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Motilal Oswal backs Arvind, Gokaldas and Indo Count on textile growth outlook
Our read
Indian listed textile exporters are likely to see earnings recover faster than headline sales as stable cotton prices and utilisation gains drive operating leverage, with market-share gains concentrated in scaled suppliers such as Arvind, Gokaldas Exports and Indo Count.
For operators
Stabilising cotton costs and recovering export demand create room for Indian textile operators to rebuild margins, but freight, incentives and Western order trends remain critical execution risks.
Watch
Monthly US and European apparel and home-furnishing retail sales, import volumes and retailer inventory-to-sales ratios.
The report,
Motilal Oswal expects Indian textiles to sustain growth and margin recovery as cotton prices stabilise. It prefers Arvind and Gokaldas Exports in apparel and Indo Count Industries in home textiles, while flagging export incentives, freight, fuel and US-Europe order flows.
Newer report , , Apparel Resources India : Arvind reports 87% sustainable cotton sourcing in FY26
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Reported figures
From the report. Source details below
| Last-decade topline, EBITDA and PAT growth of 6%, 4% and | 3% |
|---|---|
| FY26-28 coverage growth estimates: | 14% topline, 27% EBITDA and 38% PAT |
Also in the report
- ~18% YoY textile-sector growth in Q1 FY27
- ~18-20% expected sector growth
- 10-year mean valuation of 24x P/E and 14x EV/Ebitda
- 7-10% premium to mean EV/Ebitda and P/E multiples
Why it matters to operators and investors
Improving sector economics may make apparel and home-textile capacity, sourcing partnerships and export-led acquisitions more attractive, particularly for companies with differentiated US and European customer access.
What to watch next
- Cotton prices, yarn spreads, polyester prices and INR/USD movement relative to contracted export pricing.
- Freight and container rates on India-US and India-Europe routes.
- Management commentary on order books, capacity utilisation, buyer consolidation and pricing negotiations.
- Indian export-incentive, duty-remission and trade-agreement developments, especially tariff competitiveness versus Bangladesh, Vietnam and China.
- US/EU consumer confidence, housing activity and discretionary-spending trends, which disproportionately affect home textiles and apparel.
Likely next moves
Our read of what comes next — analysis, not reported by the source.
- Prioritise customer diversification and deepen direct relationships with US and European retailers to capture replenishment-led order growth.
- Lock in cotton and foreign-exchange exposure selectively, preserving upside from stable inputs while reducing margin volatility.
- Increase utilisation before committing to large capacity additions; target productivity, automation and value-added product mix to convert volume growth into operating leverage.
- Home-textile suppliers should pursue premium bedding, sustainability-certified products and faster replenishment programs, where retailer switching costs are higher.
- Apparel exporters should use stronger order visibility to win share from smaller vendors facing financing, compliance or scale constraints.
The counter-case
The case against this reading — not reported by the source.
The thesis depends on a benign combination of stable cotton costs, recovering export demand and improved pricing power—conditions that can reverse quickly. Indian exporters remain exposed to weak discretionary spending in the US and Europe, retailer inventory corrections, freight volatility, currency moves and intensifying competition from Bangladesh, Vietnam and China. Any rise in cotton prices, wage costs or discounting could prevent the projected margin recovery. Arvind also has business-mix complexity beyond apparel, while Gokaldas and Indo Count have meaningful customer and geography concentration risks.
The source
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