The ripples of the economic upheaval in Europe, Latin America and the US following the Russia-Ukraine war are being felt in India’s denim capital – Gujarat. Denim majors like Arvind, Nandan Denim and Vishal Fabrics have reported decline in revenues during the third quarter of the current fiscal, due to declining demand for denim.
For instance, Arvind’s denim exports dropped from 18 million metres to 6 million metres, down 66 percent during the same period, whereas domestic volumes dropped from 8 million metres to 4 million – down 50 percent.
This may have resulted in revenues from denim declining from Rs 1,917 crore in the third quarter of FY 2022 to Rs 1,549 crore in the corresponding quarter in the current fiscal year, down 25 percent. Even quarter on quarter, the revenues from denim were down by about 12 percent.
Similarly, Nandan Denim’s revenues from operations during the third quarter declined 55 percent down from Rs 58,317 crore to Rs 26,223 crore in a year. The Chiripal Group-owned Vishal Fabrics too posted a 10% decline in its revenues during the quarter which stood at Rs 38,578 crore.
Interestingly, share prices of each of denim majors have nosedived at least 30 percent in a year. Industry players attribute the decline in revenues to eroding demand in both export as well as domestic markets. Export-oriented MSMEs witnessed a reduction of at least 60- 70 percent in their exports.