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The Textile Magazine
MARCH 2012
Readymade garment exporters
undeterred by business slowdown
industry update
However, CRISIL believes that its rated players will
continue to outpace the industry on growth as in the
past, despite the fact that they derive 80 per cent of their
revenues from exports. Their established customer rela-
tionships, cost efficiencies, and stable financial risk pro-
files will continue to drive their resilience to slowdown
in business.
The RMG industry is highly fragmented and is ex-
posed to risks relating to small scale of operations and
customer concentration. Dependence on overseas (espe-
cially EU- and US-based) customers increases the in-
dustry’s vulnerability to the global economic conditions
and to fluctuations in currency rates. CRISIL-rated enti-
ties have, nevertheless, maintained a compound annual
growth rate of 16 per cent – twice that of the industry
– in the five years through March 2011.
Says Mr. Gurpreet Chhatwal, Director, CRISIL Rat-
ings: “We expect the rated players to buck the industry
trends and maintain growth of 4 to 5 per cent over the
medium term, supported by their ability to closely align
A CRISIL study of 181 readymade garment (RMG) players rated
by it – accounting for a fifth of India’s RMG exports by value – re-
veals that these players are well equipped to tide over the chal-
lenges posed by the uncertain business environment. The ongoing
economic crisis, and the resultant dip in demand, especially in the
Eurozone, a major export destination for RMG, may constrain rev-
enue growth for most RMG exporters.