Impact of Recession on Export of Indian Textile Industry

Under the Guidance of :- Presented By :-Mr. Gautam Bansal Lovedeep Singh SidhuFaculty Member, MBA 2BPCTE , Ludhiana

INDIAN TEXTILE INDUSTRY

Textile is one of India’s oldest industry.

It is the second largest employment generator .

The industry uses a wide variety of fibres .

India contributes to around 12 percent of the world's production of cotton yarn and textiles

 

India covers 22 percent of the global market

India is known to be the third largest manufacturer of cotton across the globe .

India claims to be the second largest manufacturer of yarn and textiles in the world

CLASSIC WEARS PVT. LTD.

Classic Wear Ltd. was established in the year 1987 in Noida

Classis wears was introduced as a manufacturer of Hosiery and knitwear on January 19, 1988.

Presently Classic Wears is a leading manufacturer of Knitwear for gents, ladies and kids in Northern India

Classic Wears Pvt. Ltd is mainly the flat knit division of the group having a monthly production capacity of 1,50,000 pcs.

It is working for retailers like Pantaloon, Shoppers Stop, Lifestyle, and Pyramid.

Business philosophy

i.e. ‘TO GROW’

Quality policy is :

“TO MEET THE COMMON PEOPLE NEEDS”

MISSION To give our customer a competitive advantage through superior products and services at best prices

Strengths Established brand Name ‘Sportking’.

Most experienced

technical manpowerOne of the

oldest known fabric

manufacturers

WeaknessesDo not have enough retail

outletsLess advertisement of the

brand

OpportunitiesBetter utilization can be

made with new machinesCan go directly to the end users through exclusive

showrooms

Threatscompetition from existing

and upcoming

units in the industry

Fluctuations in the prices

of raw materials

SWOT Analysis.

Chairman(Sh. Raj Avasthi)

Director(Sh. S. R. Rupal)

Director(Sh. Naresh Jain)

Director(Smt. Parveen Avasthi)

Knitting Head(Uttam Chand)

Production Head(Shekhar Kumar)

Manager Commercial(Bhisham Verma)

Packing & Forwarding(Dinesh Bhalla)

H R Dept.Time Office

Security(O P Sharma)

Accounts & EDP(Mr. Subash & Mr. Rajeev Jain)Store Dispatch

(Munish Kumar & Joga Singh)

Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months. It compares a firm's current assets to its current liabilities.

Particulars 2005-06 2006-07 2007-08

total current assets 121758860.6 162816243.2 225315071.9

Current Liabilities 42307975.99 63181759.48 102306548.8

Curent Ratio 2.877917408 2.576950128 2.202352387

Quick ratio :- An indicator of a company’s short term liquidity. The quick ratio measures a company’ ability to meet its short term obligations with its most liquid assets. The higher the quick ratio, the better the position of the companyThe quick ratio is calculated as

particulars 2005-06 2006-07 2007-08

total quick assets 72798255.82 108338595.6 132665360.7

Current Liabilities 42307975.99 63181759.48 102306548.8

total quick assets 72798255.82 108338595.6 132665360.7

Quick ratio 1.720674509 1.714713178 1.296743584

Cash ratio:- The ratio of a company's total cash and cash equivalents to its current liabilities. The cash ratio is most commonly used as a measure of company liquidity. It can therefore determine if, and how quickly, the company can repay its short-term debt.

particulars 2005-06 2006-07 2007-08

cash & bank 2423918.37 4756425.17 14590577.15

Current Liabilities 42307975.99 63181759.48 102306548.8

acid test ratio 0.057292232 0.075281619 0.142616258

Debt-to-Equity ratio indicates the relationship between the external equities or outsiders funds and the internal equities or shareholders funds. It is also known as external internal equity ratio. It is determined to ascertain soundness of the long term financial policies of the company.

Particulars 2005-06 2006-07 2007-08

outsiders fund 48081483.64 95108044.52 122551415.2

Shareholder fund 77264900 67935265.29 87675610.73

Debt equity ratio 0.622293999 1.399980468 1.397782282

EXPORT DATA FROM DEPARTMENT OF EXPORT GOVERNMENT OF INDIA

Textiles Exports from 2006-07 to April 2008 (Value - Rs.Crores)

Item 2006-07 2007-08

Cotton Yarn, Fabrics & Madeups 19089.39 18720.59

Natural Silk Yarn, Fabrics &

Madeups

1976.9 1540.93

Wool Yarn, Fabrics & Madeups 385.5 373.58

Ready Made Garments 37506.16 36497.79

 Cotton Balance Sheet from 2001-02 to 2008-09

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Export

(lack balls)

0.50 0.84 12.11 9.14 47.00 58.00 85.00 50.00

EXPORT OF JUTE GOODS (rs crore)

YEAR 2004-05 2005-06 2006-07 2007-08 2008-09

EXPORT 160.71 362.33 321.94 334.81 291.99

export 0

50

100

150

200

250

300

350

400

160.71

362.33

321.94

2004-052005-062006-07

SILK EXPORTS

Item 2006-07 2007-08

Rs Crore Rs Crore

Natural Silk Yarn,

Fabrics & Made-up

1976.90 1540.93

Readymade Garments 1197.21 1093.67

Silk Carpet 132.36 72.11

Silk Waste 22.78 12.15

Total 3329.25 2718.86

Research Methodology

Title

Impact of Recession on Export of Indian Textile Industry

Objectives

To examine the export performance of textile industry after recession

To find how government maintains the economic stability at the time of recession.

To study the repercussion of recession on employment and price of raw material .

Research Methodology

UNIVERSE - All the exporters who deal in textile export

POPULATION - All the respondents of Ludhiana city who

export textile .

SAMPLE SIZE - The sample size for the survey conducted is 18 respondents.

SAMPLING TECHNIQUE - Convenience Sampling was used  

 

PRIMARY DATA

METHOD OF PRIMARY DATA COLLECTION

  The method followed in obtaining the primary data was

through the structured questionnaire.

 

SECONDARY DATA

  METHOD OF SECONDARY DATA COLLECTION:

Internet

Limitation Of The Study

Sample size cannot always represent the whole population.

Respondents can hide the real information. Time constraint.

DATA ANALYSIS AND INTERPRETATION

4.1 Products Exported

52%

13%

9%

4%

22%Cotton

Wool

Silk

Jute

Others

N = 18

4.2 Major Territory for Export

31%

15%

12%

31%

12%

AmericaEnglandJapanCanadaOthers

N = 18

4.3 Affect of Recession on Export Business

Strongly Agree Agree Neutral Disagree Strongly Disagree

0

1

2

3

4

5

6

7

8

2

7

4

3

2

Recession's Affect

NN =18

 4.4 Decrease in sale of goods

Strongly Agree Agree Neutral Disagree Strongly Disagree

0

1

2

3

4

5

6

7

3

6

4

3

2

Sales Decreased

N = 16

4.5 Respondents verdict on change in export

44%

56%

PositiveNegative

N = 16

4.6.1 Percentage(Positive) change in export

29%

29%

43%102030>30

N = 7

4.6.2 Percentage (Negative) change in export

22%

44%

33%

102030>30

N = 9

4.7 Labor Turnover

41%

59%

IncreaseDecreaseNo Impact

N = 17

4.8 Recession’s effect on price of raw material

47%

53%

YesNo

N = 17

4.9 Recession’s effect on status of export order

13%

33%

7%

47%DelayDecreaseIncreaseNo Impact

4.10 Government policies against recession

25%

42%

33%

Somehow Yes No

5. RESULT AND FINDING

Cotton is the most exported product.

  America is major territory for export .

  Domestic market is as much strong as compare to international

market

CONCLUSIONThe report shows that there has been a neutral

effect of recession on exports especially in Ludhiana region. The quantified results showed that 42% of the people agree that there has been a positive attitude of govt. authorities while formulating measures to check the effects of recession.

There has been an effect of recession on the labor turnover. This has been made concrete as a fact after gathering the collective responses of people and getting 59% in favor of this. Although there has been a closure of innumerable units of textile export units in the region but the post recession measures have helped in standing against this global menace