Cotton-duty relief and UK FTA put Raymond Lifestyle, Welspun Living in focus
A possible extension of the raw-cotton customs-duty exemption beyond October could lower input costs for textile makers. Jefferies has initiated Buy coverage on Welspun Living and Raymond Lifestyle, citing sourcing shifts, UK FTA-led tariff competitiveness, margin recovery and earnings potential.
What happened
Raymond Lifestyle · Potential extension of India’s raw-cotton customs-duty exemption could ease textile input costs. Jefferies initiated Buy coverage on Welspun
Key facts
- Customs-duty exemption on raw cotton may be extended beyond October 31 until December
- India-UK FTA entered into force on July 15, 2026
- KPR Mills target: Rs 1,200-1,224; potential Rs 1,360-1,400 in 1.5-2 months
- Jefferies Welspun Living target price: Rs 260 per share
- Jefferies Raymond Lifestyle target price: Rs 900 per share
- Welspun Living FY26-FY29E revenue CAGR: 14%
- Welspun Living FY26-FY29E EBITDA CAGR: 38%
- Welspun Living FY26-FY29E PAT CAGR: 71%
- Welspun Living ROCE improvement: about 13 percentage points to 19%
- Raymond Lifestyle FY26-FY29E EPS CAGR: 23%
- Raymond Lifestyle valuation: about 6x one-year forward EV/EBITDA
Why this matters
The improving policy and export backdrop may raise the strategic value of India-based textile sourcing, partnerships and capacity investments aimed at UK-facing demand.
What to watch
- Government notification extending the raw-cotton customs-duty exemption beyond October and its exact scope.
- UK-India FTA ratification timeline, tariff schedules, rules-of-origin requirements and implementation date.
- Monthly cotton prices, domestic-versus-import cotton spreads and company commentary on inventory costs.
- UK and US retailer inventory trends, order-book visibility and export-volume growth.
- Quarterly gross-margin progression, capacity utilization, export share and management guidance from Welspun Living and Raymond Lifestyle.
- Evidence of sourcing diversification orders from global retailers and brands.
- Textile exporters may lock in cotton inventory and forward contracts while input-cost relief is available.
- Companies with UK-facing home-textile, bed-linen and apparel exposure may increase buyer outreach, bids and capacity utilization plans.
- Brokerage upgrades and improved earnings estimates could draw incremental institutional interest toward export-oriented textile names.
- Domestic peers without comparable export mix or sourcing flexibility may face relative valuation pressure.