Foreign investors prefer our textile industry due to its adaptability. Additionally, after agriculture, the Indian textile industry is the largest recruiter and employs approximately 4.5 billion people across India. Today the industry is worth about 2% of India’s GDP and 11.4% of exports.
With an expected growth of 2.5x in the coming 5 to 10 years, the Indian textile industry is considered the perfect “plus one” destination by foreign investors.
Why is it a good idea to invest in textile stocks in India?
During the pandemic, textile stocks saw a temporary downfall due to lockdown regulations. However, after that, textile stocks skyrocketed.
Here is a list of reasons why investing in textile stocks is so prevalent in India:
- The sector produces around 1/4th of the world’s cotton
- Additionally, the labor cost is relatively low, thereby increasing domestic demand for employees.
- There has been a significant increase in the export of textile products to other countries. This contributes to approximately 1/3rd of the total export revenue.
- New government regulations have greatly improved the ease of doing business in the country.
Essential Points to Consider before Investing in a Textile Stock
If you are planning to invest in an Indian textile stock, then you must consider these factors:
- Consistency in profit
Choose high-value stocks that help you earn better profits, even when the shares are fewer in number.
- SEBI Governance
You should always deal with the SEBI-registered stock broker for all stock and other investment purposes. They are trustworthy and have enough experience in the market.
- Long term investments
Always consider long-term investments with an excellent price-to-earning ratio, as they are profitable.
Top Textiles Stocks in India
1. Vardhman Textiles
Vardhman Textiles is well known globally for manufacturing fabric, acrylic fabric, yarn, and clothing. The company also produces colored yarns, specialty yarns, acrylic fancy, and hand-knitting products. Some popular clients they serve are Tommy Hilfiger, Walmart, and Calvin Klein.
The enterprise value (EV) of this fabric-producing company is approximately INR 9968 crore. Vardhman Textiles’ profit has increased from INR 410 crores to INR 1547 crores this year. The stock prices have grown by about 89.27% in the last three years.
2. Trident
Trident Ltd. was founded in 1990 and is the main producer of yarn and bed linen. Additionally, the company also develops Captive Powder and Wheat straw-based paper. It is also the largest manufacturer of terry towels in the world.
Trident Ltd is worth 17697 crores, and its profit skyrocketed this year from INR 304 crores to INR 834 crores.
3. Lux Industries
We all have heard about the Lux industry, right? The company was established in 1957 and had been operating in the Indian textile market since then. It carries various brands like Lux Cozi, One8, Lyra ONN, etc.
The company’s revenue has soared from INR 1077 crore in 2018 to INR 1953 crore in 2021. Lux Industries Ltd also has a low debt-to-equity ratio of 0.13.
4. Raymond
This is a big organization that deals in the textile and apparel industries. Raymond also has other types of businesses in different sectors, like engineering, realty, consumer care, and denim. The company is the fourth largest textile company in India.
Currently, the company’s market cap is approximately INR 7316 crores; this year, it has made profits of around INR 260 crores. Textile stock prices have witnessed a massive growth of approximately 142% in the past 12 months, and they continue to grow.
5. Welspun India
It is one of the most popular domestic textile manufacturers in India. The company produces numerous products like bathroom robes, beds, carpets, towels, bed sheets, etc. Welspun India Ltd earns most of its revenue from exports, accounting for approximately 84% of the company’s revenue.
This textile manufacturer is worth INR 13,363 crores and has a meager debt-to-equity ratio of 0.78.
6. Kewal Kiran Clothing
Established in 1981, Kewal Kiran Clothing is one of the largest apparel manufacturers in India. The company produces market-branded jeans and semi and casual wear for men and has networks across Asia and the Middle East. Popular brands that partner with the company are Killer, Integriti, K-Lounge, and Lawman.
The company’s market price changes according to market conditions, and the latest closing price of Kewal Kiran Clothing was 484.4. Over the last year, the share price has gone up 113.2%.
7. KPR Mill
KPR Mill, one of the biggest players in the Indian textile industry, was incorporated in 1984. The textile company mainly produces readymade garments, yarn, and knitted fabric. Since 2021 KPR has been awarding all its shareholders massive returns of approximately 250%.
8. Jindal Worldwide
This Indian textile company is worth INR 5284 crore, and in 2022, it made a profit of INR 109 crore. The stock price of Jindal Worldwide Ltd has increased by a huge percentage of 89.93 in the last 12 months.
9. Go Fashion (India)
This is an Indian-based clothing apparel company worth approximately INR 7295 crore. In 2022, Go Fashion (India) Ltd made INR 35.60 crore profit, and the stock price has increased since March 2022 to 56.78%.
10. Monte Carlo Fashions Ltd
Monte Carlo Fashions Ltd was established in 2008 in Ludhiana, Punjab. The company manufactures cotton, woolen products, blended yard, and woven denim fabric. The latest closing price was 694.5.
Conclusion
The Indian textile business is booming and is currently one of the most lucrative investment options. However, if you plan to invest in textile stocks in India, make sure that you are aware of cyclical pricing swings that might affect the stock prices. To get a better grasp of the stock market industry, stay tuned to MoneyIsle!
