About the Apparells Sector
India holds a prominent position in global garment manufacturing, showcasing a rich tradition of craftsmanship in the entire production process—from fiber and yarn to fabric and apparel. The country's cotton, silk, and denim are widely appreciated worldwide, and Indian clothing enjoys success in fashion hubs globally.
India boasts significant cotton production, covering 38% of the global cotton cultivation area with 13.5 million hectares. India's textile and apparel industry is diverse, encompassing traditional handloom and handicrafts as well as organised textile sectors.
This sector plays a significant role in the economy, contributing 2% to the gross domestic product (GDP), which is approximately US$ 70 billion. Notably, it is the country's second-largest employer, employing 45 million people directly and another 100 million in the allied sector.
Future Outlook of the Apparells Sector
India's textile and apparel market is experiencing substantial growth, at 14.59% annually. It was valued at US$ 172.3 billion in 2022 and is projected to reach US$ 387.3 billion by 2028.
India's leading textile and clothing manufacturing states are Andhra Pradesh, Telangana, Haryana, Jharkhand, and Gujarat. The government aims to achieve a textiles production target of US$ 250 billion, with exports reaching US$ 100 billion by 2030. Union Minister for Textiles, Consumer Affairs, Food and Public Distribution, and Commerce and Industry discussed this ambitious roadmap organised by the Ministry of Textiles at the Chintan Shivir.
Things To Consider Before Investing in the Apparells Sector
Before investing in the apparel sector, several factors should be carefully considered to make informed decisions:
- Market Trends and Demand: Analyse current market trends and demand for apparel products. Understand consumer preferences, changing fashion trends, and any shifts in buying behaviour that could impact the sector.
- Competitive Landscape: Evaluate the level of competition in the apparel industry. Identify key players, their market share, and strategies. Assess the barriers to entry and the potential for new entrants to disrupt the market.
- Supply Chain and Raw Materials: Examine the stability and efficiency of the supply chain. Consider the availability and cost of raw materials, as any fluctuations can impact production costs and profit margins.
- Regulatory Environment: Understand the regulatory landscape affecting the apparel sector, including trade policies, labour regulations, and environmental standards. Compliance with regulations is crucial for sustainable and ethical business practices.
- Global Economic Conditions: Given the globalisation of the apparel industry, assess global economic conditions and trade relationships. Changes in international trade policies or geopolitical events can impact the sector significantly.
- Sustainability and Social Responsibility: Increasingly, consumers are conscious of sustainability and social responsibility. Evaluate how companies in the sector address environmental issues, ethical sourcing, and fair labour practices, as these factors can influence brand perception and market success.
- Financial Health of Companies: Analyse the financial health of potential investment targets. Review key financial metrics, such as revenue growth, profitability, debt levels, and cash flow. A strong balance sheet is indicative of a resilient business.
- Seasonal Nature of the Business: Recognise that the apparel sector often experiences seasonality, with demand varying throughout the year. Consider how companies manage inventory and cash flow during off-peak seasons.
- E-commerce Trends: Assess the impact of e-commerce on the apparel industry. Companies that successfully navigate online sales channels may have a competitive advantage.
How To Invest in the Apparells Sector Stocks?
To invest in sector stocks via Angel One, follow these steps:
- Log in to your Angel One account.
- Click on the search icon and look for your desired apparells sector stock.
- Now, place your buy order. Simply click on the ‘Buy’ button, enter your desired quantity, and select the order type.
- To complete your transaction, click on the ‘Buy’ button.
You can track the status of the purchase from the ‘Positions’ section in the ‘Orders’ module. Once the stock is delivered, you can track its gains and losses from your ‘Portfolio.’
