INDUSTRY
Cotton yarn industry revenue set for a robust recovery on strong export demand
- IBJ Bureau
- Jul 28, 2026
India’s cotton yarn industry is poised for a healthy recovery in FY27, with revenue expected to rise by 9 to 11 per cent after a flattish FY26.
The uptick will be driven by 6 to 8 per cent higher yarn realisation and 2 to 4 per cent volume growth as exports revive and export-oriented downstream segments regain momentum amid easing trade disruptions, notes a report by CRISIL Ratings.
The report adds that the revenue recovery is also expected to flow through to profitability, with operating margin likely to expand by 150 to 250 basis points, aided by higher cotton-yarn spreads.
This, along with a larger revenue base, will support improved cash accruals and overall credit profiles, shows an analysis of around 70 cotton spinning companies in the rating agency’s portfolio.
“Exports are expected to be the key growth engine for cotton yarn-makers this fiscal, with export revenue likely to grow 12 to 14 per cent and contribute 30 to 31 per cent of industry revenue, up from 28 per cent last fiscal. This will be supported by a sharp rise in shipments to China, India’s second-largest export destination for cotton yarn, as lower domestic cotton acreage in China is expected to increase its import requirement,” CRISIL Ratings Director Ankush Tyagi notes.
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