Best Textile Sector Stocks to Invest in India

  • 10 May 2024
  • Read 22 mins read

India's textile industry, one of the world's largest, is a major player in cotton, jute, and silk production, with India ranking second in silk production worldwide. The sector contributes significantly to India's economy, accounting for 2.3% of GDP, 13% of the industrial output, and 12% of total export earnings. The industry, dating back centuries, showcases a diverse range of products, from traditional hand-spun textiles to modern, capital-intensive mills. India's textile industry primarily comprises decentralised power looms, hosiery, and knitting, closely linked to agriculture for sourcing raw materials like cotton. India's rich cultural heritage and traditions in textiles make the industry unique. India's textile exports are projected to reach $190 billion by 2025-26. This blog will explore some of the best textile sector stocks listed in NSE.

Top 10 Textile Companies in India

Read on to find out more about the top 10 textile companies listed in NSE in the stock market. 

Company NameMarket Cap (in Cr)Share PriceClose Price
Vedant Fashions Ltd₹230.24 billion₹950.00₹1,368.15
Orbit Exports Ltd₹4.39 billion₹166.15₹183.45
Voith Paper Fabrics India Ltd₹8.66 billion₹1,971.05₹1,830.50
MK Exim (India) Ltd₹3.42 billion₹84.25₹115.70
Bhilwara Spinners Ltd₹1.13 billion₹125.00₹75.75
Soma Textiles & Industries Ltd₹1.27 billion₹38.30₹19.75
Paras Petrofils Ltd₹1.30 billion₹3.90₹2.40
Kandagiri Spinning Mills Ltd₹84.68 million₹21.94₹21.10
Padam Cotton Yarns Ltd₹35.40₹35.40₹56.00
Delta Industrial Resources Ltd₹41.63 ₹41.63 ₹17.36

Disclaimer: The market capitalisation mentioned above is accurate as of the date, 23rd April 2024. However, you must do your homework before buying any of these stocks.

 

Top Textile Stocks in India

Here are some of the top textile stocks overviews:

  • Vedant Fashions Ltd

    Vedant Fashions Ltd., an Indian textile firm founded in 1971 by Mr Ratan Jindal, produces and exports textiles and clothing. The firm is financially strong and has a market capitalisation of ₹23,070.21 crores, as indicated by its trailing 12-month price-to-earnings ratio of 56.59 and price-to-book ratio of 16.00.
  • Orbit Exports Ltd

    Orbit Exports is one of the global textile penny stocks that exports a diverse range of textiles and clothing, prioritising quality and creativity bolstered by its strong global market position. With a market capitalisation of ₹438.50 crores, Orbit Exports is a profitable company with a trailing twelve-month price-to-earnings ratio of 14.24 and a fair price-to-book ratio of 2.05. However, it's a negative PEG. The ratio of -9.07 suggests a potential mismatch between profits and market expectations.
  • Voith Paper Fabrics India Ltd

    Voith Paper Fabrics India is a leading provider of paper fabrics and related products, offering advanced solutions to the paper industry. It boasts a market capitalisation of ₹879.28 crores, a Price-to-Book ratio of 2.77, and a PE ratio of 22.72, highlighting its solid financial performance in the sector.
  • MK Exim (India) Ltd

    MK Exim (India) Ltd is a leading global marketing company in Indian textiles, exporting textiles and apparel to international markets. With a market value of ₹331.58 crore, the company's profitability is evident through a trailing twelve-month Price-to-Earnings ratio of 19.75 and a Price-to-Book ratio of 5.01. The company's PEG. A ratio of 0.10 suggests potential undervaluation compared to its profit growth.
  • Bhilwara Spinners Ltd

    Bhilwara Spinners, a leading spinning company, produces high-quality yarns for domestic and international markets. With a market capitalisation of ₹113.62 crore, it has a trailing 12-month price-to-earnings ratio of 34.92 and a price-to-book ratio of 3.15. However, its negative PEG, a ratio of -1.23, suggests a potential mismatch between profits and market expectations, requiring further research into its prospects and strategies.
  • Soma Textiles & Industries Ltd Renowned for a broad range of yarns and fabrics, Soma Textiles is a well-known brand in the textile production industry. The company's market capitalisation of ₹120.57 crores highlights its importance within the industry. Given that the business's Price-to-Book ratio of 1.60 indicates a decent value, investors looking to take advantage of possibilities in the textile sector may find the company appealing.

  • Paras Petrofils Ltd

    Paras Petrofils focuses on producing polyester films and yarns. The company's ₹125.33 crore market capitalisation reflects its place in the industry. Its trailing-twelve-month price-to-earnings ratio of 125.79 shows its profitability, while its price-to-book ratio of 5.21 shows how valuable the company's possessions are. It's negative, PEG. A ratio of -4.54, however, increases the possibility of a mismatch between profit growth and market expectations.
  • Kandagiri Spinning Mills Ltd

    A major participant in the spinning sector, Kandagiri Spinning Mills is entirely devoted to creating exceptional cotton yarns. The company's ₹8.47 crore market capitalisation shows its importance in the marketplace. The negative PEG, regardless of its negative Price-to-profits ratio of -12.03 and Trailing Twelve Months Earnings Per Share (EPS) ratio of -1.91 suggests a possible depreciation with its profits growth and of -1.83, which are both indicative of recent losses. Investors must research the company's financial performance and prospects before making investment decisions.
  • Padam Cotton Yarns Ltd

    Padam Cotton Yarns Ltd is one of the premier textile penny stocks listed and focuses on the manufacturing and shipping of cotton yarns. The business values assurance of quality and client satisfaction above everything else. With a ₹13.71 crore market value, the firm establishes itself in the sector. Its trailing twelve-month earnings per share (EPS) of -1.83 and negative Price-to-Earnings ratio of -7.82, which imply recent losses, contrast with the positive PE ratio of 2.87, which suggests a possible turnaround or improvement.
  • Delta Industrial Resources Ltd

    Delta Industrial Resources Ltd is involved in several textile-related operations, among the most notable of which are fabric manufacturing and export. The company's ₹22.45 crore market capitalisation indicates its importance in the sector. The company's positive PE ratio of 4.47 indicates a possible turnaround or improvement in its financial performance despite its negative Price-to-Earnings ratio of -124.18 and Trailing Twelve-Month Earnings Per Share (EPS) of 0.34, which is suggestive of recent losses.

The Indian Textile Industry

India had one of the biggest textile industries in the world during the British colonial era, shipping textiles to several countries. Yet the sector faced several difficulties following independence, such as the need for modernisation and competition from synthetic fabrics.

The textile sector currently produces around 17% of export revenue and 14% of the nation's industrial output. Investors can look over a textile sector share list for the textile industry to find possible companies to invest in. 

There are several different segments within the Indian textile penny stocks list, including cotton, silk, jute, wool, and synthetic fibres. The sector, which generates around 70% of all textiles, is largely dominated by the cotton textile industry. The textile industry for silk and synthetic substances are other important sectors.

The Indian government is implementing several projects to further develop the textile sector in India. One of these programs, the Amended Technology Upgradation Fund Scheme (ATUFS), provides financial support to textile firms to update their machines and equipment. The Integrated Textile Park (ITP) program aims to create textile parks that offer infrastructure and support services to businesses in the textile sector.

How to Identify the Best Textile Stocks to Buy in India?

It takes thorough analysis and research to identify which Indian textile stocks are the highest investments. Here are five important aspects to consider before buying.  

  • Financial Success and Medical Care:

    Analyse textile companies' financial achievements by investigating important financial metrics like return on equity, profit margins, and sales growth.
  • The Marketplace Share and Industry Placement:

    Find out where the firm stands in the textile sector. Economies of scale are likely to favour businesses with significant market shares and an edge over competitors.
  • Management Quality and Corporate Governance:

    Analyse the performance history and strategic choices made by the management unit. A business with a history of good management practices and a transparent governance structure is more capable of tackling obstacles and generating long-term shareholder value.
  • Chain of Custody Connectivity and Diversification:

    Consider businesses with various products and a seamless chain of custody. A company engaged in vertical integration can benefit from lower costs and improved quality control at several points in the textile production process.
  • Patterns in Domestic Textiles and Demand Worldwide:

    Keep updated on domestic and worldwide textile demand developments. Long-term success is more likely for businesses that explore foreign markets, adjust to shifting consumer tastes, and invest in technology to improve product quality and innovation.

Factors to Consider Before Investing in Textile Stocks in India

To make sound decisions, it's important to consider a variety of demands before investing in Indian textile stocks. 

  • Market Dynamics and Patterns:

    Investigate the textile sector's general marketplace conditions and patterns. Study local and international economic scenarios, textile demand, and new consumer preference patterns.
  • Company's Financial Health:

    Evaluate the textile company's economic health by studying its financial accounts. Consider measures like return on equity, profit margins, debt levels, and sales growth. A financially stable firm is more likely to succeed over a lengthy period.
  • Leaders Efficiency:

    Consider the management group's experience, track record, and strategic vision. Businesses with a track record of sensible decision-making and strong leadership are better positioned to handle obstacles.
  • Positioning in the Industry and Competition:

    Evaluate the company's place within the textile sector and its competition level. Consider its market share, advantages over competitors, and capacity to change. Businesses with the upper hand in the market have the potential for further development.

How to Invest in Textile Stocks in India?

Investing in Textile stocks in India is a fairly simple process. Below are the steps you should follow:

  • Using your demat account choose the Indian textile equities through individual firms listed on stock exchanges such as the NSE and BSE. 
  • You can also choose textile-focused mutual funds or ETFs that provide more diverse possibilities. 
  • Remember, indirect exposure can be obtained by investing in adjacent firms throughout the textile supply chain, such as cotton producers or machinery manufacturers. 
  • Remember to research and assess your investing objectives and risk tolerance before executing your purchase order.

Factors Affecting Textile Sector Stocks

Considering the major effect on the economy of the entire country, diversifying investment in Indian textile industries could represent an appropriate option for a lot of individuals. Thus, before moving on, let's go over a few of the factors that are affecting textile stocks. 
 

  • The Rates for Raw Supplies:

    Cotton, silk, and synthetic fibres are examples of costly raw materials. These factors can have a direct effect on the profitability of companies who manufacture textiles, which in effect, can have an impact on the prices of textile shares and stocks.
  • Foreign Exchange Rates:

    The costs of importing raw materials may vary according to the value of the Indian rupee compared to other currencies. As a result, the money received from exporting finished items impacts the share prices and profitability of textile companies.
  • Policies within the Government:

    Trade, tax, and regulation policies might affect a company's profitability and share prices in the textile industry. For example, variations to import/export policies may affect the price and availability of raw materials, whereas adjustments to tax laws may affect manufacturing costs and profitability.
  • Overseas Industry Terms:

    The total amount of money that textile manufacturing companies make may be impacted by the possible demand for their products in foreign markets. The selling prices of textile companies decline as a result.

Types of Textile Sector Stocks

Stocks held by companies involved in the textile sector are often called textile stocks. The organisation's production of textile-related goods might be utilised to organise these stocks. Following is a list of the textile stock categories:

  • Textile Stocks Identified in Cotton:

    Industries that manufacture textiles from cotton are linked to the top textile stocks to purchase in India. Cotton is one of the principal raw materials used by textile industry businesses. Several variables, including cotton prices and availability, may have affected these stocks.
  • Textile Stocks using Synthetic and Blended Fibres:

    Companies that manufacture textiles using synthetic fibres or a combination of synthetic and natural fibres. These textile stocks can be impacted by variables such as customer demand, technical improvements, and raw material prices.
  • Apparel Shares:

    These textile sector shares are associated with companies that produce completed clothes, such as dresses, shirts, and pants. Numerous factors, including manufacturing, fashion trends, and consumer demand, might impact these textile shares.
  • Technology Textiles Shares:

    These are linked to textile manufacturing companies. They are useful in industrial settings for textile products such as automotive, geotextile, and medical applications.
  • Homes Textiles Stocks:

    These top textile stocks include companies that manufacture textiles. These businesses make the fabrics used in curtains, towels, and other home furnishings.

Why Should You Invest in Textile Sector Stocks?

India has the greatest textile sector in the world when it comes to spindles installed for spinning yarn. Therefore, you must have a Demat account to invest in Indian textile sector firms and get a significant return on investment. Let's explore them.  

  • Advancement Possibilities: Several reasons contribute to India's significant development potential for textile brands. Such as changing consumer preferences, increased disposable income, and population growth.
  • Transfer Opportunities: Indian textile companies can grow and are already well-established in foreign markets. Investing in textile equities may expose investors to this export potential. 
  • Portfolio diversification: This could possibly be accomplished via investing in textile sector businesses because these stocks do not have a strong correlation with other industries. 
  • Capability for adapting to financial Patterns: Companies in the textile sector have the potential to deal with economic fluctuations with an adequate amount of flexibility. Even in times of economic downturn, there is typically an ongoing market for textile items. 
  • Popularity and Status: Many Indian textile enterprises are recognised names with a solid record of producing high-quality goods. This provides a competitive edge and may encourage an increase in stock price. 

However, investors should conduct an independent study before deciding to invest and/or speak with a financial professional.

Are There Any Challenges in the Textile Sector Stocks in India?

Since any investment opportunity involves risk, it is essential to consider all factors. As a result, we've outlined the primary obstacles to investing in the textile industry below.  

  • Shifts in Demand:

    Shifts in demand may affect the revenues and profitability of the Indian textile sector, which in response can affect the price of textile shares. Thus, having access to investment ideas and portfolios that are expertly chosen and focused on companies that can weather market swings can be beneficial.
  • Competitors from Other Nations Participants:

    The Indian textile industry faces competition from a range of countries, including Bangladesh, China, and Vietnam, which provide the same goods at less money. These nations can affect the potential for exporting goods, the financial success, and the share prices of Indian textile enterprises. To avoid international competition, you might thereby directly invest in businesses that have a well-known brand, loyal consumers, and differentiated product offers.
  • Dependency Upon Policies and Regulations:

    The government's trade, tax, and regulatory policies have had a major effect on the textile sector. A textile company's earnings may depend on changes in the price of its shares, the cost of manufacturing, the availability of raw materials, and its export potential.

Conclusion
Given the rising consumption and distinct moats of textile manufacturing businesses, textile sector stocks might provide an excellent chance to invest in the finest textile stocks in India. Thus, investing in textile stocks may be a progressive and successful way to diversify your portfolio. This might also benefit India's developing textile sector. Choose a reliable stock market app for better understanding.

However, before making any decisions, you should conduct careful research and contact a financial expert.

FAQs on Textile Industry Sector Stocks

A recovery in post-pandemic spending by consumers, more efficiency, beneficial government policies, and increased domestic and foreign demand might potentially contribute to an increase in textile holdings.

The textile industry faces intense competition from low-cost nations, affecting profit margins, and grappling with customer preferences, environmental regulations, and fluctuating raw material prices.

The textile sector is poised for growth with the integration of advanced technologies and a growing emphasis on sustainable practices, enhancing efficiency and productivity.

The textile market is a vital global economy, providing employment, contributing to GDP, and serving as a gauge of economic health by reflecting consumer spending and industrial activity.

Textile stocks are cyclical due to their fluctuating performance with economic cycles, indicating a continuous need for investors to monitor market trends and anticipate demand shifts.