which is expected to grow 6-8 percent in volume terms this fiscal,” Gautam Shahi, Director, CRISIL Ratings said.

“Lower inflation levels and stable economic growth are keys to healthy discretionary spending by consumers domestically,” he added.

Gautam Shahi further said that volume of exports will grow 4-6 percent year on year this fiscal, led by restocking by global retailers and a slow but gradual pick-up in consumption in overseas markets.

The report stated that in the current fiscal, higher domestic and export volume and lower cotton prices will help expand operating margin by 50 basis points (bps) year on year to 9.5 percent.

“In contrast, operating margin had shrunk 150 bps in the previous fiscal due to rise in cotton prices, delayed price hikes in the domestic market, and lower offtake by global retailers amid inventory pile-up,” the report added.

CRISIL analysed 146 CRISIL-rated clothing manufacturers with aggregate revenue of Rs 42,000 crore for the report.