Textile shares to rally? Emkay sees sector at inflection level to regain misplaced glory, initiates ‘Purchase’ name on 3 shares
In its report, Emkay International mentioned India has misplaced market share within the world attire commerce, which has been stagnant at 3-4% over the previous 15 years. Nonetheless, it believes that the sector might quickly see a turnaround led by a strengthening home MMF ecosystem, free commerce agreements (FTA) with main economies, 7-8% US tariff hole in comparison with China, beneficial regulatory taxes, sturdy company stability sheets and the fastest-growing home attire market.
The brokerage highlighted that Indian textile and attire producers have largely emerged unscathed from a number of shocks just like the COVID-19 pandemic, Russia-Ukraine warfare, hostile US tariffs and extra. “We consider the continued West Asia disaster, too, could have a short-term influence on margins (increased power, logistics prices), which ought to see a pointy restoration on attaining normalcy. Backed by a strong home market, beneficial USD-INR charge, and a robust stability sheet, we consider home gamers would have the ability to take up future shocks too,” it mentioned.
Emkay known as spinners a gorgeous class, citing a number of tailwinds. USDA has mentioned that world cotton demand will outpace provide within the upcoming season as cotton manufacturing is prone to be hit by the mega El Nino influence, decrease water reservoir ranges and different elements. This has already resulted in rising cotton costs. “Given the seemingly world cotton scarcity, we anticipate yarn spreads to at the very least be rangebound at present ranges within the close to time period,” Emkay mentioned.
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Technical textiles, in the meantime, are the dawn phase, in keeping with the brokerage. These textiles discover use in packaging supplies, defence uniforms or gear, auto interiors, industrial ropes and nets, and many others. They get pleasure from superior working margins of 15-30%. “Technical textiles’ home market measurement noticed 7-8% CAGR over FY20-26P; we anticipate this to extend to early-double digits over the following 5Y, primarily on the again of 1) a number of FTAs; 2) tariff differential vs China; 3) ecosystem enhance led by PLIs and PM MITRA parks; and 4) GST cuts on MMF fibers and yarns to five% (from 12%),” Emkay mentioned.
Emkay on Arvind share worth
Emkay initiated protection on Arvind shares with a ‘Purchase’ name and a goal worth of Rs 700 apiece. This suggests an upside potential of almost 42% from the inventory’s earlier closing worth of Rs 493.70 apiece on NSE.
The shares of the corporate have gained 5% in a single week, 15% in a single month and 57% in 2026 thus far, bucking the general market downtrend.
Emkay on Nitin Spinners
Nitin Spinners additionally received a ‘Purchase’ ranking from Emkay, which assigned a goal worth of Rs 750 apiece for the inventory. This suggests an upside potential of 40% from the earlier closing worth.The shares of Nitin Spinners have jumped 6% in 5 days and 12% in a single month. The inventory general gained 69% in 2026 thus far.
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Emkay on Sanathan Textiles
Emkay has a ‘Purchase’ name for the shares of Sanathan Textiles, with a goal worth of Rs 550 apiece. This suggests an upside potential of 39% from the earlier closing worth.
The shares of the corporate tumbled greater than 9% in a single month, and are down 5% in 2026 thus far.
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(Disclaimer: Suggestions, strategies, views and opinions given by the specialists are their very own. These don’t characterize the views of The Financial Occasions)
