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