Cotton yarn manufacturers expect to spin 7-9% revenue growth this fiscal year.
Stable cotton yarn spreads and better cotton availability will support credit profiles
A rebound in exports and favorable domestic demand are expected to drive India's cotton yarn industry to a 7-9% revenue growth in the current fiscal year, up from a modest 2-4% growth in the previous fiscal year. An uptick in volumes will primarily drive this growth, supported by a modest increase in yarn prices.
Operating margins, after witnessing a recovery last fiscal year, are expected to see a further uptick of 50-100 bps this fiscal year, owing to stable cotton yarn spreads and better availability of cotton through the Cotton Corporation of India (CCI).