According to ICRA, Indian home textile exporters are set to register robust performance during FY2022, thanks to pandemic-induced lifestyle changes stemming from heightened consciousness about hygiene and increased prevalence of stay-at-home options. These factors have driven a sharp surge in demand for home improvement products over the past one year, and the demand momentum is expected to sustain during Q2 to Q4 FY2022, continuing on the trend of the past three quarters.
ICRA’s sample set of companies are projected to clock a robust double-digit growth of 20 to 25 per cent in FY2022. This follows a subdued 5 per cent growth in revenues reported by the sample in FY2021, primarily due to 40 per cent year-on-year dent in performance in Q1 FY2021.
Home textile exports was one of the first few textile segments to recover from the impact of pandemic last fiscal with companies reverting to year-on-year growth from Q2 FY2021 itself and reporting three consecutive quarters of double-digit growth thereafter.
The export demand has been mainly driven by the United States, the largest market, accounting for 60 per cent of India’s home textile exports.
Compared to a 9 per cent increase in India’s home textile product exports of 5.7 billion dollars in FY2021, exports to the US increased by 14 per cent while exports to the other major markets of the United Kingdom and the European Union reported a decline.
Besides faster opening up, increase in exports to the United States is partly attributable to the distribution model for these products with a meaningful share accounted for by the large departmental chains that remained open even during the lockdown phase.
Moreover, expectations of a strong festive demand this year backed by favourable vaccination coverage across key markets is reflected in the healthy order book position of Indian home textile exporters.
Further, ICRA’s channel checks suggest that the larger exporters have robust order backlog and are likely to rely more on job-work and outsourcing to fulfil delivery commitments over the next few quarters.