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Thursday,09-July-2020

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Fiscal health: Anti-COVID fabrics’ go viral

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coronavirus.

India’s fabric manufacturers seem to have converted the COVID-19 induced economic catastrophe into an opportunity, as scores of companies have quickly come out with anti-microbial textiles.

The trend has gone viral, said industry insiders, as they cited many established players’ entry into the anti-COVID or microbial fabric segment.

Notably, these companies claim that anti-microbial fibres not only destroy various viruses and bacterias, but also inhibit their growth.

Besides guaranteeing the financial health of textile manufacturers, experts opined the need for such products as viruses have the tendency to thrive on the fabric surface, thereby, increasing the risk of exposure.

At present, these specialised fabrics are used in the medical segment including for manufacturing of masks and personal protection equipment (PPE).

However, the COVID-19 scare may also lead to increased demand for such fabrics in the global apparel industry.

Consequently, many domestic manufacturers have entered into collaboration with foreign companies for such antiviral textile technology.

Even though, the demand for these fabrics might not be able to fully offset the weakness in the sector, the new fibres do make for a timely business opportunity for those players, who are already invested in this specialised segment.

Seeing the potential of the new fabric, many players such as Siyaram Silk Mills, Grasim Industries and Shiva Texyarn have announced the launch of such products.

“The demand for textile with antimicrobial material has picked up in the market amidst the COVID-19 pandemic, and these are being used to manufacture N95 masks, surgical masks, PPEs and food packaging bags,” said Pinakiranjan Mishra, Partner and Leader, Consumer Products and Retail, EY India.

“While its true efficacy in the long term is yet to be proven, however, in the short and medium term this trend will certainly be relevant to the manufacturers.”

Furthermore, the new type of fabrics provide a value added proposition, said Motilal Oswal Financial Services’ Private Retail Research Head Siddhartha Khemka.

“Any product made out of the fabric will have the value added advantage than normal fabrics,” Khemka said.

“This might give a sales push to the sector during an overall downtrend that the industry is expected to witness.”

According to Suman Chowdhury, Chief Analytical Officer at Acuite Ratings & Research: “The exports of yarns, fabrics and and madeups from India has seen a negative CAGR of 1.6 per cent over the 5-year period 2015-20, reflecting the challenges faced by the domestic textile exporters in a competitive global market.”

“Clearly, there is an immediate opportunity for such value added pro ducts like anti-microbial fabrics in the medical segment driven by high demand of masks, PPE, bed linen etc. Such demand is expected to sustain globally at least in the near to medium term and may increase further if there is an increased usage of the latter in garments going forward.”

Business

WhatsApp Business hits 50 million users globally, 15mn in India

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WhatsApp Business app.

With the Covid-19 disruptions bringing more businesses online, WhatsApp Business has reached a new milestone of 50 million monthly users globally with almost a third of them being in India, the Facebook-owned platform said on Thursday.

In India, there are more than 15 million monthly WhatsApp Business app users.

The platform on Thursday also introduced new features to start a chat with a business on WhatsApp like starting a chat with a business using QR codes.

Scanning a QR code will open a chat with an optional pre-populated message created by the business to start the conversation, WhatsApp Business said in a blog post.

With the app’s messaging tools, businesses can quickly send information such as their catalog to get the conversation going.

QR codes are available for businesses around the world using the WhatsApp Business app or WhatsApp Business API starting Thursday, the company said.

WhatsApp Business said that more than 40 million people view a business catalog on the platform each month, while more than three million users in India do so each month.

“To make it easier for people to discover products, we’re making catalogs and individual items available to be shared as links on websites, Facebook, Instagram and elsewhere,” said the blog post.

“If people want to share a catalog or item they find with friends or family, they can simply copy the link and send it on WhatsApp or other places as well,” it added.

Additionally, WhatsApp also launched new “Open for Business” sticker packs to help people and businesses stay connected, say thanks and get business done.

WhatsApp which has over 400 million users in India said these sticker packs will be available to all of its more than two billion users worldwide as well as the 50 million users of the WhatsApp Business app.

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Business

Oil and Gas: OMCs set to start FY21 with a bang in Q1

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Petrol. (File Photo: IANS)

The Covid-19 demand suppression in early part of the year is likely to abate for oil marketing companies, now with state-run companies — IOC, HPCL and BPCL making a strong beginning to FY21 returning high levels of earnings per share between 37 and 266 per cent in three months, ICICI Securities has said in a report.

The report on refining and marketing has said that the companies shares would be flying on stock exchanges on the back of record auto fuel marketing margin, inventory gain and in case of BPCL and HPCL, surge in GRM (gross refining margin) on a low base.

Net auto fuel marketing margin (on sale of petrol and diesel) is estimated at Rs 6.1 per litre in Q1FY21 and Rs 2 per litre in Q2FY21. The higher margin is on account of upwards revision of fuel prices that started on June 7 and continued for 22 continuous days raising petrol and diesel prices by about Rs 9.17 and 11.39 per litre respectively.

According to the brokerage report, in FY21 margin may be higher than earlier estimate of Rs 2.5 litre. This would provide higher earnings for the companies as auto fuel sales is a major component of revenue for OMCs.

The main earning driver for OMCs is not only higher margins but also inventory gain that they will make this year. In Q1 the inventory gains for companies are estimated at Rs 550-850 crore against loss or smaller gain in Q1FY20. BPCL and HPCL’s GRM is estimated to be up between two and nine times YoY at $5.9-6.9 per barrel boosted by discounts on crude ($3.4-3.6/bbl) but that of IOC at $4.3/bbl to be down 9 per cent YoY.

OMCs’ Q1 GRM is estimated at $4.3-6.9/bbl including gain from crude at discount to Dubai of $3.4-3.6/bbl. However, GRM in Q2 is weak at $3.0-3.8/bbl (including inventory gain of $0.7-0.8/bbl) due to shrinking of crude discounts. Core GRM may be weak in Q2 and FY21, but that including inventory gain would be higher, the ICICI Securities said.

OMCs’ FY21 product inventory gain is estimated at Rs 1100-2300 crore.

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Business

Flipkart Group invests Rs 260 crore in Arvind Fashions’ arm

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Rupees

The Flipkart Group on Thursday announced it has invested Rs 260 crore to purchase a significant minority stake in Arvind Youth Brands, a subsidiary of Arvind Fashions (AFL).

Arvind Youth Brands owns the popular Flying Machine denim brand that has been retailing on Flipkart and Myntra for more than six years.

With this investment, the Flipkart Group and Arvind Fashions will work collaboratively to identify opportunities and synergies to innovate and develop products with strong value propositions at attractive price points, the ecommerce platform said in a statement.

“We look forward to partnering with the team at Arvind Youth Brands to continue to grow the market for its portfolio of products and enhance the strong brand equity that has been built over the last few decades,” said Kalyan Krishnamurthy, Chief Executive Officer, Flipkart Group.

Arvind Fashions Ltd has a portfolio of renowned brands, both international and indigenous, like US Polo Assn., Arrow, GAP, Tommy Hilfiger, Calvin Klein, Flying Machine, Aeropostale, The Children’s Place and Ed Hardy.

It is also India’s leading beauty retailer in partnership with Sephora and owns and runs the value fashion retail chain, Unlimited.

“Given the strong existing relationship with the Flipkart Group, and their presence in online fashion, it was an obvious choice for us to enter into this engagement through which Flipkart and Myntra will be our preferred online partner for the Flying Machine brand,” said J. Suresh, Managing Director and Chief Executive Officer of Arvind Fashions.

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