Kitex Garments’ profits skyrocket as Bangladesh unrest fuels Indian garment industry boom

Kitex Garments Limited has reported an unprecedented financial performance for the second quarter of FY25, as the company witnessed a surge in profitability driven by strong demand and favorable market conditions. The net profit nearly tripled to ₹39.94 crore, up from ₹13.21 crore in the same quarter last fiscal, primarily benefiting from the rising unrest in Bangladesh, said Sabu Jacob, Managing Director of Kitex Garments.

The Kochi-based garment manufacturer, recognized globally as the second-largest producer of infant garments, experienced a surge in total revenue, reaching ₹220.91 crore for the quarter, marking a 58% rise compared to the ₹139.48 crore recorded in Q2 of the previous year. Profit before tax increased sharply by 188%, from ₹18.56 crore to ₹53.52 crore. The EBITDA margin also showed notable improvement, expanding from 18.25% in Q2 last year to 27.68% in the current quarter. “Our expanded capacities, particularly in Telangana, are enabling us to capture new growth opportunities,” noted Jacob.

The Managing Director emphasized that Bangladesh’s political instability has worked in favor of Indian garment manufacturers, enhancing the overall competitive edge of the country in the global market. Jacob stated that the unrest has been advantageous not just for Kitex but for India’s entire garment industry, which he predicts will touch $50 billion in demand next year.

Bangladesh Unrest Boosts Indian Apparel Sector

Sabu Jacob attributed much of the growth to the rising political and economic unrest in Bangladesh, a leading competitor in the garment sector. With key export operations disrupted in Bangladesh, international buyers have increasingly turned towards India as a more stable alternative. “The unrest in Bangladesh has been a major growth lever for not only Kitex Garments but also the broader Indian garment industry. The Indian garment sector has a current capacity of $20 billion but has utilized only $16.5 billion so far this year,” Jacob explained, highlighting the gap as an opportunity to capture further market share.

Kitex Garments’ robust growth is underscored by its focus on operational efficiencies and recent investments in capacity expansion. The company’s facilities in Telangana, set to be fully operational in two phases by 2026, are projected to add $0.5 billion to the company’s manufacturing capabilities. Jacob indicated that with this expansion, the company’s annual turnover could exceed ₹1,000 crore in the ongoing fiscal year, up from ₹641 crore in the previous year.

Strong Financial Metrics Reflect Industry Resilience

Kitex Garments Limited’s financial results for the second quarter highlight the company’s resilience amid global market uncertainties. The Profit After Tax (PAT) margin surged to 18.08% compared to 9.47% in the corresponding quarter last year, showcasing Kitex’s ability to leverage increased demand while maintaining cost control. According to Jacob, the company’s focus on efficiency has led to a notable improvement in profitability metrics, which he attributes to strategic decisions such as expanded capacities and technological integration in manufacturing.

“Our recent investments in expanded capacities in Telangana strengthen our ability to scale further, positioning us to capture emerging opportunities and deliver robust value to our stakeholders,” Jacob reiterated. He further projected that the demand for Indian-made garments would continue to rise, with Kitex aiming to increase its market share globally.

Expert Insight: Capacity Expansion Key to Future Growth

Industry experts have noted that Kitex Garments’ growth trajectory aligns well with broader trends in the global apparel market, where companies that invest in scalability are reaping benefits amidst supply chain disruptions. Analysts believe that the Indian garment industry stands to gain further from the instability in Bangladesh. The expanded facilities in Telangana, which will significantly boost Kitex’s manufacturing capacity, have been highlighted as instrumental to maintaining this growth momentum.

“Kitex’s strategic expansion in Telangana ensures that it remains competitive and ready to capitalize on the shifting global landscape,” said one market analyst. The garment industry in India is currently poised to see a shift in market share, given the challenges faced by key players in Bangladesh.

Kitex Garments has positioned itself strongly within this evolving landscape, with its strategic investments and focus on scaling up expected to lead to sustainable growth in the coming years.