New Delhi: Crisil Ratings said that the revenue of the Indian leather apparel and accessories sector is expected to decline by 7-8 per cent during the financial year 2023-24 (April-March), owing to a slowdown in consumer demand in Europe and the US . Up to 85-90 per cent of the production of the Indian leather apparel and accessories industry is exported.
Europe and North America account for 75 percent of this. According to the rating agency, it may see an expected decline in revenue despite gains from a depreciating rupee. Depreciating rupee usually helps export oriented industry to get higher realisation. ,Also read: ‘Fired from job for the third time in 4 months’: IT employee writes heart-wrenching post after being fired from Google,
“Revenue is expected to remain stable in the current financial year (2022-23), following a strong performance in the previous financial year, riding on strong demand-recycling, which has taken it back to pre-pandemic levels,” Crisil Ratings said in a report earlier. level was taken.” This week.” (Also read: IT layoffs 2023: Tech giants are laying off around 3000 employees every day in January,
The credit profile of rated companies, however, will remain stable at low debt levels and limited expansion plans,” the rating agency said after analyzing 23 companies, which account for 11 per cent of the industry’s revenue. Rahul Guha, director, Crisil Ratings According to the report, demand for discretionary goods in major export markets – essentially advanced Western economies – is shrinking due to shrinking inflation and rising recession fears.
“While domestic demand for the leather apparel and accessories segment remains resilient, overall sector revenue is seen declining in the medium term,” said Guha. Moreover, the operating margin for the industry is expected to fall by 150 basis points (1.5 percentage points) in this financial year 2022-23 and remain at 6-6.5 per cent in the medium term.
Going forward, any adverse currency fluctuations and further geopolitical escalation is one of the key watchdogs for the industry, the rating agency said.