Hit hard by pandemic, textiles now showing signs of recovery

The covid-19 pandemic had its adverse effect on the sales and profits in the textiles sector. The Wazir Textile Index (WTI) saw a drastic drop in sales and EBIDTA in H1 FY21 owing to the pandemic.

In H1 FY21, overall sales dropped by 36 per cent as compared to that in H1 FY20. The overall EBIDTA showed a decline of 58 per cent in H1 FY21 as compared to H1 FY20. Raw material (RM) cost and manpower cost also decreased by 36 per cent and 23 per cent, respectively during the same period.

The latest edition of the WTI, which encompasses the highlights of the cumulative financial performance of the top Indian textile companies with respect to the market performance of the Indian textiles sector, has just been released for H1 FY21.

According to the WTI, the consolidated sales of the selected top 10 companies were ₹12,934 crore in H1 FY21 as compared to ₹20,235 crore in H1 FY20 and showed a decline of 36 per cent as compared to the previous year. As compared to H1 FY20, the average EBITDA margin has also declined by 4.5 percentage points in H1 FY21 for the selected top companies. Average RM cost decreased by 0.3 percentage points, while the average employee cost increased by 2.3 percentage points in H1 FY21 as compared to the same period during the previous financial year.

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