Wazir Textile Index
Sep 2018
Quarterly Report : Q1 FY 2018-19 Textile Sector Performance Update
2
• Wazir Textile Index – Q1 FY19
• Quarterly Financial Performance – Q1 FY19
• Market Update
• Key Economic Indicators
• Export – Import Trend
• Raw Material Price Trend
• Annexure: Wazir Textile Index – Explanation
Contents
Wazir Textile Index (WTI) – Q1 FY19
4
S. No. Company Name Annual Sales* - FY18 (Rs Cr)
1 Arvind 6,420
2 Vardhman 5,851
3 Welspun India 4,977
4 SRF 4,582
5 Trident 4,564
6 Raymond 3,012
7 RSWM 2,940
8 KPR Mills 2,512
9 Sutlej Industries 2,462
10 Indo Rama Synthetics 2,256
List of Companies included as part of financial analysis
Top listed textile companies in terms of sales turnover in FY18 have been included for financial analysis
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
Source: Moneycontrol * Sales constitutes total operating income, standalone financials have been considered for analysis
5
Wazir Textile Index (WTI) – Q1 FY19
WTI Sales WTI EBITDA
100110.5 113.9 119.8
Base year(Q1 FY16)
Q1 FY17 Q1 FY18 Q1 FY19
100106.2
81.088.9
Base year(Q1 FY16)
Q1 FY17 Q1 FY18 Q1 FY19
100 100 100 112.0 119.5 107.2123.1 132.5
113.3128.9 137.5118.1
RM Cost Employee Cost Other Cost
WTI Cost
Base year (Q1 FY16) Q1 FY17 Q1 FY18 Q1 FY19
• In Q1 FY19, overall sales increased by 5%, as compared to Q1 FY18
• EBIDTA levels have rebounded and increased by 10% in Q1 FY19 compared to Q1 FY18
• Raw material and employee costs have continued to increase
Quarterly Financial Performance – Q1 FY19
7
Overall Revenue and EBIDTA margin revived slightly in Q1 FY19
1,6131,480 1,310
1,037 1,168
595 706556
652 593
1,671 1,581
1,329 1,4461,131
609710
761 615
356
Arvind Vardhman WelspunIndia
SRF Trident Raymond RSWM KPR Mills SutlejIndustries
Indo RamaSynthetics
Quarterly Sales* Trend – Q1 FY19 (Rs Cr.)
4% 39%1%7% -3% 2% 1% 37% -6% -40%
11%14%
18% 17% 20%
0.2%6%
18%11%
3%
11%17% 18% 18% 17%
0.4%
8%
18%
8%
-1%Arvind Vardhman Welspun
IndiaSRF Trident Raymond RSWM KPR Mills Sutlej
IndustriesIndo RamaSynthetics
Quarterly EBITDA Margin Trend – Q1 FY19
Q1 FY18 Q1 FY19
• Sales of top companies have revived slightly in first quarter of FY 2018-19.• SRF has shown the highest sales growth of 39% in Q1 FY19, while Indo Rama Synthetics witnessed
the highest decline, falling 40% over the same period.• Except Trident, Sutlej Textiles and Indo Rama Synthetics, EBITDA margins of all other top companies
have increased in Q1 FY19.
Source: Moneycontrol * Sales and EBITDA are as per operating performance of companies
8
Quarterly Analysis -Major expenses as % of sales
44% 55% 50% 54% 47% 44% 57% 62% 58%77%
47% 53% 52% 55% 45% 45% 56% 60% 58%77%
Arvind Vardhman WelspunIndia
SRF Trident Raymond RSWM KPR Mills SutlejIndustries
Indo RamaSynthetics
Raw Material Cost – % of sales
13%8% 9% 9%
13%17%
13%10% 11%
4%
12%8% 9% 7%
13%18%
13% 10% 13%
5%
Arvind Vardhman WelspunIndia
SRF Trident Raymond RSWM KPR Mills SutlejIndustries
Indo RamaSynthetics
Employee Cost – % of sales
32% 23% 22% 20% 20%39%
24%11%
20% 16%30% 22% 21% 20% 24%
36%24%
11%22% 18%
Arvind Vardhman WelspunIndia
SRF Trident Raymond RSWM KPR Mills SutlejIndustries
Indo RamaSynthetics
Other Costs – % of sales
Q1-FY18 Q1-FY19
Source: Moneycontrol
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Consolidated analysis for the selected top players
9,710
10,209
Q1 FY18 Q1 FY19
Consolidated Sales – Rs. Cr On consolidated level, Sales have increased by 5% in Q1 FY19 as
compared to Q1 FY18
Consolidated EBITDA margin increased marginally by 0.6 percentage points for the selected top companies
13.1%
13.6%
Q1 FY18 Q1 FY19
Average EBITDA %
Average RM cost declined marginally as
compared to first quarter of previous year
Average employee cost remained almost
stagnant
Other expenses also declined marginally
52.8%
52.6%
Q1 FY18 Q1 FY19
Average RM Cost - % of Sales
10.6%
10.5%
Q1 FY18 Q1 FY19
Average Employee Cost -% of Sales
Source: Moneycontrol * Percentage Points
5%0.6 pp*
23.5%
23.3%
Q1 FY18 Q1 FY19
Average Other Expenses -% of Sales
Market Update
11
Key Economic Indicators
Average IIP for textiles has declined by 0.4% while average IIP for
apparel has declined by 5% in Q1 FY19 compared to Q1 FY18, although it is
on an upward trend
100105110115120
Wholesale price index (WPI*)
Textiles
Average WPI for textiles has increased slightly by 1% in Q1 FY19 compared
to Q1 FY18
India’s real GDP has grown by 8.2% in Q1 FY19
compared to Q1 FY18
31.18 33.74
Q1 FY18 Q1 FY19
India’s GDP (at constant prices*)8.2%
Growth
100.0
120.0
140.0
160.0
180.0
200.0
Index of Industrial Production (IIP*)
Textiles Apparel
Rs. Lakh Cr.
Source: RBI, Economic Advisor Govt. of India *Base Year 2011-12
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India’s overall T&A* exports have declined by 1% in Q1 FY19, Apparel exports declined heavily by 17%
However, Fibre, Filament and Yarn exports witnessed significant increase
India’s Textile and Apparel Exports (In US$ mn.)
• Export of all the categories except apparel and fabric have grown in Q1 FY19 as compared to Q1FY18. Overall T&A exports declined by 1% in first quarter of FY 2018-19.
• Apparel exports saw a decline of 17% this quarter. Decline in apparel exports is largely attributed tosubdued global demand as well as reduced competitiveness of Indian apparel exporters post GST,due to reduction in duty drawback.
• Cotton yarn exports increased significantly by 54%.• USA , UAE, China and UK remains the top export destinations for India’s T&A products.
Source: DGCI&S *T&A – Textile & Apparel
21%
7%
6%
6%
6%
54%
USA
UAE
China
UK
Bangladesh
Others
20%
15%2%
6%6%
50%
India’s T&A Top Export Markets
% Value Share
Q1 FY18
Q1 FY19
Categories Q1 FY18 Q1 FY19 % change
Apparel 4,906 4,050 -17%
Yarn 879 1,297 48%
Home Textiles 1,280 1,294 1%
Fabric 1,148 1,145 0%
Fibre 632 854 35%
Filament 270 352 30%
Others 438 491 12%
Total 9,553 9,481 -1%
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India’s T&A* imports have increased by 5% in Q1 FY19.
India’s Textile and Apparel Imports (In US$ mn.)
• Import of all categories except Fibre and Home Textiles have increased in Q1 FY19.• Apparel imports increased sharply by 40%, primarily due to impact of reduced effective import
duties post GST for imports from countries like Bangladesh, China.• China continues to be the largest import partner for India, however imports from China declined by
10% y-o-y.• Egypt emerged as a significant supplier of T&A products in Q1FY 2018-19 , accounting for 5% share.
Source: DGCI&S *T&A – Textile & Apparel
34%
11%6%5%
4%
39%China
USA
Bangladesh
Egypt
Vietnam
Others
40%
13%4%3%
39%
India’s T&A Top Import Markets
% Value Share
Q1 FY18
Q1 FY19
Apparel imports increased significantly by 40% in Q1 FY19
Categories Q1 FY18 Q1 FY19 % change
Fabric 603 661 10%
Fibre 583 502 -14%
Filament 156 167 7%
Apparel 140 196 40%
Yarn 101 114 14%
Home Textiles 59 58 -2%
Others 139 171 23%
Total 1,781 1,869 5%
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T&A imports of USA and EU has increased in FY19 till date
51.1
15.6
7.6 6.8 4.1 2.5 1.5 1.5 1.4 1.1 0.8
53.1
15.4
8.2 7.3 4.2 2.5 1.7 1.6 1.5 1.2 0.8
World China Bangladesh Turkey India Pakistan Cambodia Vietnam Morocco Tunisia USA
FY18 (Jan-May) FY19 (Jan-May)
7.4%
-1.5%
3.4%2.8%
Overall Imports and Top import Countries of EU-28*
6.8%8.5% 6.1% 4.9% 10.3% -1.6%
3.9%
in US$ Bn
49.4
…
5.7 3.9 2.7 2.4
2.3 1.4 1.2
1.0 0.8
51.5
17.3
6.1 3.9 2.8
2.4 2.3 1.4 1.2
1.2 0.9
World China Vietnam India Bangladesh Indonesia Mexico Pakistan Honduras Cambodia Italy
FY18 (Jan-Jun) FY19 (Jan-Jun)
7.5%
2.9%
4.7%1%
Overall Imports and Top import Countries of USA
-2% 0.7% 3.8% -0.4% 17% 18.4%
4.2%
in US$ Bn
Source: OTEXA, EUROSTAT * EU-28 data excludes intra EU trade
16.8
15
Average raw material prices increased in Q1 FY19 compared to Q1 FY18
150160170180190200210220230240250
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Yarn Prices Rs./Kg
Cotton Yarn PV Yarn PC Yarn
Average price change in Q1 FY19 as compared to Q1 FY18• 4% increase in cotton
yarn • 6% increase in PV yarn• 5% increase in PC yarn
6080
100120140160180200220
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Fibre Prices Rs./Kg
Raw Cotton VSF PSF
Average price change inQ1 FY19 as compared toQ1 FY18• 2% increase in raw
cotton• 7% increase in VSF• 26% increase in PSF
Source: Ministry of Textiles
Annexure:
Wazir Textile Index (WTI) -Explanation
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• Wazir Textile Index has been developed for assessing the overall financial performance of the textile sector on a continuous basis.
• This index takes the collective performance of top ten textile companies (by sales) of 2015-16 as the base/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, and correspondingly financial performance of the textile industry is benchmarked to this base number to assess quarterly (Q1), half yearly (H1), nine monthly (9M) and yearly performance (FY) for future years against the set 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
Measuring financial performance of Indian Textile Sector
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• EBITDA – Earnings Before Interest Tax Depreciation & Amortization
• EU – European Union
• FY – Financial Year
• Q1 FY19 – April 2018 to June 2018
• Q1 FY18 – April 2017 to June 2017
• GDP – Gross Domestic Product
• PV – Polyester Viscose
• PC – Polyester Cotton
• PSF – Polyester Staple Fibre
• RM – Raw Material
• T&A – Textile & Apparel
• US – United States of America
• UK – United Kingdom
• VSF – Viscose Staple Fibre
• WTI – Wazir Textile Index
• YOY – Year on Year
Glossary
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