The Second Largest Textile Manufacturer in the world is in trouble Bangladesh
A Golden Opportunity for India’s Textile Sector ??
4 Stocks which can benefit from this
1. What is the Bangladesh Crisis?
Amid violent political unrest, Bangladesh’s textile sector is in turmoil. The protests, sparked by a government-introduced job quota, have led to widespread anti-government riots across the country, resulting in significant suffering. With Prime Minister Sheikh Hasina resigning and fleeing the country amidst the major outbreak of violence, hundreds have been killed or injured.
2.Opportunity for India:
Their loss, our gain?
Industry experts predict an additional $300-400 million in monthly textile business for India if just 10-11% of Bangladesh’s exports shift. This could significantly boost hubs like Tiruppur
3. How the base can be shifted to a Village in Tamil Nadu: Tiruppur?
Known as the “Knitwear Capital of India,” Tiruppur is prepared to handle the surge.
👚Dominant in Knitwear: Tiruppur contributes a staggering 90% of India’s knitwear exports.
👚Economic Powerhouse: It’s home to around 10,000 garment manufacturing units, employing over 600,000 workers.
👚Exports: Tirupur accounted for a significant 54.2% of India’s textile exports in FY22.
👚Global Reach: The town’s products are exported to over 100 countries, making it a global player in the textile market.👚👗👔👖
4. Market Dynamics:
Bangladesh’s monthly apparel export stands at $3.5-3.8 billion. With current exports ranging from $1.3-1.5 billion per month, India is well-equipped to absorb redirected orders.
5.Shift in Manufacturing Bases:
With 25% of Bangladesh’s textile units owned by Indians, many are expected to relocate to India. This shift could stabilize global supply chains, especially ahead of the Christmas season.
6. Rationale:
Due to cheap labor and favourable incentives, Bangladesh, a global textile hub (Second Largest textile producer) hosts fast-fashion giants like H&M, Zara, and GAP. These brands, needing quick manufacturing for new designs, seek a Bangladesh+1 alternative. India, with its robust infrastructure, is the perfect choice.
7. Stock#1: Nitin Spinners Ltd
– M.Cap: ₹ 2,484 Cr.
– P/E: 17.2
– CMP: ₹ 442
– Info:58% Revenue is currently through the means of exports
8.Stock#2 : Welspun Living Ltd
– M.Cap: ₹ 18,338 Cr.
– P/E:26.6
– CMP: ₹ 189
– Info:USA accounts for nearly 67% of its sales and has huge partnerships with global brands like Walmart,Tesco,Amazon,Macy’s etc.
9.Stock #3: S P Apparels Ltd
– M.Cap: ₹ 2,296 Cr.
– P/E: 25.6
– CMP: ₹ 915
– Info: The company earns nearly 86% of its revenue through the source of exports.
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