Stock Market sniffs textile gains amid Bangladesh upheavals
Image credit X.com @WelspunWorld
Textile stocks in focus amid Bangladesh upheavals
By S Jha
New Delhi, September 19: Bangladesh continues to battle social and industrial disruptions in the wake of the ouster of the Shiekh Hasina-led administration over a month ago. The Indian equity markets on Thursday witnessed investors taking keen interests in textile opportunities for India.
KPR Mills led the charge on the street on Thursday. KPR Mills shares were sharply higher by over nine per cent.
Garware Technical Fibres gained more than seven per cent on Thursday. Gokaldas Exports also gained almost five per cent.
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The textile sector had almost been on snooze mode for several months. The shares of the textile sector companies made modest gains in the recent months.
Bangladesh had accounted for exports of $54 billion last year for clothes. The textile sector accounts for almost 10 per cent of the GDP of Bangladesh.
Bangladesh trails behind China in the size of the textile exports. A sizable population of Bangladesh is engaged in the garments industries.
Even before Hasina was ousted of power, the textile industries had been witnessing disruptions in Bangladesh. Factories faced protests from workers. Arsons and violence had widely been reported.
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The western commentators are now wondering if India can replace Bangladesh as the export hub of ready-made garments. Bangladesh continues to be in turmoil amid raging violence.
India had exported $34.4 billion worth of textile, including ready-made garments, in 2023. India had witnessed a 3.4 per cent dip in exports of textiles in 2023.
But India has set an ambitious target of achieving exports in textile worth $100 billion by 2030. Traditionally, Gujarat and Tamil Nadi are leading textile hubs.
But lately, a few new centres of garments manufacturing are emerging in other states such as Uttar Pradesh and Bihar. A long New York Times report recently documented emergence of garments manufacturing centres in Greater Noida and Muzaffarnagar in Uttar Pradesh.
Listed textile firms include Welspun, TCNS Clothing, Go Fashion, Jindal Worldwide, Raymond, Jindal Poly Film, and others. During the pandemic, the China exports of textile were adversely affected.
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Indian listed textile firms had been trending in stock market until China fully reopened. Analysts claim that similar opportunities could be knocking India’s door if Bangladesh upheavals prolong.
However, the western commentators such as The Economic are sceptical of India gaining at the expense of Bangladesh. They count several reasons, including lack of manufacturing base on scale of China and Bangladesh.
Disclaimer: This article makes no recommendation for buy or sell of shares of any company.
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