India and the US have agreed to a trade deal after months of negotiations with the overall tariff rate coming down to 18% from 50% that was in place till date. This puts all the export oriented names in the spotlight for Tuesday’s trading session. They range from Textile stocks like Gokaldas Exports, to Shrimp stocks like Avanti Feeds, and even IT services names such as Infosys, Persistent Systems, TCS, and others.
1 / 5India and the US have agreed to a trade deal after months of negotiations with the overall tariff rate coming down to 18% from 50% that was in place till date. This puts all the export oriented names in the spotlight for Tuesday’s trading session. Here’s a look at some of them:
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2 / 5Textile Stocks | Textile stocks such as Gokaldas Exports, Welspun Living, KPR Mill were the worst hit due to the tariffs, as 50% to 70% of their revenue came from the US market. The reduction of tariff to 18% puts them at a better tariff rate compared to other garment rivals such as Bangladesh and Vietnam, who are both taxed at 20%.
3 / 5Shrimp Exporters | The US was the biggest market for Shrimp exporters and while they did manage to find other avenues for their products, particularly the European Union and China, the US remains their biggest destination. Stocks such as Avanti Feeds, Apex Frozen Foods, among others will be beneficiaries of this announcement.
4 / 5IT Stocks | While services were never in the line of tariffs during these negotiations. the stocks were impacted first due to the H-1B negotiations and then surged as the currency kept depreciating to new lows due to lack of clarity on the trade deal front. A weaker rupee translates into better margins for the IT companies, but with the currency most likely to strengthen on Tuesday after the announcement, it remains to be seen how stocks like TCS, Infosys, HCLTech, Persistent Systems, and Coforge, react to this announcement.
5 / 5Bharat Forge | The company has significant exposure to the Class 8 truck market in the US and the reduction of tariffs would be a positive for the stock. In addition to CVs, the company also has a defence vertical and with the US-India defence partnership continuing, the street will be hoping that it translates into more export orders for the company.
