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Major textile hubs be impacted with second wave of Covid-19: Ind-Ra

Covid-19 is affecting many countries, including major textile hubs such as Tirupur, Ludhiana, Surat, and Bhilwara, in the ongoing lockdown. The non-availability of inputs like yarn and fabric will likely have a short-term effect on the finished output.

India Ratings and Research (Ind-Ra) — India’s most respected credit rating agency committed to providing India’s credit markets accurate, timely and prospective credit opinion—Ind-Ra recently said.

The agency further noted that “Labour availability has had little effect on moderation and intensity since the first wave period. The shop floor is likely to be functional at a few plant sites but has a limited occupancy stage.” However, they thank to strong export markets 1QFY22 cannot be a losing quarter.

Figure: Covid-19 is affecting many countries, including major textile hubs

“Since the second wave hit us in April-May, there will be a substantial list of most cotton textile players. Besides new searches are available from November to March,” Said Ind-Ra.

Nevertheless, this supply chain disruption could lead to a 20-30 percent YoY decline in the tops in Q1FY22.

“Again, recovery expectations vary depending on the sub-sector. Export-focused garments and home textiles are likely to remain resilient compared to the spinning and fabric segment.”

“Export Order Book with Garment Players is expected to be higher by the end of March 2021. But the 1QFY21 shipment is likely to lag behind at 2QFY22. Holder availability Challenges to higher shipping costs have been affecting profits since 3QFY21 and are likely to remain in the near future.”

For example, outside of 1QFY22, Ind-Ra has captured demand recovery in sub-divisions, retail, office, educational, social work in 2HFY22. The balance sheet of the family managed by expressing the demand for paint-up through resistance by the moderate week as soon as social work begins.

“Growth rates will also benefit from lower base effects. Ind-Ra hopes that export demand will remain favorable with geopolitical tensions and China, plus one story continuing. This is because demand in export markets continues to recover. Also accounting for at least 30% of India’s total textile production.”

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