Domestic market is expected to recover as the second wave of COVID-19 recedes and the festival season comes closer although uncertainties resulting from the pandemic still persists, according to Arvind Ltd Chairman Sanjay Lalbhai.
In his address to shareholders in the company's Annual Report for 2020-21, Lalbhai said export markets, including the US, are poised to deliver strong growth in coming quarters and overall demand growth is expected this year as retail and distribution pipelines are running low on inventory.
"As expected, FY2021 was a challenging year for our core textiles and apparel businesses. There was a sharp reduction in demand across all markets especially in the early part of the financial year," he wrote.
As the countries learned to live and cope with COVID-19, Lalbhai said, "Many of the export markets started to resume. By the second quarter, several of our export customers had started placing orders, partly driven by their online demand."
Domestic markets started seeing traction around Diwali, he said adding, "Overall, the momentum picked up well in H2 and we wrapped up the year with a strong fourth quarter."
For this year, he said, "I believe that the US and our other export markets are poised to deliver strong growth in coming quarters. Domestic markets will also come back as the second wave of the pandemic recedes and the festival season comes closer."
Lalbhai further said, "This year is likely to see growth in demand for us as retail and distribution pipelines are running low on inventory."
However, he hastened to add that "we are not yet free from the uncertainties resulting from the pandemic and we will continue to watch on both the opportunities and potential risks, and take a balanced approach forward".
"This risk managed approach will guide our day-to-day decisions as well as those related to capital allocation," Lalbhai said.
In FY21, Lalbhai said, the company made "great strides" in strengthening its digital front-end enabling it to serve its global customers much more swiftly.
"Our sampling process has moved online, and sets us up for a much speedier response to the market," he said, adding the company is also investing in blockchain based solutions to improve traceability of inputs.
In summary, he wrote, "While I don't see the challenges facing your company and the world at large completely fade away in the next few days, I would like to assure you that we are well poised to take advantage of the opportunities that will unfold."
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