The revival in export demand has enabled large spinning companies report a comfortable volumetric growth of 5% year-on-year in the first quarter of FY19, which together with a 7% year-on-year increase in average yarn realisations to Rs 211/kg has translated into a growth of 12% in sales turnover during the quarter, said an Icra analysis on Monday.
The growth rate appears comfortable, when viewed in comparison to a growth of 5-6% reported by the sample during FY17 and FY18 amid multiple demand-side pressures. The aggregate operating margins also improved to 12.2% in first quarter of FY19 vis-a-vis 11.6% in fourth quarter of FY18, after having remained subdued at 9-11% during the preceding four quarters.
While the strong growth of 56% in cotton yarn exports during 4M FY19 driven by a more than two-fold increase in exports to China, is partly attributable to the low base effect, as exports were down by 56% year-on-year in 4M FY18, it has also been driven by competitive Indian cotton and yarn prices.
Source: www.msn.com