Indian Textile Industry 2013
India is world’s second largest producer of textile and apparel after China. China is slowly reducing its focus on textiles and this has had a positive impact on the Indian textile and apparel industry. But not everything in the garden is rosy as Bangladesh, Vietnam and Turkey’s emerging textile industries are capturing a large portion of the global demand. India recently lost its second position in the apparel export market to Bangladesh, which managed to capture a large piece of the US and the Europe demand.
The Indian textile industry continue to be the second largest employment generating sector after agriculture for both skilled and unskilled labor. India is the largest producer of Jute, second largest producer of cotton, silk and cellulosic fibres/yarns and fourth largest producer of synthetic fibres/yarns.
Some of the key drivers for this industry include:
- Strong raw material production base
- Vast pool of skilled, unskilled and cheap labor
- Good export potential with high global demand
- Growing domestic demand
As per statistics from Ministry of Textiles, the Indian industry can be valued at Rs.5 lakh crores with 1.7 lakh crore of exports in FY12. The industry is expected to grow at an annual rate of 10% the next decade.
Valuation of Textile Companies
Company |
EV/EBITDA (ttm) |
EV/Sales (ttm) |
Titan Industries |
27.9x |
2.6x |
Page Industries |
25.1x |
5.3x |
Bombay Rayon Fashion |
4.2x |
1.0x |
Raymond |
9.2x |
1.1x |
Bombay Dyeing |
11.3x |
1.5x |
Industry Median |
6.4x |
0.5x |
Industry median includes Gitanjali Gems, Rajesh Exports, PC Jeweller, Jaybharat Textiles And Real Estate, Arvind, Tuni Textile Mills, Vardhman Textiles, VIP Industries, SRF, Rupa & Company, Alok Industries, JBF Industries, Mandhana Industries, Kewal Kiran Clothing, Goenka Diamond and Jewels, LS Industries, Shree Ganesh Jewellery House, SRS, Polygenta Technologies, Lovable Lingerie, Tara Jewels, Welspun India, Shree Ram Urban Infrastructure,, C. Mahendra Exports, Shrenuj & Company, K.P.R. Mill , KSL and Industries, Himatsingka Seide, Vaibhav Global, Kanani Industries, Indo Rama Synthetics India, S. Kumars Nationwide, Jindal Cotex, Zodiac Clothing Company, Winsome Diamonds and Jewellery, Visagar Polytex, Sudar Industries, Maharaja Shree Umaid Mills, Suashish Diamonds, Kitex Garments, Siyaram Silk Mills, Century Enka, Trident, Jindal Worldwide, The Ruby Mills, Gokaldas Exports, Pearl Global Industries, Sutlej Textiles and Industries, Nahar Spinning Mills, Nakoda, RSWM, Garden Silks Mills, Shri Lakshmi Cotsyn, Timex Group India
Key Mergers & Acquisitions in Textile Industry
Period | Target | Acquirer | EV | EV/EBITDA (ttm) |
Apr-11 | Bombay Rayon Fashions | AAA United BV | 2296 | 12.8x |
Jun-08 | Reid & Taylor (India) | Indivest Pte Ltd | 874 | 27.0x |
Aug-07 | Gokaldas Exports | Blackstone Group L.P. | 301 | 9.9x |
Feb-06 | Indo Rama Textiles | Spentex Industries Ltd | 60 | 7.5x |
Median | 11.4x |
End Notes
Source: Analyst Reports, Company Press Releases, Yahoo Finance
FY: Financial Year ending March
All multiples are as on Dec 31st 2012
Conversion Rate: 1 USD = 50 INR
ttm: trailing twelve months, or last twelve months
EBITDA: Earnings Before Interest, Taxes, Depreciation & Amortization - a measure of company’s profitability
EV: Enterprise Value - a measure of company’s worth