Karachi, January 19, 2022 (PPI-OT): Pakistan Textile: Strong 1HFY22 performance by textile exports

Pakistan’s textiles exports surged by ~25%YoY to US$9.4bn during the first half of FY22, as compared to US$7.4bn in the corresponding period last year, as per Pakistan Bureau of Statistics (PBS) report.

Growth was seen across the value chain, however, the categories showing highest growth over the period under review were raw cotton, cotton yarn, knitwear and ready-made garments, each reporting a handsome growth.

For Dec’21 alone, textile exports increased by 15.9%YoY where the exports during the month were recorded at US$1.6bn against US$1.4bn during Dec’20. On month-on-month basis, the textile exports witnessed a decline of 6.5% where the exports in Nov’21 stood at of US$1.7bn.

Local yarn margins have eased off slightly in the wake of last spurt in cotton prices. With yarn prices historically moving with a lag to cotton prices, we expect the same to be adjusted in coming days. We continue to flag NML as our top pick in the textile space with a TP of PkR128/sh owing to its i) diversification across value chain, ii) new expansions coming online and iii) strong dividend income.