Textile Stocks Under Pressure: Gokaldas Exports, Pearl Global, Arvind, Welspun Living Shares Slide After US Tariff Shift

Market Performance

Shares of Indian textile exporters faced another round of selling on Friday, August 1, following unfavorable tariff announcements from the US administration. Major listed textile companies, including Gokaldas Exports Ltd., Pearl Global Ltd., Arvind Ltd., and Welspun Living Ltd., witnessed noticeable declines in early trade.

Key stock movements:

• Pearl Global dropped by 6%, continuing Thursday’s 7% decline.
• Gokaldas Exports slipped over 2%, adding to the 4.5% loss from the previous session.
• KPR Mill fell more than 4%.
• Welspun Living traded 1.3% lower, despite a brief recovery from the day’s lows.

Main News

The renewed weakness in textile counters came after a tariff cut announced by the US administration, favoring Bangladesh, a direct competitor to Indian exporters.

• The tariff on Bangladeshi garments has been reduced to 20%, down from 35% imposed in April.
• In contrast, Indian exporters now face a 25% tariff on shipments to the US.
• The move impacts India's textile competitiveness, especially against Bangladesh and Vietnam, both of which enjoy relatively lower US tariffs.
• Vietnam, after its recent trade agreement, also exports to the US at a 20% tariff rate.

Company Details

Several Indian textile companies derive a large share of their revenue from exports to the US market.

• Gokaldas Exports Ltd. – 50% to 70% of total revenue from US exports.
• Pearl Global Ltd. – Similar 50% to 70% dependency on US.
• Arvind Ltd. – Around 30% of topline from US markets.
• KPR Mill – US market contributes approximately 21% of revenue.

This heavy reliance on US exports has made these firms vulnerable to any changes in trade policy or tariff structures. The recent developments could lead to increased price competition and margin pressures.

Summary of the Article

The sudden reduction in tariffs for Bangladeshi textile exports by the US government has triggered sharp declines in Indian textile stocks. Companies such as Gokaldas Exports, Pearl Global, Arvind Ltd., and Welspun Living bore the brunt of market reactions as the tariff shift now favors regional competitors like Bangladesh and Vietnam.

With a substantial share of their revenues coming from US-bound exports, these firms are likely to remain under pressure unless trade dynamics change. The market sentiment remains cautious, reflecting concerns over India's waning export competitiveness in the textile sector.