Best Textile Stocks in India in 2024

In this article, we will discuss

• An Overview of the Indian Textile Industry
• The Best Textile Stocks in India in 2024
• Things to Keep in Mind Before Investing in Textile Stocks
• Conclusion

When investing in the Indian stock market, most investors tend to focus more on the flagship sectors such as technology, finance and healthcare. However, there is another major sector that has significant long-term growth potential that is often overlooked - the textile industry.

Thanks to a unique combination of stability and future growth potential,textile stocks make a compelling case for investment in 2024. Both seasoned and beginner investors could benefit from including stocks from the textile sector in their investment portfolios.

An Overview of the Indian Textile Industry

India has always been a major player in the textile industry around the world. Of late, the growth of the sector has been increasing by leaps and bounds. The export of technical textile products grew by 28.4% year-over-year between FY21 and FY22 alone and the total value of all textile exports in FY22 comfortably crossed $44 billion.

The strong year-over-year growth has propelled India to a massive 4% share in the global textile and apparel trade. The contribution of the industry to the country’s economy is something that cannot be glossed over. The textile sector accounts for more than 2.3% of the total country’s Gross Domestic Product (GDP). In terms of providing employment, it is second only to the agricultural industry.

One of the many reasons for the stellar growth of this sector could be attributed to the introduction of the Production-Linked Incentive (PLI) Scheme that was launched in March 2020. Through a total capital outlay of ₹10,683 crore, the scheme has enabled many textile producers to scale up and become more competitive in the global landscape.

If the current growth trajectory continues over the next few years, the industry could potentially achieve a production value of $250 billion and is likely to touch $100 billion in total exports by 2030. With such robust potential to leverage, investing in textile stocks could significantly add to the wealth-creation potential of your investment portfolio.

The Best Textile Stocks in India in 2024

Here is a table outlining the top 10 best stocks from the Indian textile industry, along with some of its key financial metrics, that you could consider adding to your portfolio.

Note: All of the values in the table are valid as of August 9, 2024.

• Arvind Limited

One of the oldest textile manufacturing companies in India, Arvind Limited, started its operations in 1897 by setting up its first-ever industrial mill. Since then, the company has had a meteoric rise through the ranks and is currently manufacturing a wide range of fabrics and apparel for some of the leading clothing brands in the world.

Arvind Limited has dedicated labs and divisions for manufacturing denim, woven fabrics, knitted fabrics and voiles. Tommy Hilfiger, Calvin Klein, Flying Machine, U.S. Polo Assn. and Arrow are some of the global and domestic brands that the company currently serves. This makes Arvind Limited one of the best shares to buy in 2024.

• Garware Technical Fibers Limited

Founded in 1976, Garware Technical Fibers Limited specialises in manufacturing high-performance synthetic ropes, nets and geosynthetics. The company’s products are widely used for various applications such as sports, fishing, aquaculture and infrastructure, among others.

In addition to manufacturing a plethora of technical textile products through its two state-of-the-art manufacturing facilities, Garware also has 27 approved patents in the technical fibre domain. The company is currently present in over 75 different countries around the world and has consistently been awarded for its innovations in the field of technical textiles.

• KPR Mill Limited

Another vertically integrated apparel manufacturing company in India, KPR Mill Limited, was founded in 1984 in Coimbatore, Tamil Nadu. The company is involved in the production of fabrics, yarn and garments. Apart from providing their manufacturing expertise to other brands, KPR Mill also markets their products under their own brand, FASO.

In an attempt to enhance its export capability to all of Asia, the company incorporated a wholly-owned subsidiary in Singapore in 2020. The current manufacturing capacity of KPR Mill is 1,00,000 metric tonnes of yarn and 40,000 metric tonnes of fabric per year, which it is looking to expand in the future. In addition to textiles, KPR Mill Limited also has a profitable white crystal sugar manufacturing business.

• Raymond Limited

Established in 1925, Raymond Limited is one of the most recognisable textile manufacturing and marketing entities in India. The company has the distinction of being the first to produce Super 250s and other innovative fabrics in the world. This milestone was achieved in 2015, much earlier than other competitors in the space.

Both vertically and horizontally integrated, Raymond has a stronghold in the domestic garment segment, with several leading brands under its belt. Some of the key brands under which the company markets its products include Raymond, Park Avenue, ColorPlus and Parx Ethnix, among others.

With a strong distribution network comprising over 4,000 stores and 600 exclusive stores, Raymond Limited has an unshakeable hold over the premium garment segment in India. This makes it one of the top textile stocks to have in your portfolio.

• Siyaram Silk Mills Limited

Established in 1978, Siyaram Silk Mills Limited is a manufacturer of ready-made garments, fabrics and other textile products. The company’s now-iconic ‘Come home to Siyaram’s’ marketing campaign has propelled it into a household name in India.

The ready-made garments that Siyaram Silk Mills manufactures are marketed under different brands catering to various segments of the populace. Some of the brands under its control include J. Hampstead, Oxemberg, Mozzo, Cadini, Inspiro, Tessio, Cavalero and Canetti. The company’s annual production is currently more than 100 million metres of fabric and over 5 million garments.

• Trident Limited

Established in 1990, Trident Limited is a conglomerate with multiple businesses across different sectors under its belt. One of the company’s major business verticals includes textiles, which manufactures not just yarn but also a wide range of home textiles. One of the strong suits of Trident Limited is its collection of textile brands. The company markets its products under 10 different brands.

Trident Limited has a total production capacity of 458.4 metric tonnes of combed, carded, open-end and air-jet yarn per day. The company’s bed and bath linen range comprises an extensive range of products across luxury, premium, exclusive and essential segments, each catering to the different needs of consumers.

• Vardhman Textiles Limited

Vardhman Textiles Limited was incorporated in 1973 in Ludhiana, Punjab. The company is currently India’s largest vertically integrated textile manufacturer, with 18 different manufacturing facilities across the country. One of the few textile manufacturing companies to produce acrylic fibre in India, Vardhman Textiles markets it under the brand name ‘VARLAN’.

Vardhman Textiles Limited’s total fabric weaving capacity exceeds 220 million metres per annum, whereas its fabric processing capacity is over 180 million metres per annum. Such strong production capabilities make the company one of the best shares to buy in 2024, especially if the industry in India gets a boost from the Government of India.

• Welspun Living Limited

Previously known as Welspun India Limited, Welspun Living Limited has been manufacturing a comprehensive range of textile products since 1985. The company has a dedicated home textile manufacturing facility in Vapi and Anjar, Gujarat. Both of these facilities are among the largest vertically integrated production lines in India.

Welspun Living Limited’s product range is split across three verticals - flooring, bedding and bath. Under the flooring vertical, the company manufactures and exports broadloom carpets, carpet tiles and area rugs. Under the bath solutions vertical, Welspun produces towels, bathrobes and rugs. And under the bedding vertical, the company produces bedsheets, mattress pads, comforters and pillow fillers.

Things to Keep in Mind Before Investing in Textile Stocks

Before you invest in any stock in the textile sector, it is essential to conduct thorough research and consider various factors that could impact the performance of your investment. Here are a few things that you should take into account.

• Market Trends

The demand for textile products is heavily influenced by consumer preferences. Therefore, it is advisable to keep a close watch on how it evolves. Additionally, you must also stay updated on industry trends and other key macroeconomic indicators since the sector is reliant on exports.

• Competitive Landscape

Thoroughly assessing the competitive dynamics within the textile industry is a major step you must take before investing. This should give you crucial insights into market share, pricing strategies and barriers to entry. For example, the competitive landscape within the technical textile segment of the industry is not as intense as garments or home textiles.

• Regulatory Environment

The regulatory environment also plays a crucial role in the performance of textile stocks and the industry. Favourable government policies, production-based incentives and trade agreements with other nations have the potential to drive textile companies’ operations and revenue generation capabilities.

• Long-Term Outlook

Textile companies that innovate often tend to do well in the long run. Therefore, you must ensure that you pick stocks that have a strong track record of innovation and adaptability.

Conclusion

Investing in some of the best textile companies can enhance your investment portfolio’s return-generation capability. However, it is important to back your investment choices with thorough research and due diligence. This way, you can ensure that you make the right decision in line with your objectives.

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