Booming Hosiery Market: 10-12% Revenue Surge Predicted for 2024-25

CRISIL Ratings forecasts a 10-12% revenue increase for Indian hosiery makers in 2024-25, driven by revived rural demand, robust export volumes, and modern trade sales. Despite a minor dip in sales prices, improved margins and higher capacity utilization are expected amid stable yarn prices and strong channel partner demand.

Indian hosiery manufacturers are poised for a significant 10-12% growth in revenue for the fiscal year 2024-25, according to CRISIL Ratings. This optimistic forecast arises from a revival in rural demand, support from the export market, and strong sales through modern trade channels.

The anticipated volume growth is expected to offset a slight year-on-year decline in average sales due to lower selling prices aimed at clearing year-end inventory. The industry's operating margin is projected to improve by 150-200 basis points, thanks to reduced input prices and better capacity utilization driven by increased volumes.

CRISIL Ratings Director Argha Chanda highlighted factors like enhanced agricultural yields from an above-normal monsoon, increased government spending on rural infrastructure, and rising exports to regions like the Middle East and North Africa. These elements, coupled with robust urban demand supported by expanding modern trade, will bolster volume growth and industry resilience.

The hosiery sector typically experiences a surge in activity towards the fiscal year's close as partners stock up for summer demand. Last year's sales were hindered by cautious stocking amidst falling yarn prices. However, price stability and a minimal dip in selling prices this fiscal have rejuvenated demand. Manufacturers are expected to scale back on advertising spending while increasing operating leverage through higher capacity utilization.

This scenario is expected to enhance liquidity, with greater cash accruals and reduced inventory holding periods lowering the industry's working capital needs. This strategic approach is set to fortify the financial standing of hosiery players in the market. (ANI)

(With inputs from agencies.)