Indian markets will do better as and when Chinese economy opens up, says Filatex CMD

“The markets are not very good because of China. They are dumping the goods everywhere, and hence, margins are under pressure,” said Madhu Sudhan Bhageria, CMD, Filatex India.

Bhageria said that as and when China opens up, India is likely to do better. "And going forward, we should do more than double digit of the EBITDA,"  he added. The Chinese economy had been under pressure ever since government imposed strict curbs amid COVID outbreaks in the country.

The yuan on Wednesday slumped to its weakest since the global financial crisis in 2008. Bloomberg  reported, based on a survey, that economists expect the gross domestic product growth to slow to just 3.4 percent this year, which outside of 2020 would be the slowest pace in more than four decades.

Bhageria highlighted that while the demand is good, availability of raw material is still a challenge. “Demand side is good. Raw material availability is slightly a challenge because there is some disruption in the local supplies. And internationally also availability of one of our raw materials monoethylene glycol (MEG) is pretty low.”

The supply chain had been disturbed due to COVID pandemic with tensions accelerating further due to the Russia-Ukraine war.

Bhageria explained that the domestic consumption is low in China and as a result, they are "dumping" their products everywhere in the world at lower prices. “Their internal consumption has fallen. Whatever they are producing, although they have cut down on production, they are trying to dump everywhere in the world at lower prices.”

Talking about India's dependence on China for importing raw material, Bhageria said that imported yarn from China now constitutes 8-10 percent of the total yarn used in the country. “Six to eight months ago, it was a very negligible part, maybe 1-2 percent, of the total consumption of India. Now it has gone to almost 8-10 percent.”