Wazir Textile Index Textile Index Report - Q1 FY20...Start 5 Wazir Textile Index (WTI) –Q1 FY20...

Wazir Textile IndexQuarterly Update

Q1 FY 2020

September 2019Textile Sector Performance Update

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Contents

• Wazir Textile Index – Q1 FY20

• Quarterly Financial Performance – Q1 FY20

• Market Update

• Key Economic Indicators

• Export – Import Trend

• Raw Material Price Trend

• Annexure: Wazir Textile Index – Explanation

Wazir Textile Index (WTI) – Q1 FY20

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List of companies included as part of the financial analysis

Top listed textile companies in terms of sales turnover in FY19 have been included for financial analysis.

S. No. Company Name Annual Sales* - FY19 (Rs. Crore)

1 Arvind 6,436

2 Vardhman 6,415

3 Welspun India 5,395

4 Trident 5,220

5 Raymond 3,276

6 KPR Mill 2,979

7 RSWM 2,961

8 Filatex 2,874

9 Sutlej 2,562

10 Nahar Spinning 2,305

Note: Companies that have shown significant negative deviation in numbers or those which have not yet reported the financials have not been included in the overall analysis.SRF has been excluded as it’s financials indicate performance of other business segments as well.

Source: Money Control * Sales constitutes total operating income, standalone financials have been considered for analysis

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Wazir Textile Index (WTI) – Q1 FY20

100112.3 116.5 125.5 130.9

Base Year(Q1 FY16)

Q1FY17

Q1FY18

Q1FY19

Q1FY20

WTI Sales

100 110.6 84.3 89.8 96.6

Base Year(Q1 FY16)

Q1FY17

Q1FY18

Q1FY19

Q1FY20

WTI EBITDA

100 100 100 114.1 120.8

106.7

127.9 132.2

111.4

140.5 138.3

117.1

145.6 148.1

120.1

RM Cost Employee Cost Other Cost*

Base Year (Q1 FY16) Q1 FY17 Q1 FY18 Q1 FY19 Q1 FY20

WTI Cost

• In Q1 FY20, overall salesincreased by 4% ascompared to Q1 FY19.

• The overall EBIDTAshowed a notablegrowth of 8% in Q1 FY20as compared to Q1 FY19.

• However, manpowercost and raw materialcost also increased by7% and 4%, respectivelyduring the same period.

* Other cost include overheads, cost of utilities, admin & selling expenses, etc.

Quarterly Financial Performance – Q1 FY20

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Revenue for majority companies witnessed growth, while EBITDA margins declined

1,671 1,5811,329

1,131

609 761 710 704615 583

1,7421,558 1,435 1,305

685 802 701 697 649534

Arvind Vardhman Welspun India Trident Raymond KPR Mill RSWM Filatex Sutlej Nahar Spinning

Q1 FY19 Q1 FY20

4% -1% 8% 15% 13% 5% -1% -1% 5% -8%

Yearly Sales* Trend – Q1 FY20 (Rs. Crore)

11%17% 18% 17%

0%

18%

8% 8% 8% 10%9%15%

24% 23%

2%

17%

5% 7% 7% 7%

Arvind Vardhman Welspun India Trident Raymond KPR Mill RSWM Filatex Sutlej Nahar SpinningQ1 FY19 Q1 FY20

Yearly EBITDA Margin Trend – Q1 FY20

• Sales of majority companies have shown growth in Q1 FY20. Trident has shown the highest sales growth of 15% followed byRaymond with 13%. However, Nahar Spinning witnessed a decline of 8% in their sales.

• Majority companies showed a dip in their EBIDTA margins. Welspun and Trident have showed a growth of 6 percentage points intheir EBIDTA margins.

Source: Money Control * Sales & EDITDA are as per operating performance of companies

Growth %

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Quarterly Analysis - Major Expenses as % of Sales

47% 53% 52% 45% 45%60% 56%

81%

58% 61%51% 53% 48% 44% 41%

59% 58%

81%60% 61%

Arvind Vardhman WelspunIndia

Trident Raymond KPR Mill RSWM Filatex Sutlej NaharSpinning

Q1 FY19

Q1 FY20

Raw Material Cost - % of Sales

12%8% 9%

13%18%

10%13%

2%

13%9%

12%9% 9%

11%

17%13% 13%

2%

13%11%



Q1 FY19

Q1 FY20

Employee Cost - % of Sales

Other Costs - % of Sales

30%22% 21% 24%

36%

11%24%

9%22% 20%

28% 24% 19% 22%

40%

11%24%

9%20% 21%



Q1 FY19

Q1 FY20

Source: Money Control

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Consolidated Analysis for the Selected Top Players

9,694

10,107

Q1 FY19 Q1 FY20

4%

Consolidated Sales – Rs. Crore

On consolidated level, sales have increased by

4% in Q1 FY20 as compared to Q1 FY19.

Average EBITDA %

12.8%

13.2%

Q1 FY19 Q1 FY20

0.4 p.p*Consolidated EBITDA

margin increased marginally by 0.4

percentage points for the selected top companies.

* Percentage PointsSource: Money Control

Average RM Cost - % of Sales

54.0%53.7%

Q1 FY19 Q1 FY20

10.5%10.8%

Q1 FY19 Q1 FY20

Average Employee Cost - % of Sales

22.7%22.3%

Q1 FY19 Q1 FY20

Average Other Expenses - % of Sales

Average RM cost decreased marginally by 0.3 percentage

points in Q1 FY20 as compared to Q1 FY19.

Average employee cost increased by 0.3 percentage points in Q1 FY20 as compared to Q1 FY19.

Other expenses decreased by 0.4 percentage points in Q1 FY20 as

compared to Q1 FY19.

Market Update

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Key Economic Indicators

100

120

140

160

180

200

Textiles Apparel

100

110

120

130

140

Textiles Apparel

34.14

35.85

Q1 FY19 Q1 FY20

Index of Industrial Production (IIP*)

Wholesale Price Index (WPI*)

India’s GDP (at constant prices)Average IIP for

apparel increased significantly by 13%

in Q1 FY20 as compared to Q1

FY19, while that of textiles showed a

marginal increase of 1%.

Average WPI for textiles increased by

4% in Q1 FY20 as compared to Q1

FY19, while that of apparel decreased

by 1%.

Source: Reserve Bank of India, Economic Advisor, Govt. of India * Base Year 2011-12

5%

India’s real GDP has grown by 5% in Q1 FY20 as compared

to Q1 FY19.

Rs Lakh Cr

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India’s overall T&A* Exports

Category Q1 FY19 Q1 FY20 % change

Fibre 857 381 -56%

Filament 352 299 -15%

Yarn 1,298 886 -32%

Fabric 1,147 1,189 4%

Apparel 4,050 4,172 3%

Home Textile

1,294 1,327 3%

Others 491 449 -9%

Total 9,488 8,703 -8%

India’s Textile & Apparel Exports (Values in US$ Million)

27%

24%7%

5%3%

34%

EU-28 USA UAE Bangladesh China & HK Others

26%

21%7%6%

6%

34%

India’s Top T&A Markets

• India’s exports of textile & apparel commodities have shown a decline of 8% in Q1 FY20 as compared to Q1 FY19.The exports of fibre and yarn have shown a significant decline of 56% and 32%, respectively. This is majorly due tothe decline in exports to China (exports of fibre and yarn reduced by US$ 110 million and US$ 327 million,respectively)

• Fabric exports showed a growth of 4%; exports of apparel and home textiles witnessed a growth of 3% each.• EU and USA are the largest markets for India’s T&A commodities. The share of these two markets have increased

by 1% and 3%, respectively. However, the share of China has declined by 3%.

% Value Share

Q1 FY19

Q1 FY20

Source: DGCI&S * Textile & Apparel

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India’s overall T&A* Imports

Category Q1 FY19 Q1 FY20 % change

Fibre 503 579 15%

Filament 167 197 18%

Yarn 114 112 -2%

Fabric 662 618 -7%

Apparel 196 232 18%

Home Textile

58 63 8%

Others 171 185 8%

Total 1,871 1,985 6%

India’s Textile & Apparel Imports (Values in US$ Million)

38%

10%10%

7%

4%

31%

China & HK EU-28 USA Bangladesh Vietnam Others

36%

10%12%

6%4%

32%

India’s Top T&A Suppliers

• India’s imports of textile & apparel commodities grew by 6% in Q1 FY20 as compared to Q1 FY19.• The categories of filament and apparel experienced the highest growth of 18% in Q1 FY20 over Q1 FY19.• Imports of fabric and yarn showed a decline of 7% and 2%, respectively during the same period.• China & HK is the largest supplier to India for textile & apparel commodities and its share has increased by 2% in

Q1 FY20 as compared to Q1 FY19.

% Value Share

Q1 FY19

Q1 FY20

Source: DGCI&S * Textile & Apparel

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T&A imports of USA increased by 4%, while that of EU showed a minor decline

25.7

8.6

3.1 1.9 1.4 1.2 1.2 0.71 0.6 0.4 0.2

26.8

8.5

3.4 2.1 1.6 1.2 1.2 0.75 0.7 0.3 0.3

World China Vietnam India Bangladesh Indonesia Mexico Pakistan Cambodia Canada South Korea

Q1 FY19 Q1 FY20

Overall Imports and Top Import Countries of USA

Overall Imports and Top Import Countries of EU-28

30.2

8.0 4.8 4.2

2.5 1.5 0.9 0.9 0.9 0.7 0.5

30.0

8.2 4.9 4.0

2.3 1.5 1.0 0.9 0.9 0.6 0.5

World China Bangladesh Turkey India Pakistan Vietnam Cambodia Morocco Tunisia USA

Q1 FY19 Q1 FY20

4%

in US$ Billion

in US$ Billion

-1%

10% 7% 12% 6% 22% -13%2%

-0.5%

2%

3% -6% 2% 10% -1% -3% -8%

Source: OTEXA, Eurostat • EU-28 data excludes intra EU trade 1 USD = 0.84 Euro (Q1 FY19)1 USD = 0.89 Euro (Q1 FY20)

7%

-4%

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Average raw material prices have increased

60 80

100 120 140 160 180 200 220

Ap

r'17

May

'17

Jun

e'17

July

'17

Au

g'1

7

Sep

'17

Oct

'17

No

v'17

Dec

'17

Jan

'18

Feb

'18

Mar

'18

Ap

r'18

May

'18

Jun

'18

July

'18

Au

g' 1

8

Sep

'18

Oct

'18

No

v'18

Dec

'18

Jan

'19

Feb

'19

Mar

'19

Mar

'19

Ap

r'19

Raw Cotton VSF PSF

150 160 170 180 190 200 210 220 230 240

Ap

r'17

May

'17

Jun

e'17

July

'17

Au

g'17

Sep

'17

Oct

'17

No

v'17

Dec

'17

Jan

'18

Feb

'18

Mar

'18

Ap

r'18

May

'18

Jun

'18

July

'18

Au

g'18

Sep

'18

Oct

'18

No

v'18

Dec

'18

Jan

'19

Feb

'19

Mar

'19

Ap

r'1

9

Cotton Yarn PV Yarn PC Yarn

Fibre Prices Rs./kg

Yarn Prices Rs./kg

Source: Ministry of Textiles

Average price change in Jan-Apr 2019 as compared toJan-Apr 2018:• 8% increase in raw cotton• 8% decrease in VSF• 7% increase in PSF

Average price change in Jan-Apr 2019 as compared toJan-Apr 2018:• 10% increase in cotton

yarn• 4% increase in PV yarn• 4% increase in PC yarn

Annexure: Wazir Textile Index (WTI) -Explanation

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Measuring Financial Performance of Indian Textile Sector

• Wazir Textile Index has been developed for assessing the overall financial performance of the textile sector on acontinuous basis.

• This index takes the collective performance of top ten textile companies (by sales) of 2015-16 as thebase/benchmark which is represented by the base Index number 100.

• Base value of 100 is assigned separately to each quarter performance and full year performance in 2015-16, andcorrespondingly financial performance of the textile industry is benchmarked to this base number to assessquarterly (Q1), half yearly (H1), nine monthly (9M) and yearly performance (FY) for subsequent years against theset benchmark.

• Overall textile index includes the following three components:

• WTI Sales : Consolidated sales index of top ten companies

• WTI EBITDA : Consolidated EBITDA index

• WTI Cost : Consolidated index for cost of Raw material, employee & others

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Glossary

• EBITDA – Earnings Before Interest Tax Depreciation & Amortization

• EU – European Union

• FY – Financial Year

• FY16 – April 2015 to March 2016





• GDP – Gross Domestic Product

• Q1 FY19 – April 2019 to June 2019

• Q1 FY20 – April 2010 to June 2020

• PV – Polyester Viscose

• PC – Polyester Cotton

• PSF – Polyester Staple Fibre

• RM – Raw Material

• T&A – Textile & Apparel

• USA – United States of America

• UK – United Kingdom

• VSF – Viscose Staple Fibre

• WTI – Wazir Textile Index

• YOY – Year on Year

• YTD – Year till date

CONTACT

Wazir Advisors Pvt. Ltd3rd Floor , Building #115, Sector 44, Gurgaon - 122 002 Haryana- IndiaTel : +91 124 4590 300

Prashant Agarwal

[email protected]+91 9871195008

Sanjay Arora


Varun Vaid


B. Prakash


Website: www.wazir.in

Linkedin.com/in/WazirAdvisors

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Facebook.com/WazirAdvisors

http://www.wazir.in/

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