wazir textile index textile index report - q1 fy20...start 5 wazir textile index (wti) –q1 fy20...
TRANSCRIPT
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%
Arvind Vardhman WelspunIndia
Trident Raymond KPR Mill RSWM Filatex Sutlej NaharSpinning
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%
Arvind Vardhman WelspunIndia
Trident Raymond KPR Mill RSWM Filatex Sutlej NaharSpinning
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
• FY17 – April 2016 to March 2017
• FY18 – April 2017 to March 2018
• FY19 – April 2018 to March 2019
• FY20 – April 2019 to March 2020
• 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
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