Raymond to Dr Reddy’s: Textiles, pharma stocks bear tariffs brunt

NEW DELHI: Shares of main pharmaceutical and textile firms have seen a big fall since US President Trump introduced tariffs of 25% on Indian exports. Between July 30 and Aug 5, Gokaldas Exports, among the many high textiles gamers, skilled the steepest fall of 15.9%. The firm’s shares closed at Rs 1,632 on Tuesday, in contrast with Rs 1,707 on July 30. Trump had introduced the tariffs after markets closed on July 30. The new tariffs are efficient Thursday. Other main gamers resembling Vardhman Textiles and Welspun Living additionally noticed worth erosion as traders turned nervous due to the publicity of the businesses to the US market (see graphic). Almost all these firms have main commerce with the US, with Gokaldas exporting round 23% of all its completed items to American consumers. While pharma is at present exempted from larger tariffs, stocks within the sector had been additionally hit. On Tuesday, Trump threatened 250% further obligation on the sector in coming months. Aurobindo Pharma and Dr Reddy’s get almost half their revenues from the US, whereas round a 3rd of Lupin and Sun Pharma’s revenues are linked to the American market, AngelOne mentioned.Aurobindo Pharma scrip was down 6.8% for the reason that July 30 announcement, with Lupin, Sun Pharma and Dr Reddy’s additionally within the purple. In a report, ICRA Research mentioned that Indian pharma firms have a robust presence within the US, which stays one among their most important sources of income. On textiles, it mentioned: “India is currently in a marginally weaker position, and it remains to be seen if it can pass on the steep increase in tariffs to its US customers. The recent imposition of tariffs (and penalties) by the US is likely to disrupt the supply chain and impact volumes and profit margins of Indian apparel exporters in near term.“Textiles exporters are fearing a lack of orders to China and Bangladesh. The unspecified penalty on Indian exports to the US for arms and oil purchases from Russia is including to the uncertainty for homegrown gamers. “Within the textiles sector, companies in the garments and home textiles segments, and those with significant exposure to the US market, are likely to be affected by higher tariffs. That said, India has traditionally had a strong position in the cotton value chain, which should help in redirecting sales to other markets,” mentioned Anand Shah, chief funding officer – PMS & AIF at ICICI Prudential AMC, advised TOI.