Indian textile stocks up 13% today: Here we decode why
What's the story
Shares of Indian textile companies like Trident, Welspun, Gokaldas Exports, KPR Mill, Vardhman Textiles, Alok Industries, Siyaram Silk, and Arvind surged by 3-13% during today's trading session. The rally was triggered by the Donald Trump administration's decision to impose a 35% tariff on Bangladesh. The move is expected to affect Bangladesh's position in the global garment supply chain and benefit India.
Stock performance
What are experts saying?
Ruchit Jain, VP of Equity Technical Research at Motilal Oswal Financial Services Ltd, observed a buying interest in textile stocks due to positive news flows. He expects a gradual upmove in certain textile stocks in the short to medium term. Anshul Jain, the Head of Research at Lakshmishree Investments, also noted that the textile sector is showing clear relative strength against the broader market with potential for a 25-30% rally in coming weeks.
Market dynamics
US deal will be a gamechanger
In the ready-made garment sector in US, Bangladesh has a 9% market share, while India's share currently stands at 6%. To note, India is currently working on a trade deal with the US and an update is expected soon. If tariffs are lowered during this deal's signing, India's competitive edge over Bangladesh in textile category could improve.