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Thanks to healthy demand, and increased blending with cotton yarn due to decadal high prices of cotton, polyester will drive revenue growth of 18-20 per cent this fiscal for polyester yarn manufacturing sector.

Claiming this CRISIL, an Indian analytical company providing ratings, research and risk and policy advisory services, has said that better profitability and expected modest capital spending will improve credit profiles of polyester yarn manufacturers.

CRISIL says that recovery in demand from these end-user segments and multiple price hikes had led to a revenue growth of 60 per cent last fiscal, though on a low base, with sales volume picking up 15 per cent.

Demand is seen to remain healthy this fiscal too, with garments and home textiles segments expected to grow at 16-18 per cent and 12-13 per cent in fiscal 2023, respectively, driven by recovery in domestic demand and moderate growth in exports.

Polyester yarn is used mostly in athletic and leisurewear, other apparels and home textiles.

Gautam Shahi, Director, CRISIL Ratings, says “Polyester yarn is cost effective to blend with cotton yarn, and since cotton yarn prices have risen by 25 per cent over the past year, higher blending has increased the demand for polyester yarn.”

He further added that with an increased differential between cotton and polyester yarn prices to sustain, we expect 4-5 per cent of cotton yarn demand to shift to polyester yarn. This shift is expected to continue for most part of this fiscal as end user segments operate in a price-competitive environment.

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