Domestic brokerage firm Motilal Oswal has initiated coverage on eight textile companies, assigning a Buy rating to Gokaldas Exports, Indo Count Industries, Arvind Fashions, Pearl Global Industries and Welspun Living, while assigning Vardhman Textiles, KPR Mill and Trident a Neutral rating.
The brokerage believes the global textile and apparel industry is gradually emerging from a prolonged period of weakness. Global textile and apparel trade remained largely flat between CY21 and CY25 after the strong post-pandemic demand surge in FY22.
Apparel, which accounts for around 60% of global trade, saw muted growth, while the home textile segment declined during the period. Inflationary pressures, weak discretionary spending, retailer inventory corrections, softer demand in key markets such as the US and Europe, supply chain disruptions, high freight costs and tariff uncertainties weighed on the sector.
According to Motilal Oswal, conditions have started improving from CY25 onwards, aided by inventory normalisation, easing inflation and lower tariffs. The brokerage expects India's textile sector to be a key beneficiary of this recovery, supported by upcoming free trade agreements with the UK and EU, favourable tariff realignments and improving incentives such as RoSCTL.
Buy-rated stocks
Gokaldas Exports: The company could benefit from capacity expansion in India and improved utilisation in its Africa business following the renewal of the African Growth and Opportunity Act (AGOA). The brokerage forecasts revenue, EBITDA and adjusted PAT CAGR of 18%, 33% and 73%, respectively, over FY26-28 and has assigned a Buy rating with a target price of Rs 1,110, an upside of 34%.
Arvind Fashions : The brokerage sees a strategic shift from a fabric-focused business to a garment-led model, which it believes offers a larger addressable market. It also expects the advanced materials segment to support growth and margins. Motilal Oswal projects revenue, EBITDA and adjusted PAT CAGR of 15%, 23% and 29%, respectively, and has set a target price of Rs 670 (43% upside) with a Buy rating.
Pearl Global Industries: It is expected to see growth driven by capacity expansion across India, Bangladesh, Vietnam and Indonesia. The brokerage forecasts revenue, EBITDA and adjusted PAT CAGR of 14%, 25% and 29%, respectively, and values the stock at Rs 2,300 (22% upside) with a Buy recommendation.
Indo Count: The company is expected to benefit from growth in its utility bedding business and the domestic bed linen segment. Motilal Oswal projects revenue, EBITDA and adjusted PAT CAGR of 20%, 44% and 90%, respectively, over FY26-28 and has assigned a Buy rating with a target price of Rs 550, an upside of 40%.
Welspun Living is expected to deliver mid-teen revenue growth led by its home textile business, supported by lower tariffs and prospective trade agreements with the UK and EU. The brokerage forecasts revenue, EBITDA and adjusted PAT CAGR of 14%, 43% and 97%, respectively, and has set a target price of Rs 200 (24% upside) with a Buy rating.
Neutral-rated stocks
KPR Mill: It is expected to benefit from its leadership position in textile and apparel manufacturing and its garmenting capacity, along with contributions from its sugar and ethanol businesses. Motilal Oswal projects revenue, EBITDA and adjusted PAT CAGR of 13%, 20% and 20%, respectively, and has assigned a target price of Rs 1,200 (6% upside).
Trident: The brokerage expects high single-digit growth led by its home textile portfolio, followed by paper and yarn businesses. It forecasts revenue, EBITDA and adjusted PAT CAGR of 11%, 17% and 29%, respectively, and values the stock at Rs 28 (9.3% upside).
Vardhman Textiles: The company is expected to post mid-single-digit growth, driven by its garment business and supported by better yarn realisations. Motilal Oswal projects revenue, EBITDA and adjusted PAT CAGR of 9%, 24% and 32%, respectively, and has initiated coverage with a Neutral rating and a target price of Rs 700 (9.5% upside).
Indian textile market grew at a 6% CAGR between FY22 and FY26, led by apparel growth of around 8% and home textiles growth of about 5%. While the domestic market, which contributes roughly 80% of the industry, expanded 9%, exports declined 4% due to weak global demand. Motilal Oswal expects exports to recover going forward and highlighted the government's target of expanding the textile market to USD 350 billion from USD 194 billion in FY26.
The brokerage also pointed to global supply chain shifts as a structural opportunity for India. Restrictions on Xinjiang cotton by the US and EU, declining spindle capacity in China and political instability in competing sourcing hubs such as Pakistan and Bangladesh have strengthened India's position. India remains the world's second-largest cotton producer and spindle capacity holder, supported by a large export base, execution capabilities and abundant labour availability.
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