Karachi, September 22, 2021 (PPI-OT): Pakistan Textile – 2MFY22 textile exports up 29%YoY

As per the data released by PBS, textile exports for the month of Aug’21 registered a growth of 46%YoY to stand at US$1.46bn. Segment-wise value and non-value added exports posted a growth of 27%/38%YoY in 2MFY22.

In the value added segment, readymade garments and bed wear registered a growth of 48.4%/45.5%YoY while knitwear outperformed the segment with 57.9%YoY in Aug’21. In 2MFY22 readymade garments/bed wear/knitwear posted a growth of 22.6%/24.5%/34.1%YoY respectively.

International cotton prices remained strong throughout the month, hovering around at Usc103/Ib with an increase of 4%MoM on 20-Sep’21 and cumulative CYTD increase of 21.8%. On the local front, cotton prices currently hover around at ~PkR14,232/maund – at about highest level since 2010 – or +6.1%MoM on 20-Sep’21.

Textile sector has performed relatively well in recent months with an outperformance of 2.5% against KSE-100 index. Henceforth, we remain bullish on the sector where any dip in prices presents an opportunity to take exposure in textiles. Our top pick for the sector is NML (TP: PkR132/sh – 46% upside) which is currently trading at 8% discount to its portfolio value of PkR98/sh.