wazir textile index textile index report - h1 fy19...5 wazir textile index (wti) –h1 fy19 sales is...

Wazir Textile IndexHalf Yearly Report: H1 FY 2018-19

December 2018

2

• Wazir Textile Index – H1 FY19

• Half Yearly Financial Performance – H1 FY19

• Market Update

• Key Economic Indicators

• Export – Import Trend

• Raw Material Price Trend

• Annexure: Wazir Textile Index – Explanation

Contents

Wazir Textile Index (WTI) – H1 FY19

4

S. No. Company Name Annual Sales* - FY18 (Rs Cr)

1 Arvind 6,420

2 Vardhman 5,851

3 Welspun India 4,977

4 SRF 4,582

5 Trident 4,564

6 Raymond 3,012

7 RSWM 2,940

8 KPR Mills 2,512

9 Sutlej Industries 2,462

10 Indo Rama Synthetics 2,256

List of Companies included as part of financial analysis

Top listed textile companies in terms of sales turnover in FY18 have been included for financial analysis

Note: Companies that have shown significant negative deviation in numbers or those which have not yet reported the financials have not been included in the overall analysis

Source: Moneycontrol * Sales constitutes total operating income, standalone financials have been considered for analysis

5

Wazir Textile Index (WTI) – H1 FY19

Sales is increasing and there is revival in EBITDA margins

WTI Sales WTI EBITDA

100109.9 110.3 121.1

Base year(H1 FY16)

H1 FY17 H1 FY18 H1 FY19

100109.1

80.9

96.3

Base year(H1 FY16)

H1 FY17 H1 FY18 H1 FY19

100 100 100 109.6 119.3107.4117.8

128.9109.0

126.8 135.2 125.1

RM Cost Employee Cost Other Cost

WTI Cost

Base year (H1 FY16) H1 FY17 H1 FY18 H1 FY19

• In H1 FY19, overall sales and EBITDA increased significantly by 10% and 19% respectively.• Raw material and employee costs have continued to increase during first half of FY19.

Half Yearly Financial Performance –

H1 FY19

7

Overall Revenue and EBITDA margin witnessed growth in H1 FY19

3,106 2,883 2,5692,323

2,077

1,392 1,389 1,211 1,256 1,172

3,294 3,1362,819

2,5233,030

1,4511,518

750

1,303 1,450

Arvind Vardhman WelspunIndia

Trident SRF RSWM Raymond Indo Rama SutlejIndustries

KPR Mills

Half Yearly Sales* Trend – H1 FY19 (Rs Cr.)

6% 9%10%9% 46% 4% 9% -38% 4% 24%

10%14%

17% 17% 17%

7% 5% 3%

11%18%

10%

18% 15% 18% 17%

8% 6% 0.5%9%

20%



KPR Mills

Half Yearly EBITDA Margin Trend – H1 FY19

HY1-FY18 HY1-FY19

• Sales of top companies (except Indo Rama) have grown in first half of FY 2018-19.• SRF has shown the highest sales growth of 46% in H1 FY19, while Indo Rama Synthetics witnessed

the highest decline, falling 38% over the same period.• Except Welspun, Sutlej Textiles and Indo Rama Synthetics, EBITDA margins of all other top companies

have increased or remained stagnant in H1 FY19.

Source: Moneycontrol * Sales and EBITDA are as per operating performance of companies

8

Half yearly Analysis - Major expenses as % of sales

45% 54% 51% 50% 54% 57% 45%75%

56% 63%46% 51% 53% 46% 56% 56% 46%

76%58% 58%



KPR Mills

Raw Material Cost – % of sales

13%8% 10% 12%

9%14% 15%

4%

12% 10%12%8% 9%

12%7%

12%15%

5%

12% 12%



KPR Mills

Employee Cost – % of sales

32% 23% 22% 20% 20% 23%35%

18% 20%10%

32%23% 23% 24% 20% 23%

34%18% 21%

11%



KPR Mills

Other Costs – % of sales

HY1-FY18 HY1-FY19

Source: Moneycontrol

9

Consolidated analysis for the selected top players

19,378

21,272

H1 FY18 H1 FY19

Consolidated Sales – Rs. Cr On consolidated level, Sales have increased by 10% in H1 FY19 as

compared to H1 FY18

Consolidated EBITDA margin increased by 1.1 percentage points for the selected top

companies

12.7%

13.8%

H1 FY18 H1 FY19

Average EBITDA %

Average RM cost declined marginally as

compared to first half of previous year

Average employee cost also declined

marginally

Other expenses increased by 1 p.p.

53.3%

52.3%

H1 FY18 H1 FY19

Average RM Cost - % of Sales

10.7%

10.2%

H1 FY18 H1 FY19

Average Employee Cost -% of Sales

Source: Moneycontrol * Percentage Points

10% 1.1 pp*

22.7%

23.7%

H1 FY18 H1 FY19

Average Other Expenses -% of Sales

Market Update

11

Key Economic Indicators

Average IIP for textiles and apparel increased by 2%

and 5% respectively in H1 FY19 compared to H1

FY18

100

110

120

May

'15

July

'15

Sep

'15

No

v'15

Jan

'16

Mar

'16

May

'16

July

'16

Sep

'16

No

v'16

Jan

'17

Mar

'17

May

'17

July

'17

Sep

'17

No

v'17

Jan

'18

Mar

'18

May

'18

July

'18

Sep

'18

Wholesale price index (WPI*)

Textiles

Average WPI for textiles increased by 3% in H1

FY19 compared to H1 FY18

India’s real GDP has grown by 7.1% in H1 FY19

compared to H1 FY18

7.1% Growth

100.0

120.0

140.0

160.0

180.0

200.0

July

'15

Sep

'15

No

v'1

5

Jan

'16

Mar

'16

May

'16

July

'16

Sep

'16

No

v'1

6

Jan

'17

Mar

'17

May

'17

July

'17

Sep

'17

No

v'1

7

Jan

'18

Mar

'18

May

'18

July

'18

Sep

'18

Index of Industrial Production (IIP*)

Textiles Apparel

Rs. Lakh Cr.

Source: Reserve Bank of India, Economic Advisor, Govt. of India *Base Year 2011-12

62.91

67.72

H1 FY18 H1 FY19

India’s GDP (at constant prices)

12

India’s overall T&A* exports have declined by 1% in H1 FY19, Apparel exports declined heavily by 16%

However, Fibre, Filament and Yarn exports witnessed double digit growth

India’s Textile and Apparel Exports (In US$ mn.)

• Export of all the categories except apparel have grown in H1 FY19 as compared to H1 FY18. OverallT&A exports declined by 1% in first half of FY 2018-19.

• Apparel exports saw a decline of 16% this half year. Decline in apparel exports is largely attributedto declining exports to UAE, which have declined sharply by 55% during H1 FY19. Overall T&Aexports to UAE declined by ~50% during this half year.

• EU, USA and UAE remains the top export destinations for India’s T&A products.

Source: DGCI&S *T&A – Textile & Apparel

25%

22%

7%6%

6%

34%

EU-28 USA UAE

Bangladesh China Others

26%

21%

13%5%3%

32%

India’s Top T&A Export Markets

% Value Share

H1 FY18

H1 FY19Category Q1

FY18Q1

FY19%

Change

Q2 FY18

Q2 FY19

% Change

H1 FY18 H1 FY19 %chan

ge

Fibre 632 854 35% 372 540 45% 1,004 1,393 39%

Filament 270 352 30% 310 335 8% 580 686 18%

Yarn 879 1,297 48% 1,007 1,241 23% 1,886 2,538 35%

Fabric 1,148 1,145 -0.3% 1,169 1,182 1% 2,318 2,326 0.4%

Apparel 4,906 4,050 -17% 4,277 3,673 -14% 9,184 7,723 -16%

Home Textile

1,280 1,294 1% 1,381 1,438 4% 2,660 2,731 3%

Others 438 491 12% 518 527 2% 956 1,018 7%

Total 9,553 9,481 -1% 9,035 8,935 -1% 18,588 18,417 -1%

13

India’s T&A* imports have increased by 4% in H1 FY19.

India’s Textile and Apparel Imports (In US$ mn.)

• Import of all categories except Fibre have increased in H1 FY19.• Apparel imports increased heavily by 56%, primarily due to impact of reduced effective import

duties post GST for imports from countries like Bangladesh & China.• China continues to be the largest import partner for India, however imports from china declined

marginally by 0.4% when compared y-o-y.

Source: DGCI&S *T&A – Textile & Apparel

37%

10%9%

7%

4%

33%

China EU-28USA BangladeshAustralia Others

39%

8%12%

4%6%

30%

India’s Top T&A Import Markets

% Value Share

H1 FY18

H1 FY19

Apparel imports increased significantly by 56% in H1 FY19

Category Q1 FY18

Q1FY19

% Chan

ge

Q2 FY18

Q2 FY19

% Chan

ge

H1FY18

H1FY19

%chang

e

Fibre 583 502 -14% 670 467 -30% 1,254 969 -23%

Filament 156 167 7% 159 182 15% 315 349 11%

Yarn 101 114 14% 105 103 -2% 205 217 6%

Fabric 603 661 10% 544 614 13% 1,148 1,275 11%

Apparel 140 196 40% 208 346 66% 347 541 56%

Home Textiles

59 58 -2% 85 90 6% 144 148 3%

Others 139 171 23% 144 171 19% 283 342 21%

Total 1,781 1,869 5% 1,915 1,972 3% 3,696 3,841 4%

14

T&A imports of USA increased in H1 FY19 while that of EU declined marginally

130

218.9 7.9 4.4 2.9 2.1 2.0 1.6 1.2 0.6

129

22

10 8.6 4.7 3.2 2.5 2.2 1.8 1.3 1.1

World China Bangladesh Turkey India Pakistan Cambodia Vietnam Morocco Tunisia Myanmar

H1 FY18 H1 FY19

15%4.5% 6.2%9.2%

Overall Imports and Top import Countries of EU-28*

8.9%16% 11% 13% 12% 69%

-0.6%

in US$ Bn

56

21

6.3 3.7 2.7 2.4

2.4 1.4 1.3

1.1

58

21

6.8 3.9 2.9

2.4 2.4 1.4 1.4

1.3 1.0

World China Vietnam India Bangladesh Mexico Indonesia Pakistan Honduras Cambodia El Salvador

H1 FY18 H1 FY19

7.3%

1.1%

9.1%5.2%

Overall Imports and Top import Countries of USA

0.5% 0.1% 3.5% 0.4% 15% 3.3%

4% in US$ Bn

Source: OTEXA, EUROSTAT * EU-28 data excludes intra EU trade

15

Average raw material prices increased in H1 FY19 compared to H1 FY18

150160170180190200210220230240250

May

'15

July

'15

Sep

'15

No

v'15

Jan

'16

Mar

'16

May

'16

July

'16

Sep

'16

No

v'16

Jan

'17

Mar

'17

May

'17

July

'17

Sep

'17

No

v'17

Jan

'18

Mar

'18

May

'18

July

'18

Sep

'18

Yarn Prices Rs./Kg

Cotton Yarn PV Yarn PC Yarn

Average price change in H1 FY19 as compared to H1 FY18• 6% increase in cotton

yarn • 7% increase in PV yarn• 9% increase in PC yarn

6080

100120140160180200220

May

'15

July

'15

Sep

'15

No

v'15

Jan

'16

Mar

'16

May

'16

July

'16

Sep

'16

No

v'16

Jan

'17

Mar

'17

May

'17

July

'17

Sep

'17

No

v'17

Jan

'18

Mar

'18

May

'18

July

'18

Sep

'18

Fibre Prices Rs./Kg

Raw Cotton VSF PSF

Average price change inH1 FY19 as compared toH1 FY18• 8% increase in raw

cotton• 6% increase in VSF• 26% increase in PSF

Source: Ministry of Textiles

Annexure:

Wazir Textile Index (WTI) - Explanation

17

• Wazir Textile Index has been developed for assessing the overall financial performance of the textile sector on a continuous basis.

• This index takes the collective performance of top ten textile companies (by sales) of 2015-16 as the base/benchmark which is represented by the base Index number 100.

• Base value of 100 is assigned separately to each quarter performance and full year performance in 2015-16, and correspondingly financial performance of the textile industry is benchmarked to this base number to assess quarterly (Q1), half yearly (H1), nine monthly (9M) and yearly performance (FY) for subsequent years against the set benchmark.

• Overall textile index includes the following three components:

• WTI Sales : Consolidated sales index of top ten companies

• WTI EBITDA : Consolidated EBITDA index

• WTI Cost : Consolidated index for cost of Raw material, employee & others

Measuring financial performance of Indian Textile Sector

18

• EBITDA – Earnings Before Interest Tax Depreciation & Amortization

• EU – European Union

• FY – Financial Year

• FY16– April 2015 to March 2016


• FY18 – April 2017 to March 2018


• GDP – Gross Domestic Product

• H1 FY16– April 2015 to September 2015

• H1 FY17 – April 2016 to September 2016



• HK – Hong Kong

• PV – Polyester Viscose

• PC – Polyester Cotton

• PSF – Polyester Staple Fibre

• RM – Raw Material

• T&A – Textile & Apparel

• USA – United States of America

• UK – United Kingdom

• VSF – Viscose Staple Fibre

• WTI – Wazir Textile Index

• YOY – Year on Year

• YTD – Year till date

Glossary

CONTACT

Wazir Advisors Pvt. Ltd3rd Floor , Building #115, Sector 44, Gurgaon - 122 002 Haryana- IndiaTel : +91 124 4590 300

Prashant Agarwal

[email protected]+91 9871195008

Sanjay Arora


Varun Vaid


B.Prakash


Website: www.wazir.in

Linkedin.com/in/WazirAdvisors

Twitter.com/WazirAdvisors

Facebook.com/WazirAdvisors

http://www.wazir.in/

wazir textile index textile index report - h1 fy19...5 wazir textile index (wti) –h1 fy19 sales is...

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