e land apparel ltd share price Management discussions


The global economy is gradually recovering from the impact of pandemic and at the same time facing new challenges emerging from Russias invasion of Ukraine. The key markets in the textile industry are China, European Union, the United States and India, all of which were affected due to the COVID-19 pandemic. Downside risks to even this subdued recovery have jumped significantly from the escalation of geopolitical tensions, which have led to a broad-based increase in global commodity prices and are expected to have a large negative impact on global trade and growth. Growth and inflation outcomes are at high risk across the world as well as in India. Further, the global supply chain had seen unprecedented levels of pressure and disruption due to logistical impasse. This led to delayed delivery resulting into reduced product shelf life and increased inventory at importer / retailer level which resulted in reduction in export orders / delayed picking of confirmed orders, apart from sharp increase in vessel shipping Cost. Further, prodigious liquidity globally led to a proliferation in commodity prices including Cotton, Dyes, Chemicals, Coal, etc. Tightening of monetary policy by most Central Banks is expected to have a positive impact. Despite monetary tightening, inflation is persistent in many key economies and it is anticipated that global inflation will fall from 8.7% last year to 7% this year and settle at around 5% in the year 2024.


India is now a fast-emerging market inching to reach half a billion middle income population by 2030. All these factors are good for the Indian textile industry in a long run. Even though the global economic crisis seems to be worsening day-by-day, as long as economies are emerging and growing as those in South and South East Asia, textile industry is here to grow provided it takes competition and innovation seriously. Read below to have an insight of the stand of the Indian Textile Industry in the economy.

In the midst of a volatile global economic landscape, the Indian economy displayed remarkable resilience and posted a robust growth rate of 7.2% during the fiscal year 2022-2023. This growth was characterized by its widespread nature, encompassing various sectors, with both manufacturing and services sectors showing substantial signs of recovery. Leading economic indicators, including the Industrial Production Index (IIP), GST collections, and the latest consumer confidence survey by the Reserve Bank of India (RBI), all attest to the Indian economys steadfast rebound from the COVID-19 pandemic.

However, the year was not without its challenges, as inflation consistently exceeded the RBIs acceptable threshold. Headline inflation averaged at 6.7% for the fiscal year 2022-2023, driven by escalating commodity prices and adverse weather conditions. Fortunately, inflationary pressures started to alleviate as supply chain disruptions eased, thanks to the strategic and adaptable approach taken by the RBI.

Remarkably, the RBI effectively tackled inflation by implementing a series of policy measures, including raising the repo rate by 250 basis points between May 2022 and February 2023.


Indias textiles sector is one of the oldest industries in Indian economy dating back several centuries. Even today, textiles sector is one of the largest contributors to Indias exports with approximately 13 per cent of total exports. The textile industry is also labor intensive and is one of the largest employers. The textile industry has two broad segments. First, the unorganized sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organized sector consisting of spinning, apparel and garments segment which apply modern machinery and techniques such as economies of scale.


Textile and apparel trade is predicted to grow at a CAGR of 6.4% during the period 2020-29. Apparel trade is likely to grow at a CAGR of 5.5% and textiles at a CAGR of 7% during the period. The global textile market grew from about $573 billion in 2022 to about US$ 610 billion in 2023 at a compound annual growth rate (CAGR) of 6.6%. Rising disposable income, population, and rapid urbanization in the emerging economies such as India, the period. Rising disposable income, population, and rapid market growth. The Indian apparel industry was estimated to be worth $62 growing at CAGR of 7.6% over 2019-29 periods.

The Indian textile and apparel industry is expected to grow at 10% CAGR from 2019-20 to reach US$ 190 billion by 2025-26. India has a 4% share of the global trade in textiles and apparel. The textiles and apparel industry contribute 2.3% to the countrys GDP, 13% to industrial production and 12% to exports. The textile industry has around 45 million of workers employed in the textiles sector, including 3.5 million handloom workers. Indias textile and apparel exports (including handicrafts) stood at US$ 44.4 billion in FY22, a 41% increase YoY. Total textile exports are expected to reach US$ 65 billion by FY26.


The fundamental strength of Indian textile industry is its strong production base with wide range of fibers/yarns. These are natural fibers such as cotton, jute, silk and wool and synthetic/man-made fibers like polyester, viscose, nylon and acrylic. In producer-driven value chains, large, usually transnational, manufacturers play the central roles in coordinating production networks. Textile industry is capital- and technology-intensive comparable with automobiles, aircraft, computers, semiconductors and heavy machinery industry. Buyer-driven value chains are those in which large retailers, marketers and branded manufacturers play the pivotal roles in setting up decentralized production networks in a variety of exporting countries, typically located in developing countries.

This pattern of trade-led industrialization has become common in labor intensive, consumer-goods industries such as garments, footwear, toys, handicrafts and consumer electronics. Large manufacturers control the producer-driven value chains at the point of production, while marketers and merchandisers exercise the main leverage in buyer-driven value chains at the design and retail stages.

Apparel is an ideal industry for examining the dynamics of buyer-driven value chains. The relative ease of setting up clothing companies, coupled with the prevalence of developed-country protectionism in this sector, has led to an unparalleled diversity of garment exporters in the third world. The global apparel market size is expected to reach US $2.6 trillion in 2025 growing by a projected rate of 4%. The major growth drivers of the global apparel market will be the developing economies, mainly China and India, both growing in double digits. China will become the biggest apparel market adding more than US $378 bn. in market size by 2025, while India will be the second most attractive apparel market adding around US $ 121bn. by 2025.

Accelerated reopening of activities have re-opened opportunities for the textile market which were quiet for a long time. Further, China plus one policy by USA and Europe will lead to increase in demand for the Indian Market. With an added advantage of high quality standards and globally renowned accreditations, our Company will be forging ahead with its sustainability vision to build potential so as to grab opportunities coming its way.

Moreover, the market shows promising growth prospects, buoyed by its expanding domestic market and support from government schemes such as the PLI and PM MITRA scheme. As Indias economy continues to grow, the demand for textile and apparel products is expected to rise, creating significant opportunities for local players to increase their market share and expand globally. The Indian government approved 64 projects in the man-made value chain, encompassing fabrics, garments, and technical textiles, under the PLI Scheme. These projects involve a combined investment of approximately $2.5 billion. Furthermore, in 2022, the National Textile Technology Mission (NTTM) sanctioned 63 new projects, with a total project cost of around $20 million. With the governments continued support and initiatives to promote growth in the industry, India is poised to emerge as a significant player in the global textile and apparel trade.


The Indian textile industry is highly fragmented and is being dominated by the unorganized sector and small and medium industries. The changing government policies at the state and central government levels are posing major challenges to the textile industry. The tax structures GST (Goods and Service Tax) make the garments expensive. Another important thereat is raising interest rates and labor wages and workers salaries.

There is higher level of attrition in the garment industry. Although central government is wooing the foreign investors the investment is coming in the textile industry. In India places such as Bangalore, Mumbai, New Delhi and Tirupur are the hubs of textile garment industries. These manufacturers have ability to produce the entire range of woven wear and knitwear at low cost with reasonably good quality within the short notices.

The Indian textile industry has its own limitations such as accesses to latest technology and failures to meet global standards in the highly competitive export market. There is fierce competition from China, Bangladesh and Sri Lanka in the low price garment market. In the global market tariff and non-tariff barriers coupled with quota is posing major challenge to the Indian textile Industry. The environmental and social issues like child labor and personal safety norms are also some of the challenges for the textile industry in India. Currently the biggest threat is the enormous increase in cotton prices leading to high finished good prices. Consumers are therefore shifting their focus from cotton to man-made fibres. Further, increase in prices of other commodities such as coal, dyes and chemicals is also making the industry non-competitive. Further, increased competition due to surplus capacity in the country has resulted in pressure on margins due to price undercutting in the market.


The broader trends in the economy are expected to have a direct impact on your Companys growth prospects as well.

Inflation is expected to remain elevated for the foreseeable future, driven by war-induced commodity price increases and broadening price pressures. In addition, the anticipated increase in interest rates by Central Banks in the coming year are also expected to lower growth and exert pressure on economies particularly those in emerging markets.

In these circumstances, the ability to successfully navigate cost pressures would have a significant bearing on the overall performance of your Company. Diminishing purchasing power and demand due to the economic circumstances could result in fundamental shifts in consumer behaviours and adversely impact the market for textiles and apparel. Migration to value for-money options could also lead to reduced growth and profitability for your Company.


The Company has an internal control system, commensurate with the size, scale and complexity of its operations. This ensures that all transactions are authorized, recorded and reported correctly, and assets are safeguarded and protected against loss from unauthorized use or disposition. Your Company has adequate internal controls for its business processes across departments to ensure efficient operations, compliance with internal policies, applicable laws and regulations, protection of resources and assets and appropriate reporting of financial transactions.

The Company has Internal Audit function which is empowered to examine the adequacy and compliance with policies, and statutory requirements. It comprises of experienced professionals who conduct regular audits across the Companys operations.


The Indian textile industry requires support from both the Central and State governments to become competitive in the Global market. It is high time for the textile industry to upgrade their technology and implement ERP to streamline supply chain and enhance customer relations management activities. The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the last decade with the entry of several international players like Marks & Spencer, Guess and Next into the Indian market.

The organized apparel segment is expected to grow at a Compound Annual Growth Rate (CAGR) of more than 13 per cent over a 10-year period The Union Ministry of Textiles, which has set a target of doubling textile exports in 10 years, plans to enter into bilateral agreements with Africa and Australia along with working on a new textile policy to promote value addition, apart from finalizing guidelines for the revised Textile up gradation Fund Scheme (TUFS). The Indian textile and apparel industry has been adversely impacted in the short to mid-term due to lockdown and lower consumer spends. However, the Indian cotton textile industry is expected to showcase a stable growth in FY 2023-24, supported by stable input prices, healthy capacity utilization and steady domestic demand. High economic growth has resulted in higher disposable income.


Discussion of Financial Performance with respect to Operational Performance & Internal Control Systems and their Adequacy has been discussed in Directors Report.


The Company takes pride in the commitment, competence and dedication of its employees in all areas of the business. The Company is committed to nurturing, enhancing and retaining its top talent through superior learning and organizational development. This is a part of our Corporate HR function and is a critical pillar to support the organizations growth and its sustainability in the long run.

The company focuses on developing leadership skills, building talent for the future, and improving organizational & human capability through competency mapping of managerial positions in all areas of the Companys operations. The

Company is committed to provide the best environment to its employees to work and to inculcate a sense of ownership and pride.

Key Financial Ratios:

Sr. No

Particulars of Ratio

31.03.2023 31.03.2022
1. Debtors Turnover 10.75 9.33
2. Inventory Turnover 6.44 5.09
3. Interest Coverage Ratio (%) -20.36 -13.08
4. Current Ratio 1.75 1.15
5. Debt Equity Ratio -1.10 -1.23
6. Operating Profit Margin (%) -4.43 -3.39
7. Net Profit Margin (%) -17.31 -16.11
8. Return on Capital Employed 2.47 1.61


Statements in this Directors Report and Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

Important factors that could make difference to the Companys operations include raw material availability and its prices, cyclical demand and pricing in the Companys principle markets, changes in Government regulations, Tax regimes, economic developments, within India and the countries in which the Company conducts business and other ancillary factors. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Companys actual results, performance or achievements might differ materially from those either expressed or implied herein.