Textile Sector Performance Update
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Transcript of Textile Sector Performance Update
Textile Sector Performance Update Nine Monthly Report : 2016-17
March 2017
2
Financial Performance Update
• Quarterly Financial Performance – Q3 FY17
• Nine Monthly Financial Performance – 9M FY17
Market Update
• Key Economic Indicators
• Export – Import Trend
• Raw Material Price Trend
Contents
Financial Performance Update
4
List of companies included as part of financial analysis
S.No Company NameAnnual Sales - FY16
(Rs Cr)
1 Vardhman Textiles 5,814
2 Arvind 5,514
3 Welspun India 4,962
4 Trident 3,715
5 JBF Industries 3,704
6 SRF 3,683
7 RSWM 2,979
8 Raymond 2,911
9 Indo Rama Synthetics (India) 2,567
10 Sutlej Industries 2,302
Top listed textile companies in terms of sales turnover in FY16 have been included for financial analysis
Note: Companies that have shown significant negative deviation in numbers or those which have not yet reported the financialshave not been included in the overall analysis
Source: Company Annual Reports
Quarterly Financial Performance – Q3 FY17
6
Overall revenue has increased while EBIDTA margin has declined in Q3-FY17
• Welspun has shown the highest revenue growth rate of 25% while that of Raymond and RSWM declined by 9% and 7%, respectively.
• Except Vardhman & Trident, all the companies have shown decline in EBIDTA margin.
20%15%
24%19%
10%
22%
12% 11%4%
12%
24%
13%
22% 20%
6%
21%
9%4%
-3%
12%
Vardhman Arvind WelspunIndia
Trident JBF Industries SRF RSWM Raymond Indo RamaSynthetics
SutlejIndustries
Quarterly EBIDTA Margin Trend – Q3 FY17
Q3-FY16 Q3-FY17
1,445 1,331 1,233898 897 860 756 776 603 552
1,454 1,464 1,3211,126 963 908 703 705 572 540
Vardhman Arvind WelspunIndia
Trident JBF Industries SRF RSWM Raymond Indo RamaSynthetics
SutlejIndustries
Quarterly Revenue Trend – Q3 FY17 (Rs Cr.)1% 25%7%10% 7% 6% -7% -9% -5% -2%
Source: Moneycontrol
Growth %
7
49% 39% 46% 48%75%
50% 56%42%
78%58%
44% 41% 47% 48%
79%
47% 56%41%
81%56%
Vardhman Arvind WelspunIndia
Trident JBFIndustries
SRF RSWM Raymond Indo RamaSynthetics
SutlejIndustries
Raw Material Cost– % of sales
Quarterly Analysis – Major expenses as % of sales
8%12%
9%12%
2%
9%11% 11%
4%
11%8%
14%9%
13%
2%
9%13% 14%
5%
12%
Vardhman Arvind WelspunIndia
Trident JBFIndustries
SRF RSWM Raymond Indo RamaSynthetics
SutlejIndustries
Man Power Cost– % of sales
23%33%
21% 21% 13% 20% 21%36%
14% 19%23%33%
21% 19% 13%22% 22%
41%
17% 20%
Vardhman Arvind WelspunIndia
Trident JBFIndustries
SRF RSWM Raymond Indo RamaSynthetics
SutlejIndustries
Other Costs – % of sales
Q3-FY16 Q3-FY17
Source: Moneycontrol
8
Consolidated analysis for the selected top players
9,351
9,757
Q3-FY16 Q3-FY17
Consolidated Sales – Rs. CrOn consolidated level, Sales have increased by 4% in Q3 FY17 as compared to Q3 FY16
Average raw material cost have decreased along with decrease in raw material prices.
Consolidated EBITDA margin decreased by 1.2 percentage point for the selected top companies
Average manpower cost have increased because of increase in labour wages.
Other expenses also increased in Q3 FY17
16.1%
14.9%
Q3-FY16 Q3-FY17
Average EBITDA %
52.1%
51.7%
Q3-FY16 Q3-FY17
Average RM Cost - % of Sales
8.9%
9.9%
Q3-FY16 Q3-FY17
Average Manpower Cost -% of Sales
22.9%
23.5%
Q3-FY16 Q3-FY17
Average Other Expenses -% of Sales
Source: Moneycontrol
9 Months Financial Performance – 9M FY17
10
Overall revenue has increased while EBIDTA margins have declined in 9M FY17
• Trident has shown the highest revenue growth rate of 26% while that of RSWM is negative 0.4%• Except Vardhman, Trident & Sutlej Industries, all the companies have shown decline in EBIDTA margin.
20%15%
26%20%
11%
23%
13%8%
3.4%
12%
23%
13%
24%20%
7%
23%
12%
4%-0.5%
14%
Vardhman Arvind WelspunIndia
Trident JBF Industries SRF RSWM Raymond Indo RamaSynthetics
SutlejIndustries
9 Months EBIDTA Margin Trend – 9M FY17
9M-FY16 9M-FY17
4,225 3,962 3,574 2,738 2,628 2,741
2,190 2,044 1,878 1,722
4,339 4,414 4,241
3,450 2,850 2,792 2,181 2,053 1,918 1,652
Vardhman Arvind WelspunIndia
Trident JBF Industries SRF RSWM Raymond Indo RamaSynthetics
SutlejIndustries
9 Months Revenue Trend - 9M FY17 (Rs Cr.)3%
26%19%11%
8% 2% -0.4% 0.5% 2% -4%
Growth %
Source: Moneycontrol
11
9 Monthly Analysis – Major expenses as % of sales
7%12%
8%11%
2%8%
11% 12%
4%10%
8%
13%8%
12%
2%
9%12% 14%
4%
12%
Vardhman Arvind WelspunIndia
Trident JBFIndustries
SRF RSWM Raymond Indo RamaSynthetics
SutlejIndustries
Man Power Cost– % of sales
24%33%
21% 22%13% 20% 21%
38%
14% 18%23%32%
22% 20% 12%21% 21%
38%17% 19%
Vardhman Arvind WelspunIndia
Trident JBFIndustries
SRF RSWM Raymond Indo RamaSynthetics
SutlejIndustries
Other Costs – % of sales
9M-FY16 9M-FY17
49% 40% 45% 47%74%
50% 54%42%
78%59%
46% 41% 47% 47%
79%
48% 55% 44%
79%55%
Vardhman Arvind WelspunIndia
Trident JBFIndustries
SRF RSWM Raymond Indo RamaSynthetics
SutlejIndustries
Raw Material Cost– % of sales
Source: Moneycontrol
12
Consolidated analysis for the selected top players
27,702
29,889
9M-FY16 9M-FY17
Consolidated Sales – Rs. Cr On consolidated level, Sales have increased by 8% in 9M FY17 as compared to 9M FY16
Average raw material cost have remained stable with marginal increase
Consolidated EBITDA margin decreased by 0.7 percentage points for the selected top companies
Average manpower cost have increased along with increase in labour wages.
Other expenses have decreased marginally
16.4%
15.7%
9M-FY16 9M-FY17
Average EBITDA %
51.8%
51.9%
9M-FY16 9M-FY17
Average RM Cost - % of Sales
8.7%
9.5%
9M-FY16 9M-FY17
Average Manpower Cost -% of Sales
23.1%
22.9%
9M-FY16 9M-FY17
Average Other Expenses -% of Sales
Source: Moneycontrol
Market Update
14
Key Economic Indicators
IIP for textile has grown by 1% while IIP for apparel has declined by 4% in Apr-Dec 2016-17 as compared to Apr-Dec 2015-16
Source: RBI, Economic Advisor Govt. of India
138.0140.0142.0144.0
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Wholesale price index (WPI)
Textiles
WPI for textiles has shown an increase of 1% between Apr’16 and Dec’16
India’s GDP has shown a growth of 7.0% in Apr-Dec 2016-17 as compared to Apr-Dec 2015-16
77.32
82.72
Apr-Dec 2015-16 Apr-Dec 2016-17
India’s 9M FY17 GDP (at constant prices)
7.0 % Growth
0.0
100.0
200.0
300.0
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Index of Industrial Production (IIP)
Textiles Apparel
Rs. Lakh Cr.
15
21%
13%
6%
5%5%
50%
US
UAE
UK
Bangladesh
Germany
Others
20%
13%
6%6%4%
50%
India’s T&A* exports have decreased by 5% in 9M FY17
Source- DGCI&S
India’s Textile and Apparel Exports (In US$ mn.)
• Export of all categories have reduced in in Apr-Dec 2016-17 as compared to Apr-Dec 2015-16
• Highest fall is observed in Fibre and Yarn with 24% & 11% drop, respectively• USA and UAE are the two largest export markets
* T&A- Textile & Apparel
Categories Apr-Dec 2015-16 Apr-Dec 2016-17 %Change
Fibre 1,919 1,460 -24%
Filament 784 797 2%
Yarn 3,319 2,949 -11%
Fabric 3,656 3,325 -9%
Apparel 12,461 12,435 0%
Home Textiles 3,829 3,789 -1%
Others 1,272 1,236 -3%
Grand Total 27,241 25,991 -5%
India’s T&A Top Export Markets (% value share)
9M FY17
9M FY16
16
38%
9%7%
7%
3%
36%
China
Australia
US
Bangladesh
Vietnam
Others
43%
3%5%7%3%
39%
India’s T&A imports have increased by 5% in 9M FY17
Source- DGCI&S
India’s Textile & Apparel Imports (In US$ mn.)
• Imports have reduced for all categories except Apparel & Fibre• Fibre imports have increased significantly by 46%• Yarn imports have declined significantly by 23% • China is the largest import partner for India, however import share of Australia has
increased significantly in 9M FY17 due to 12 times increase in cotton imports from Australia
Categories Apr-Dec 2015-16 Apr-Dec 2016-17 %Change
Fibre 1,080 1,576 46%
Filament 422 419 -1%
Yarn 352 271 -23%
Fabric 1,510 1,401 -7%
Apparel 430 453 5%
Home Textiles 280 222 -21%
Others 448 421 -6%
Grand Total 4,522 4,763 5%
India’s T&A Top Import Markets (% value share)
9M FY17
9M FY16
17
86.0
33.9
8.7 5.4 4.2
79.5
29.9
8.6 5.3 4.0
World China & HK Vietnam India Bangladesh
Apr-Dec 2015-16 Apr-Dec 2016-17
-1.1%
89.8
32.8
11.5 6.1 2.6
90.2
31.4
12.46.2 2.8
World China & HK Bangladesh India Vietnam
Apr-Dec 2015-16 Apr-Dec 2016-17
T&A imports of US has declined while imports of EU-28 has remained stable with marginal increase
Overall Imports and Top import Countries of USA-7.6%
-11.8%
0.4%
7.8%
Overall Imports and Top import Countries of EU-28
Source- OTEXA (For USA) and EUROSTAT (For EU-28)
-4.8%-1.9%
-4.3%
1.6% 7.7%
US$ bn
US$ bn
18
Raw material prices have increased for cotton and viscose while for polyester there is slight decline
150160170180190200210220230
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Yarn Prices Rs./Kg
Cotton Yarn PV Yarn PC Yarn
Average Price Change in in 9M FY17 as compared to 9M FY16• 3% increase in cotton yarn• 2% increase in PV yarn• 8% decrease in PC yarn
Source: Ministry of Textiles
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Fibre Prices Rs./Kg
Raw Cotton VSF PSF
Average Price Change in 9M FY17 as compared to 9M FY16• 16% increase in raw cotton • 6% increase in VSF• 7% decrease in PSF
19
EBIDTA – Earnings Before Interest Depreciation Tax & Amortization
EU – European Union
FY – Financial Year
GDP – Gross Domestic Product
HK – Hong Kong
Q3 FY 17 – October 2016 to December 2016
Q3 FY 16 – October 2015 to December 2015
9M FY16 – April 2015 to December 2015
9M FY17 – April 2016 to December 2016
PAT –Profit After Tax
PV – Polyester Viscose
PC – Polyester Cotton
PSF – Polyester Staple Fibre
T&A – Textile & Apparel
US – United States of America
UK – United Kingdom
VSF – Viscose Staple Fibre
YOY – Year on Year
Glossary
20
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