Garments, textile export companies hit slump season

Owing to high cotton inventory and

slump in the overseas markets due to slowdown, major textile and clothing (T&C) companies like Arvind, Alok, Raymond, Century and Gokaldas Exports have witnessed their bottomlines take a hit in varying

degree for the first quarter of fiscal 2012-13 on a year-on-year basis. While Arvind suffered due to labour agitation, Gokaldas Exports faced increased competition in overseas markets from neighbouring countries. A look at just the net profits/losses of some of the major T&C firms shows either a dip in the former or a growth in the latter.

For instance, companies like Arvind, Alok Industries and Century Textiles have seen their net profit for Q1 of FY 2012-13 declined by 31.46, 49 and 90 per cent, respectively. On the other hand, Raymond and Gokaldas Exports registered an increase in their net losses by 442 and 75 per cent, respectively. According to industry experts, while for T&C firms that primarily manufacture garments or have apparels as one of the major integrated operations has lost substantially in competitiveness in the overseas markets.

“Not only has the domestic market been dull since last couple of months due to poor market sentiments, even the overseas market has become tougher in terms of competition from Vietnam and Bangladesh that sell at much more competitive prices. Add to that fabric prices and power costs have also risen pretty high for garment makers in India," said DK Nair, Secretary General of Confederation of Indian Textile Industry (CITI).

Raymond’s textile segment saw a net loss of Rs 8.62 crores for the quarter ended June 30, 2012 as against a net profit of Rs 24.13 crores for the corresponding period last year. In the ‘garment’ segment, Raymond posted a dip of 55 per cent in net profits for the same period. In case of integrated textile and branded apparel maker Arvind, almost a month long strike at its denim fabric manufacturing plant at Naroda in Ahmedabad took a toll on its net profit for the first quarter of fiscal 2012-13. The company posted a 48 per cent dip in its net profit at Rs 32 crores, down from Rs 61 crores for the corresponding quarter in previous fiscal 2011-12.