Textile companies share price movement
Shares of textile companies S P Apparels (SPAL) and Arvind rallied up to 13 per cent, hitting respective 52-week highs on the BSE in Tuesday’s intra-day trade on improved business outlook. The proposed UK and EU free trade agreements (FTAs) are expected to improve the competitiveness of Indian textile exports.
Meanwhile, Gokaldas Exports, PDS, Vardhman Textiles and Nitin Spinners were up in the range of 2 per cent to 3 per cent. In comparison, the BSE Sensex was up 0.05 per cent at 76,763 at 11:32 AM.
What’s driving textile stocks?
SPAL is the preferred vendor for knitted garments for infants and children to reputed international brands and retailers. Young Brand Apparels offers innerwear and outerwear for men, women and kids. It specializes in intimate wear.
SPAL in the Q4 earnings conference call said the company’s current order book for all the divisions is approximately ₹600 crore. As the company enters FY27, the key message from the management is that the temporary disruption phase is behind and they are seeing normalization in customer engagement. The company said it is increasing focus on the US market with ongoing discussions with 3-4 large customers. The rationale is clear higher order sizes, better realizations and strategic importance for scale.
The management further said that the company continues to work towards its ₹2,000 crore top-line ambitions. As the business normalizes and operating leverage improves, the management also expects the core government export business to sustain an adjusted EBITDA margin in the range of 17 per cent-18 per cent.
Meanwhile, looking ahead, the management of Indo Count Industries believes demand visibility will improve gradually as the tariff overhang eases further, supported by the proposed US trade agreement and other FTAs.
Indo Count believes FY27 will be a defining year for the company, not only in terms of stronger profitability, but also with meaningful improvement in volumes and margins. The management expects volumes to be in the range of 105 million to 110 million meters compared to 94 million meters achieved in FY26. On the margin front, the company said it is targeting EBITDA margin of around 13 per cent, driven by disciplined execution, improving demand conditions, normalization of US trade environment and revenue diversification opportunities arriving from a more level playing field in markets such as the UK and the EU, supported by long-standing customer relationships.
Motilal Oswal Financial Services view on textile sector
Going forward, export growth is expected to recover, supported by upcoming FTAs with the UK and EU, favourable tariff realignments, and improving incentives such as RoSCTL (Rebate of State and Central Taxes and Levies).
The Government of India (GOI) has set an ambitious target to scale the textile market to $350 billion from $194 billion in FY26, implying a compound annual growth rate (CAGR) of 13 per cent, driven by strong export growth (22 per cent CAGR) and steady domestic demand (10 per cent).
With India accounting for only 4–5 per cent of global apparel trade, substantial market share opportunities remain as global brands diversify sourcing beyond China and increasingly prefer large-scale, compliant suppliers and consolidation with suppliers with lower audit complexity, benefiting major Indian textile exporters. ============================================ Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.