From Vardhman, Bombay Dyeing, Welspun To Trident: What Fuelled Textile Stocks Rally Today?

As United States President Donald Trump's trade tariff announcements sent shockwaves across global stock markets, textile companies listed on the Indian stock market witnessed a jubilant rally on Thursday. From Vardhman, Bombay Dyeing, Surat Trade to Trident nearly all textile sector stocks ended the day in green.

Donald Trump announced a 27% reciprocal tariff on India on Wednesday, April 2. According to experts, US reciprocal tariff will have no incremental impact on large exporting sectors like IT services, Pharma and Autos.

The 27% reciprocal tariff imposed by the US on India is relatively lower compared to other south Asian countries. Additionally, pharmaceutical sectors have been exempted from the imposed tariffs. Apart from all these sectors, textiles will also likely to benefit from the current trade disruptions due to Trump tariffs.

Textile Sector Stocks Rally

Shares of Vardhaman Textile Limited and Maral Overseas hit the upper circuit on Thursday as they ended the session at Rs 479.65 and Rs 75.35 apiece respectively., Welspun Living Ltd shares closed nearly 2% higher at Rs 133.85 per share. BSE Smallcap textile firm Bombay Dyeing and Manufacturing Company ended the session 2.85% higher at Rs 140.55 per share. Another textile firm Surat Trade and Mercantile shares were also up 5.73% on BSE today.

How Trump Tariffs Will Benefit Indian Textile Industry

Indian exports to the US constitute a decent chunk of textile products and the US tariff rates on India are comparatively lower than other textile exporting firms including Vietnam and Bangladesh. This, according to experts, will create a favourable situation for the Indian textile manufacturers.

"There is an opportunity for Indian textile industry in the current scenario. It started when a political issue started in Bangladesh and the recent tariff announcement will provide additional benefit to the industry and companies like Arvind, Welspun, Gokuldas, Trident, etc should gain," investment expert Ambareesh Baliga told CNBC TV 18 in an interview.

However, Jefferies today noted that the textile industry may witness some negative impact of the US trade tariffs. "Home Textiles names such as Welspun Living, Trident, Himmatsingka, Indocount have 40-60% direct revenue exposure to the US. Even fabric and yarn companies (Vardhman Textiles, Arvind, KPR mills) would be impacted as their B2B customers are exposed to the US," noted Jefferies in its report released on April 2.

According to an analysis by Kotak Securities, India is likely to be at better placed in most of the sectors compared to peers like VIetnam, China, Thailand, Malaysia, Japan, etc. These sectors majorly includes chemicals, electronics, gems and stones, pharmaceuticals, metals, etc.

For textile sector, average US tariff on export from India stood at 17%, which is lower than 33% tariff imposed on exports from Vietnam, 23% tariff imposed on exports from China, and 26% tariff imposed on exports from Thailand.

Highlighting the movement of major textile sector stocks during Thursday's trading session,Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd noted, "Amongst sectors, Nifty IT was the top loser, plunging 4% on concerns over reduced IT spending in the US as a result of inflationary pressure expected to be caused by the tariffs. Auto index was down by 1% as President Trump confirmed the earlier imposition of 25% tariff on automobile and auto-part imports to the US from today. Meanwhile, the Pharma index gained over 2% as the sector was exempted from tariffs for now. Textile stocks gained as India's textile sector could be a beneficiary in the near term with higher US tariffs on some of the key competing countries."

Textile products exported from India constituted nearly 2% of the total Indian exports to the United States in financial year 2024-25. Export the United States constitute 19% of the total items exported from India in FY25. As the uncertainty around Trump tariff has settled down, the stock market will now focus on the upcoming RBI monetary policy meet, se to take place on April 9.

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