Revival Of Demand For Textile Dyes In H2FY’24 – CareEdge Ratings
A glimmer of hope shines on the horizon for the Indian textile dyes industry in the second half of fiscal 2023-24, on an anticipated revival in demand from the textile industry and stabilisation of input prices, which could bolster the industry’s performance.
According to a CareEdge Ratings report, the domestic dye, dye intermediates and pigments sector faced significant hurdles in the previous fiscal, mainly due to volatile input costs and high inflation across major economies.
“Other challenges included disruptions stemming from the Russia-Ukraine war, and stiff competition from low-cost Chinese products. Despite the subdued performance, the solvency position of major players in the industry is expected to remain relatively comfortable in the current fiscal,” the report added.
“This observation bodes well for their ability to manage capital expenditure and incremental working capital requirements,” the report stated.
“The dye, dye intermediates and pigment industry is poised for recovery after the challenges faced in fiscal 2022-2023. The demand from the textile industry is expected to improve in second half of current fiscal, although the first half of fiscal 2023-24 may remain subdued,” Kalpesh Patel, Director at CareEdge Ratings said.
“This anticipated rebound should result in moderate volume growth and a slight improvement in profitability as input costs stabilise. Further, the major players in the industry are likely to maintain comfortable debt protection metrics with controlled leverage and stable interest rates. This positions them well to handle any capital expenditure or incremental working capital requirements,” he added.
