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Credit rating agency ICRA in its latest report has said that its sample companies of Indian home textile industry are expected to report around 7-8% YoY increase in revenues to Rs 215 billion for FY24, supported by a rebound in demand conditions and restocking by big retailers from the US market to realign their inventory levels.

According to the report, India’s home textile exports reported a double-digit decline of 18% and 12% in FY2023 and 4M FY2024, respectively, amid high raw material expenses and energy inflation, coupled with a muted demand scenario in the US and the EU markets. The US remains the largest market for Indian home textile exports, with a 56% share in FY2023 and 58% share in 4M FY2024. Given the high dependence on the US market, the strength in retail sales there remains a key demand driver for Indian exporters. The US retail inventory levels for furniture, home furnishing, electronics, and appliance stores have come down from CY2022 levels, with destocking being almost over for the big retailers. As a result, ICRA expects retailers to start buying in the subsequent months to restock their inventory, thereby improving the overall order book position and revenues for FY2024 of the home textile players.

The report further said the product wise breakup of the home textiles exports indicates that value-wise, bed/table/toilet/kitchen linen remains the largest product category in exports with around 32-33% share in FY2023 and 4M FY2024, followed by carpets & floor coverings with around 31% share in FY2023 and 4M FY2024. ICRA expects the share of products to remain similar in the medium term. As raw material costs account for 55-60% of the total operating cost for home textile exporters, the increase in yarn prices has exerted some pressure on their profitability in FY2023.