LAHORE - The depreciating rupee value against greenback has boosted the profits of largest textile industry of the country, as the listed textile firms profit have jumped by 150 per cent to Rs30.6 billion in fiscal year 2013.

Industry sources said that the fall of rupee has been seen as a positive sign for exports of Pakistan, as the local currency has fallen 8 per cent since the beginning of 2013. Moreover, it depreciated faster in the last two months, as it went down by a sharp 4pc against the greenback.

With a share of over 50pc in the country’s total exports, the textile industry has emerged stronger in fiscal 2013-14.

Industry sources believed that Pakistan’s textile exports are going to benefit from two major reasons, as China is focusing more on the technology sector instead of textile, but yarn demand from China is growing.

Moreover, Bangladesh which is the second biggest textile exporter in the world after China, is not getting the same number of export orders as it was getting a year ago. The country is facing major challenges in safety concerns of textile workers. Recent fire incidents in factories of Bangladesh, where hundreds of workers had died, attracted negative international media coverage.

Favoring fortunes resulted into improved overall textile output in FY13 which can be gauged from 5.9pc (14.7pc) growth in textiles exports to $13.1 billion (Rs1.3trn) The same is reflected from listed textile companies’ profits which increased by Rs18.3 billion (150pc) to Rs30.6 billion in FY13 compared to Rs12.3 billion last year.

The listed companies, which cover 85pc of textile sector market capitalisation, are very small compared to total Pakistan textile industry. So the actual profits of the textile industry would be much more than Rs30.6 billion.

They believe, upward trajectory of profits is mainly attributed to higher volumetric sales and improved margins. Strong cotton yarn and grey cloth demand from China and its neighboring countries has contributed to higher units sales while margins increased due to stable cotton prices and 8pc Pak rupee depreciation against US dollar. To recall, textile makers’ margins got a severe hit in FY12 due to sharp volatility in cotton prices. In FY13, local cotton prices remained stable at an average of Rs6,540 per 40kg whereas in FY12 price range was Rs5,252-9,003 per 40kg which depicts high volatility.

Leading textile industrialists insist that the rise in gas tariff for captive power plants by 17.4pc and electricity rates for industrial units by 57pc in recent months are going to hit the profitability of the sector in the ongoing fiscal 2014.