AN ANALYSIS ON EXPORT OF INDIAN TEXTILE INDUSTRY WITH SPECIAL

REFERENCE TO LUDHIANA.

Presented By : Pushp Sambyal

MBA- 2B

Introduction to The Company

“At Nahar,

excellence is always an ongoing journey

never destination”

The Nahar Group

Nahar group came into existence in 1949 .

It was established with initial efforts of three Oswal brothers Sh.Vidya Sagar Oswal ,Sh. Lachman Dass& Sh. Rattan Chand Oswal.

The initial capacity of nahar group was 800 spindles.

At present it has more than 66200 spindles of capacity.

OSWAL WOOLLEN MILLS LTD.

NAHAR INDUSTRIAL ENTERPRISES LTD.

NAHAR SPINNING MILLS LTD.

Nahar Group of Companies

Introduction to

At OWM, Even the Word“Impossible”

Says“I’m Possible.”

It was established in 1949 by Sh. Vidya Sagar Oswal.

It is manufacturing all type of blended worsted yarn, weaving yarn, shawls,garments etc.

OSWAL WOOLLEN MILLS LTD

Group turnover is Rs. 2500 Crore.

Export Markets: Argentina ,Brazil ,China, Poland ,Portugal ,U.K ,U.S.A, Turkey, South Africa, Egypt, Israel and Bangladesh.

Social upliftment by establishing Jawahar Lal Oswal Public

Charitable Trust and Mohan Dai Oswal Memorial Hospital.

Features

Mr. Jawahar Lal Oswal Chairman-Cum-Managing Director 

Mr. Amarjeet Singh Director 

Mr. Dinesh Oswal Director 

Mr. Kamal Oswal Director 

Mr. Sandeep Jain Executive Director 

Mr. Dinesh Gogna Executive Director 

Dr. (Mrs.) H.K. Bal Additional Director 

Mr. O.P. Sahni Additional Director 

Mr. K.S. Maini Additional Director

Dr. Suresh Kumar Additional Director

List of Directors

Wool / acrylic top

Yarns

Textile fabrics

Hosiery knitwear products

Product Portfolio

Brands of OWM

Quality Control

Human Resource Department

Finance Department

Marketing Department

Departments in OWM

Major competitors in pullovers and cardigans

Casablanca Pringle (Scotland)

Competitors of woolen/blended worsted yarn Vardhman Textiles Limited Jayshree Textiles Limited

Malwa Cotton Mills Limited

Competitors of their denim fabric

Arvind Mills Limited Aarvee Denims Limited Raymond Limited

Competitors

SWOT Analysis

Good Brand Image.

Many persons are working here for more than 50 yrs. This shows commitment of employees towards their org.

Member of wool mark and ISO 9002.

Laboratories for testing the quality of the product.

Strengths

OWM is dependent upon foreign producers for greasy wool.

Depend on the third party for sale and the distribution of the product.

Weaknesses

Fabrication for various companies likes NIKE, MARKS AND SPENCER, GAP, WILLS, etc.

Manufacturing of kids garments.

Opportunities

Mushrooming and upcoming of small hosieries in Ludhiana.

Seasonal demand for their major product i.e. pullovers.

Threats

Ratio Analysis is one of the most powerful tools of

financial analysis. It is used as a device to analyze and interpret the financial health of an enterprise .

FINANCIAL ANALYSIS

Particulars 2006-2007 in Lac 2007-2008 in Lac 2008-2009 in Lac

Current Assets 20543.67 30129.28 30422.64

Current Liabilities 11185.67 9044.30 9897.32

Current Ratio 1.84 3.33 3.07

Current Ratio = Current Assets / Current Liabilities

Firm’s ability to pay its current liabilities out of its current assets.

Particulars 2006-07 in Lacs

2007-08 In Lacs

2008-09 In Lacs

Quick Assets 9060 17328 17506

Current Liabilities 11185 9044 9897

Quick Ratio 0.81 1.915 1.7688

Quick Ratio = Quick Assets/Current Liabilities

In the years 2007-08 & 2008-09 ,the company is satisfactorily liquid to fulfill C.L well in time but it is not satisfactory in the year 2006-07 i.e. 0.81 which is less than rule of thumb 1:1.

Particulars 2006-07 in Lacs 2007-08in Lacs 2008-09in Lacs

Net profit available 1402 2127 2368

Number of shares 249 249 249

EPS 5.63 8.54 9.51

Earning Per Share = Net profit available to equity holders after tax & preference dividend

Number of ordinary shares outstanding

EPS is increasing in the year 2006-07 to 2008-09 . The major reason is that company s net profit is increasing every year but the number of shares being the same every year, so the earning per share is increasing every year.

INTRODUCTION

TO

INDIAN TEXTILE INDUSTRY

India textile industry largely depends upon the textile manufacturing and export.

India earns about 27% of its total foreign exchange through textile exports.

It also contributes around 3% to the GDP of the country

Indian Textile Industry

It is the second largest employer after the agriculture sector in both rural and urban areas.

Textile sector contributes 14% of value addition in manufacturing sector.

Contd…

Indian Textile Industry

COTTON TEXTILE

MAN -MADE

SILKJUTE

WOOLLEN TEXTILES

2008-09 % ShareTextile Clothing & Garments

20,219 93%

Undergarments 1,487 6.80%

Home Textile Furnishings 2.16 0.01%

Accessories 0.29 0.001%

Total 21,708.45

Market Size of Indian Textile Industry

Value-wise share of various products in total T&C exports by India (2008-09):

Share of major export markets in total T&C exports by India (2008-09 Value-wise):

INDIAN TEXTILE EXPORTS (2008-09)ITEM WISE

Strength

Export Target of Indian Textile Industry

Ludhiana is one of the principal producers of woolen and acrylic knitwear, apart from it also uses cotton and blended fiber to produce hosiery, knitwear and various ready-made garments.

The total output of hosiery products in Ludhiana is estimated to be around Rs. 8,000 crore in 2008-09 and the share of domestic sale to exports is to the tune of 75:25 ratio.

Ludhaina Textile industry

The major export markets of Ludhiana today are the EU, US, Africa,Vietnam & Bangladesh. 

Ludhiana accounts for nearly 90 per cent of the country’s woolen hosiery industry

Ludhiana Textile Industry serves as the backbone of Indian hosiery industry.

Cont…

42

29

21

8

HOISERY KNITTED

MILLS

HANDLOOMS

POWERLOOMS

Sector wise share in Ludhiana

Percentage share of companies in total exports of textiles in 2008-09 from Ludhaina .

30%

15%

15%

10%

8%

7%

5%

5%3%

2%

%GE SHARE IN EXPORTS

VARDHMAN

OSWAL

MALWA

SHARMAN

YWL

ARTI INTL.

RAGHAV

GANGA

INDO WORTH

OTHERS

Percentage of domestic sales to exports of textiles in Ludhaina(2008-09)

75%

25%

Share of Domestic Sales to Exports

Domestic Sales

Exports

AN ANALYSIS ON EXPORT OF INDIAN TEXTILE INDUSTRY

WITH SPECIAL REFERENCE TO LUDHIANA

Title of the Project

To analyse the export potential of Ludhiana textile industry.

  To know the factors affecting exports of textiles.

To know the strengths & weakness of textile industry. 

Objectives

RESEARCH METHODOLOGY

Research Design:

Descriptive.

Sampling Technique: Convenience & snowball sampling.

Universe: All the exporters of textiles.

Population: All the exporters of textiles in Ludhiana

Sample Unit: A single textile company in Ludhiana which is into

export business.

Sample Size: 20 Exporters.

Sample Type: Area Sampling : Sample area of the study is

Ludhiana

Data collection: Primary data : Questionnaire.

Secondary data: Journals and websites.

The study is limited to Ludhiana city due to time constraints.  The Sample size has been restricted to 20 due to constraints of time .  The analysis could have been made much more accurate, if the

project be done in other cities also. The respondents were busy or for some other reasons, did not show

much attention filing the questionnaire; hence the chances of biasness could be possible.

  To collect valid data a senior authority was needed to fill the

questionnaire. Most of the time they were having important works to do and questionnaires were filled by other people.

 

Limitations of the study

Data Interpretation &

Analysis

Table 4.1 Nature Of Company (N = 20)

95%

5%

Nature of Company

Manufacturing

Trading Company

MNC

Others

23%

16%

3%

23%

29%

6%

Specification of Export Products

Woollen Cotton

Fiber Yarn

Garments Other

Table : 4.3 Specification Of Export Products (N= 20)

Table 4.4 Performance Of Export Sales (N = 20)

1-10% 10-25% 25-50% 50-75% >75%0

20

40

60

80

100

120

Export Percentage to Total Sales

%age of Exports

Export %ge

%ag

e

USA; 3.45

Australia; 3.5

S.Africa; 1.55

Europe; 1.85

Others; 4.65

Most Potential Market for Exports

USA Australia

S.Africa Europe

Others

Table 4.5 Potential Market For Exports (N= 20)

48%

4%

12%

36%

Factors affecting Exports

Target Market

More Incentives

No Payment delays

Govt. Policies

Others

Table 4.6 Factor Affecting Exports ( N = 20)

Personnel risk; 2.6

Competition Risk; 1.55

Credit Risk; 2.7

Liquidity Risk; 3.15

Others; 5

Exporters' Risk

Personnel risk

Competition Risk

Credit Risk

Liquidity Risk

Others

Table 4.8: Exporter’s Risk ( N = 20)

12%

53%

12%

6%

18%

Competition faced from differnt countries

Bangladesh

China

Pakistan

Srilanka

Vietnam

Others

 Table 4.9: Competition Faced From Different Countries

15%

6%

21%

35%

24%

Nature of Competition

Skilled Labours

Frieght Charges

Quality

Govt. Policies

Better Infrastructure

Others

Table 4.10: Table nature of competition (N = 20)

2.7

1.9

2.3

3.1

Strength

Low Labour CostAbundant raw material Quality productsPotential domestic & international market

 Table 4.11.1: Strengths of Textile industry ( N=20 )

2.6

3.2

3.5

2.4

3.3

Weakness

Lack of technologyFragmented industryUnfavourable lawsGovt. PoliciesInfrastructure

  Table 4.11.2: Weakness of Textile industry ( N=20 )

65%

30%

5%

Future Potential of textile industry

GrowthStableDecline

Table 4.14: Future potential of textile industry ( N=20 )

Most of the export houses in Ludhiana are dealing in garments, woollen & yarn sector.

Majority of the exporters of Ludhiana find South Africa as their potential export market followed by European countries .

Strength of the textile industry is abundant raw material and the Weakness is govt. policies.

China is the major competitor of Indian textile industry.

Findings

Government . has to extend validity of promotional schemes to promote textile exports.

Ludhiana textile industry should explore new markets for exports .

Government should take steps to provide better infrastructure ,technology, innovations & govt. policies to boost textile industry in near future.

Suggestions

Conclusion

Thank You