The apparel IIP in June 2019 was 162, which is 1 percent lower than that in May 2019. The index has declined for three consecutive months. The apparel CPI has remained constant for the past three months at a value of 149. The apparel exports in June 2019 stood at $1,233 mn, showing a decrease of 9 percent from June 2018. Apparel exports to Saudi Arab have shown the highest growth (56 percent); exports to largest market USA also increased by 7 percent in Apr-Jun 2019 as compared to Apr-Jun 2018. However, the apparel exports to other major markets have declined.
The apparel imports in June 2019 stood at $78 mn, which is 7 percent higher than that in June 2018. Apparel imports from Bangladesh, the largest apparel exporter to India, has increased by 40 percent. China’s apparel exports to India have also grown by 19 percent during the same period. Analysis of financial filings of select apparel manufacturers and fashion brands & retailers for Q1 FY 2020 over Q1 FY 2019 highlights the following:
• Most of the companies have shown an increase in their operating revenue.
• Growth in Operating Profit Margins (OPM per cent) for majority of the companies is also very high with Gokaldas Exports and Pearl Global showing an increase of 11.3 and 4.6 percentage points.
• The increase in OPM percent of fashion brands and retailers is mainly because of a change in regulation by Ministry of Corporate Affairs*.
*Under new regulation (IND-AS 116), the rent expense will be replaced by depreciation and interest expense in the income statement, reflecting their right to- use an asset for a period of time and the associated liability for payments.
Apparel Index of Industrial Production (IIP) Update
• The apparel IIP showed growth in July 2019 after continuously declining for the past three months. With a value of 167 in July 2019, the apparel IIP was 3 percent higher than that in June 2019.
• As compares to July 2018, the apparel IIP is 15 percent higher in July 2019.
Apparel Consumer Price Index (CPI) Update
• The apparel CPI has remained constant for the past four months at a value of 149.
• As compared to August 2018, the apparel CPI is 1 percent higher in August 2019.
Monthly Apparel Exports Update
• The apparel exports in July 2019 stood at $1,366mn, showing an increase of 11 percent from June 2019.
• As compared to July 2018, the apparel exports increased by 7 percent in July 2019.
• The provisional data for August 2019 indicates a decrease of 2 percent on YoY basis and a decrease of 8 percent on MoM basis.
Country wise Apparel Exports Update
• Apparel exports to the largest market USA increased by 7 percent in Apr-July 2019 as compared to Apr-July 2018.
• The exports to Saudi Arab have shown the highest growth (59 percent) with an addition of $71mn in Apr-July 2019 as compared to Apr-July 2018.
• However, the apparel exports to other major markets have declined with Germany showing a decline of 11 percent.
Monthly Apparel Imports Update
• The apparel imports in July 2019 stood at $109 mn, which is a significant jump of 40 percent as compared to that in June 2019. The imports also showed an increase of 8 percent as compared to that in July 2018.
• The provisional data for August 2019 indicates a decline of 3 percent on YoY basis, but a growth of 16 percent on MoM basis.
Country wise Apparel Imports Update
• Apparel imports from Bangladesh, the largest apparel exporter to India, has increased by 31 percent in Apr-July 2019 as compared to Apr-July 2018.
• India has reported a significant increase of 38 percent in its apparel imports from Hong Kong and Vietnam as well, however, the values increases are miniscule
CMAl’s Apparel Index aims to set a benchmark for the entire domestic apparel industry and helps brands in taking informed business decisions. For investors, industry players, stakeholders and policy makers, the index is a useful tool offering concrete and credible information and is an excellent source for assessing the performance of the industry. The Index is analysed on assessing the performance on four parameters: Sales turnover, sell through (percentage of fresh stocks sold), number of days of inventory holding, and investments (signifying future confidence) in brand development and brand building.
