The textile industry is one of the oldest industries in India, dating back several centuries. The textile sector is one of the largest contributors to India’s export growth and employs around 45 million people directly and 20 million people indirectly. The Indian textile industry is currently estimated at around US$120 billion and is expected to reach US$230 billion within the next few years. It contributes to around 2% of the country’s GDP, 10% of the manufacturing production and 14% of the overall Index of Industrial Production. The future of the Indian textile industry looks extremely promising, buoyed by both strong domestic consumption as well as export demand. The domestic market for apparel and lifestyle products is currently estimated at US$85 billion and should reach US$150 billion in the next five years. As the country’s economy grows, the per capita income should also grow, resulting in consumers spending more money on fashion products. The innerwear category is one of the high growth areas in the apparel market and promises huge growth opportunities. Increase in income levels, along with higher discretionary spending, growing fashion orientation of consumers and product innovation has turned innerwear category from being a traditional utilisation item into an essential fashion requirement. The Indian innerwear market, which is currently worth around Rs 20,000cr is estimated to grow by 12% to reach Rs 68,000cr in the next five years. The innerwear market had traditionally been largely unorganised but is now transforming and showing preference for products from the organised sector. Apart from leading domestic innerwear players like Page Industries, Rupa, Dollar, VIP, Lovable Longerie, etc., major foreign brands are gearing up to catch a larger slice of the premium and ultra premium market. All these have opened up unprecedented retail market opportunities. The Indian consumer, which comprises the largest Gen Y population of the world with a median age of 27 years, is also evolving in its shopping habits and buying behaviour. As people are shifting from rural to urban areas in search of jobs and better education, the new Indian consumer is opting for branded apparel over unbranded due to inclination towards better lifestyle and willingness to try out latest fashion products. Page Industries Ltd is one of the companies from the readymade apparel space, which we like very much. Its iconic Jockey brand in the innerwear category is transforming the space and eliciting huge response from the consumer. Though the stock valuation seems slightly stretched for Page Industries Ltd, which is currently quoting at Rs 34,000 on the Indian bourses, most analysts and brokers are bullish on the stock. They expect a bonus issue and a stock split from the company in the next one year, plus excellent financial results. This should result in Page Industries giving a 25% price appreciation in the next one year from the current market price.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.