Although textile exports have shown a negative growth but textile players are upbeat and exploring avenues for diversification to beat the slowdown.
Alok Industries, a Mumbai-based company, which posted a Q3 net profit of Rs 50 crore with a market capitalisation of Rs 1,600 crore has forayed into a new segment called institutional fabrics.
Alok Industries CFO Sunil Khandelwal said, ?We have forayed into camouflage and visibility fabrics and will soon enter the technical textile. We have fine-tuned our strategies to grow at decent EBITDA margins despite the slowdown.?
While Shri Lakshmi Cotsyn, a Kanpur-based company has recently diversified into armoured vehicles manufacturing with safety gadgets for security purpose to boost its revenue.
The company, which posted a net profit of Rs 17 crore, has secured over 200 orders for armoured vehicles costing around Rs 1.25 crore and above for defence and security personnel.
Shri Lakshmi Cotsyn CMD MP Agarwal said, ?We have diversified our portfolio to de-risk our business model. Our manufacturing facility for this venture has recently commenced commercial production or armoured vehicles and expect our first vehicle to come out of the factory in a month?s time. We expect positive response for this initiative as we are in talks with Indian paramilitary forces and also with some high-value customers including Europe and the West Asia.?
Agarwal further said high inflation rate and slow industrial growth have been undermining the actual potential of the textile sector.
?The recent financial bailout stimulus package announced by the government is quite inadequate and negligible compared to what the competing nations have been offered to overcome recession. Going forward, we have high hopes from the government on this front.?
Garment exporters have estimated a decline in sales in 2008 at $8,780 million against $9,693 million in 2007.
Industry observer said, ?Textile companies are foraying into newer segments because sales to European and the US market have dropped significantly. The textile export which was estimated over Rs 25,000 in readymade garments alone has dipped over 30% before the financial year comes to a close.?
India?s garment sales to US, worst hit by the economic slowdown, shrunk 1.25% in 2008. Bangladesh has displaced India as the fifth largest garment exporter.