Motilal Oswal Initiates Coverage on Eight Textile Stocks, Sees Up to 39% Upside

Motilal Oswal Financial Services (MOFSL) has initiated coverage on eight leading textile companies, expressing a positive outlook on India’s textile sector as global demand recovers and supply chains continue to diversify away from traditional manufacturing hubs. The brokerage expects the sector to benefit from improving export conditions, favourable trade policies, and upcoming free trade agreements (FTAs), projecting upside potential of up to 39% for select stocks.

According to the brokerage, India is well-positioned to emerge as a preferred global sourcing destination for textiles and apparel, supported by easing inflation, inventory normalization in key export markets such as the United States and Europe, and expected FTAs with the UK and European Union.

Five Stocks Receive ‘Buy’ Rating

Motilal Oswal has initiated coverage with a ‘Buy’ rating on:

• Gokaldas Exports

• Indo Count Industries

• Arvind Limited

• Pearl Global Industries

• Welspun Living

Meanwhile, Vardhman Textiles, KPR Mill, and Trident have been assigned ‘Neutral’ ratings.

Gokaldas Exports: Growth Led by Capacity Expansion

Among its top picks, Motilal Oswal expects Gokaldas Exports to deliver robust growth through capacity expansion in India and improved utilisation of its Africa operations following the renewal of the African Growth Opportunity Act (AGOA).

The brokerage projects the company to achieve a Revenue CAGR of 18%, EBITDA CAGR of 33%, and Adjusted PAT CAGR of 73% during FY26–FY28.

Motilal Oswal has assigned a target price of ₹1,110, indicating an upside potential of approximately 36%, based on a 14x FY28 EV/EBITDA valuation.

Arvind Expected to Benefit from Business Transformation

The brokerage also remains optimistic on Arvind Limited, citing its strategic transition from a fabric-centric business to a garments-focused model, which offers a significantly larger addressable market. The Advanced Materials Division (AMD), with its higher margins and growth prospects, is also expected to contribute to earnings.

For FY26–FY28, Motilal Oswal estimates 15% revenue CAGR, 23% EBITDA CAGR, and 29% adjusted PAT CAGR. It has initiated coverage with a Buy rating and a target price of ₹670, implying around 30% upside, based on a 13x FY28 EV/EBITDA multiple.

Positive Outlook for India’s Textile Industry

The brokerage believes India’s textile industry is entering a favourable growth cycle, driven by rising global sourcing opportunities, government support, strengthening manufacturing capabilities, and growing demand for diversified sourcing beyond China.

Improving macroeconomic conditions, coupled with trade agreements and investments in capacity expansion, are expected to strengthen India’s position as a global textile manufacturing hub over the coming years