India's textile sector began FY27 on a stronger footing. The export-reliant sector saw an uptick in the June quarter (Q1FY27) earnings, with an aggregate Ebitda of 21 companies rising 34% year-on-year to ₹3,270 crore, and revenue increasing by 18% to ₹27,000 crore, aided by favourable developments in the global markets. Ebitda and revenue growth for these companies within the coverage of Motilal Oswal Financial Services, was just 2% each in FY26, impacted by tariffs-related uncertainties.
In Q1, Vardhman Textiles, Welspun Living and Arvind saw an Ebitda growth of 36-45% and revenue growth of 13-25%. The management commentaries after the results point to sustained momentum for the rest of FY27 with strong orders inflow. Motilal Oswal projects these companies to clock revenue and Ebitda growth of 14% and 27% CAGR over FY26-28. “The key monitorable include cotton prices, government export incentives, freight and fuel costs, the import-duty deadline on cotton, and incremental order flows from the US and Europe,” it noted.
The Q1 results come despite the disruptions due to the West Asia conflict, which led to a significant rise in logistics cost due to shipping delays and working capital issues.
Across segments, apparels grew over 20% year-on-year, aided by better demand and order visibility. Spinning revenues grew 15-20%, getting an impetus with increased yarn demand from China, leading to higher realizations. Prices are expected to remain firm, supported by lower cotton production in China and Xinjiang cotton restrictions. Home textile companies are emerging as key beneficiaries as global buyers shift beyond their sourcing base of Bangladesh, Vietnam, etc. due to expected gains from India's free trade agreements (FTAs) with the UK and EU, and tariff competitiveness in the US.
Home textile maker Welspun expects capacity utilization to remain above 80% in FY27, with doubling of US revenue from pillows.
Policy push
In the medium-term, the sector is expected to see a build-up of the manufacturing ecosystem, besides improving export competitiveness, helped by government’s revamped production-linked incentive (PLI) scheme. Government has shortlisted a total of 170 companies across the three rounds of the scheme, providing incentives of up to 15% of incremental turnover, with a total outlay of about ₹10,700 crore.
Shares of the sector firms have rallied on these prospects, with Arvind up over 70%, Welspun 44% and Vardhman up 38% being key outperformers so far in 2026. These stocks could remain in the limelight for now. A resolution of the ongoing West Asia conflict could offer a further push.