How Top Textile Stocks Reacted to Nirmala Sitharaman's 2024 Budget Speech
Top textile stocks had mixed reactions to Budget 2024-25 announcements aimed at boosting exports and competitiveness in the sector.
Finance Minister Nirmala Sitharaman presented her seventh consecutive Union Budget on July 23, 2024, setting a new record. The budget included significant announcements aimed at enhancing the competitiveness of the textile sector. Let's dive into the key measures and examine how top textile stocks reacted to these announcements.
Key Announcements in the Budget - Textile Sector
The budget proposed several changes to the customs duty structure to support the textile sector:
- Reduction in Basic Customs Duty (BCD):
- Real down filling material from duck or goose: Reduced from 30 per cent to 10 per cent.
- Methylene diphenyl diisocyanate (MDI) for spandex yarn: Reduced from 7.5 per cent to 5 per cent.
- Wet white, crust, and finished leather for export: Reduced from 10 per cent to nil.
- Export Duty Structure Simplification:
- Simplified and rationalized export duties on raw hides, skins, and leather.
These measures are aimed at boosting exports and enhancing the competitiveness of Indian textiles in the global market.
Top Textile Stocks Reaction
On the day of the budget announcement, here is how the top five textile stocks reacted:
| S.No. |
Name |
CMP (Rs) |
Mcap (Rs) |
P/E |
ROCE % |
Today's Return (%) |
| 1 |
Grasim |
2829.6 |
186323.25 |
31.72 |
9.38 |
0.58 |
| 2 |
Trident |
37.02 |
18865.61 |
54.39 |
10.43 |
-0.54 |
| 3 |
Welspun Living |
174.05 |
16914.32 |
25.05 |
16.12 |
-2.4 |
| 4 |
Vardhman Textile |
523.05 |
15125.2 |
23.97 |
8.8 |
-2.13 |
| 5 |
Raymond |
1900 |
12648.99 |
7.55 |
30.93 |
-4.8 |
Conclusion
The Union Budget 2024-25 has introduced several measures to support the textile sector, with reductions in customs duties expected to boost exports and competitiveness. While the immediate stock reactions were mixed, the long-term impact of these budgetary measures is likely to be positive for the textile industry.
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Investors should keep an eye on the implementation of these policies and the global market conditions to gauge the full impact on the sector.
Disclaimer: The article is for informational purposes only and not investment advice.