Domestic demand for readymade garments is also unlikely to pick up any time soon, on account of lower income levels, postponement of weddings and personal events, and reduced festive activities this fiscal year. Small and medium enterprises (SMEs) command a 30-40 per cent share in the total readymade garment market of about Rs 4.8 trillion. While demand for the home furnishings segment (SME
share is 70-80 per cent of Rs 700 billion) is expected to decline as well, we expect the segment to pick up sooner than garments, on account of the upcoming monsoon and winter seasons.
In home furnishings, the demand for products such as bedsheets, blankets, and towels will be relatively better, compared with discretionary items such as curtains and home decor. In addition, historically better financials (operating margins, gearing and interest coverage ratios) of home furnishing companies, as against other segments of the textile value chain, will also provide relief in these tough times.
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