Textile stocks Gokaldas, Indo Count, PDS, Filatex soar up to 6%; here's why

Textile companies share price movement Shares of textile companies were trading higher up to 6 per cent on the BSE in Wednesday’s intraday deals on expectations of an improvement in the demand outlook. Indo Count Industries, Gokaldas Exports, PDS, Filatex India and Pearl Global Industries rallied between 3-6 per cent on the BSE in intraday deals. In comparison, the BSE Sensex was down 0.08 per cent at 72,974 at 11:24 AM.

In the past month, the stock price of Pearl Global, Indo Count and Filatex surged in the range of 10-36 per cent, against a 1.4 per cent fall in the benchmark index. In the June quarter (Q1FY27) earnings call, Indo Count said the company was well-positioned to capture the next phase of global home textile growth, combining trusted quality, sustainability, strong brands and increasing direct consumer connect. Looking further ahead, the company remains committed to its ₹8,000 crore revenue aspiration by the calendar year 2028, supported by continued core business growth and its $275 million new business ambitions.

Motilal Oswal Financial Services view on textile sector The textile sector has outperformed the broader market in the past six months, and analysts at Motilal Oswal Financial Services expect industry demand to grow in the mid-teens for the full year, supported by a favourable low base. Key monitorables include cotton prices, government export incentives, freight and fuel costs, the deadline for duty-free cotton imports, and incremental order flows from the US and Europe. ALSO READ: Stock Market LIVE: Sensex stuck in range, Nifty tops 22,700; Sept WPI at 11.39% According to the brokerage firm, historically, its textile coverage universe traded at a 10-year mean (30 per cent premium) valuation of 24x P/E and 14x EV/EBITDA (enterprise value/ earnings before interest, tax, depreciation and amortization), despite revenue, EBITDA and profit after tax (PAT) growth of only 6 per cent, 4 per cent and 3 per cent, respectively.

With improved growth visibility, analysts expect the coverage universe to deliver a compound annual growth rate (CAGR) of 14 per cent in revenue, 27 per cent in EBITDA and 38 per cent in PAT over FY26-28E. “Within our coverage, we prefer Gokaldas Exports, Pearl Global & Arvind in apparels, and Indo Count in home textiles. While we remain positive on the sector's long-term fundamentals, we expect the broader textile space to remain range-bound in the near term, with performance likely to remain stock-specific.

We see scope for renewed sector momentum once the India-EU free trade agreement (FTA) is finalized, given the potential improvement in India's export competitiveness and market access,” MOFSL said. JM Financial Institutional Securities view on textile sector Indian textile players continue to see a broadly improving demand environment, with export markets showing healthy order momentum and retailers increasingly shifting sourcing towards India. US demand remains resilient, while improving traction in the UK and Europe and recent trade developments are creating a more favourable outlook for Indian exporters.

Lower inventory levels at global value retailers and continued demand for value apparel also provide a supportive backdrop, although tariff-related uncertainty remains a key near-term monitor, according to analysts at JM Financial Institutional Securities. Encouragingly, the companies are seeing stronger order books, improving utilisation and greater visibility across both textile and technical-textile businesses. The combination of resilient end-demand, inventory normalisation and diversification of global sourcing towards India should support export growth, with recent trade agreements and tariff developments potentially providing an additional structural tailwind, the brokerage firm said.

Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.