Motilal Oswal initiates coverage on textile stocks: 5 ‘Buy’ recommendations with 39% upside

“We initiate coverage on eight textile companies with a preference for exporters and home textile players that are best placed to benefit from demand recovery, improved tariff competitiveness and ongoing capacity expansion,” Motilal Oswal said.

Textile sector set for turnaround?

The brokerage said the global textile and apparel trade went through a difficult stretch over CY21-25 after the post-Covid demand spike, with weak discretionary spending, retailer inventory correction, supply-chain disruptions and tariff uncertainty weighing on growth. 

It now expects conditions to improve as inventories normalise, inflation eases and sourcing trends stabilise. Motilal Oswal also said India is well placed to benefit from free trade agreements with the UK and EU, lower relative tariff disadvantages in the US market and a broader shift in sourcing away from China.

Motilal Oswal also said Indian textile companies are entering a new capex phase across garments, fabrics, technical textiles and value-added products, supported by stronger order visibility and policy support through PM MITRA, PLI and ATUFS. It expects supplier consolidation to benefit larger listed exporters as global brands increasingly prefer scale, compliance and lower audit complexity.

Motilal Oswal on Gokaldas Exports: ‘Buy’

Motilal Oswal has initiated Gokaldas Exports with a target price of Rs 1,110, implying 36% upside from the reference price used in the report. The brokerage said Gokaldas is likely to deliver strong growth led by capacity expansion in India and better utilization in its Africa business following the renewal of the African Growth and Opportunity Act, or AGOA.

It expects Gokaldas to post a revenue CAGR of 18%, EBITDA CAGR of 33% and adjusted PAT CAGR of 73% over FY26-28. Motilal Oswal has valued the stock at 14x FY28 EV/EBITDA.

Motilal Oswal on Arvind: ‘Buy’

Motilal Oswal has initiated Arvind with a target price of Rs 670, implying 30% upside. The brokerage said Arvind is moving from a fabric-focused company to a garments-led business, which opens up a larger addressable market. It also expects the advanced materials division to support growth because of its superior margin profile and the Dalco-GFT acquisition.

The brokerage projects Arvind to deliver a revenue CAGR of 15%, EBITDA CAGR of 23% and adjusted PAT CAGR of 29% over FY26-28. Its target price is based on 13x FY28 EV/EBITDA.

Motilal Oswal on Pearl Global Industries: ‘Buy’

Motilal Oswal has initiated Pearl Global Industries with a target price of Rs 2,300, implying 28% upside. The brokerage said Pearl Global is positioned for higher revenue growth through capacity expansion across India, Bangladesh, Vietnam and Indonesia.

It expects Pearl Global to report a revenue CAGR of 14%, EBITDA CAGR of 25% and adjusted PAT CAGR of 29% over FY26-28. Motilal Oswal has assigned a 15x FY28 EV/EBITDA multiple to the stock.

Motilal Oswal on Indo Count Industries: ‘Buy’

Motilal Oswal has initiated Indo Count Industries with a target price of Rs 550, implying 39% upside, the highest among the stocks it has rated ‘Buy’ in the sector. The brokerage said Indo Count, a leading bed linen exporter, should see stronger growth from its emerging utility bedding business and its India bed linen operations.

It expects Indo Count to deliver a revenue CAGR of 20%, EBITDA CAGR of 44% and adjusted PAT CAGR of 90% over FY26-28. The target price is based on 15x FY28 EV/EBITDA.

Motilal Oswal on Welspun Living: ‘Buy’

Motilal Oswal has initiated Welspun Living with a target price of Rs 200, implying 23% upside. The brokerage said Welspun, one of India’s leading home textile exporters, is likely to deliver mid-teens revenue growth led by its home textile business, helped by lower tariffs and potential FTAs with the UK and EU.

It projects Welspun to post a revenue CAGR of 14%, EBITDA CAGR of 43% and adjusted PAT CAGR of 97% over FY26-28. Motilal Oswal values the stock at 12x FY28 EV/EBITDA.

Why is Motilal Oswal positive on textiles

Motilal Oswal said US retail inventories have corrected to near pre-Covid levels after 2-3 years of elevated stock, which should reduce order volatility and support more normal sourcing cycles for Indian exporters. It also pointed to improving commentary from global retailers around demand visibility, sell-through and inventory positions.

The brokerage also highlighted India’s improving tariff position in the US market. It said additional tariffs on Indian textile exports, which had climbed as high as 50% in 2025, were later reduced to about 10% through 2026, while competing countries such as Bangladesh, Vietnam and Indonesia continue to face tariffs of roughly 19-20%.

More broadly, Motilal Oswal said India’s textile and apparel market reached about $194 billion in FY26, with exports at $37 billion, and sees further room for growth as global brands diversify sourcing and India gains share through scale, compliance and product breadth.

Conclusion

Motilal Oswal’s textile picks are tilted toward exporters and home textile companies that it believes can benefit from a recovery in global demand, a more favourable tariff setup and ongoing capex in value-added categories. Gokaldas Exports, Arvind, Pearl Global Industries, Indo Count Industries and Welspun Living are the five names it has started with ‘Buy’ ratings.

Disclaimer: The stock ratings, target prices, and financial growth projections (such as revenue, EBITDA, and PAT CAGRs) outlined in this brokerage coverage report for the textile sector are for informational and educational purposes only. They do not constitute an offer, solicitation, or recommendation to buy, sell, or hold any financial instruments or equity shares.

Investments in the textile and apparel sector carry significant inherent market risks, including volatility in global discretionary spending, raw material price fluctuations (such as cotton and synthetic yarn), currency exchange rate swings, execution risks on multi-geography capacity expansions, and changes in international trade policies or Free Trade Agreements (FTAs). Readers are strongly advised to conduct independent analysis and consult a SEBI-registered investment advisor or a qualified financial consultant before making financial choices or investing capital based on these projections.

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