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The spectre of steep US tariffs hammered has Indian textile stocks over the past month. Until 26 August, shares of Trident Ltd, Arvind Ltd, Welspun Living Ltd, and Indo Count Industries Ltd had shed 10-15%, while smaller peers such as Himatsingka Seide Ltd, Kitex Garments Ltd and Faze Three Ltd suffered even deeper corrections. Those fears crystallized on 27 August, when Washington issued a draft notice to impose 50% tariffs on Indian imports.
For companies with large exposure to the US, the move threatens volumes, margins and, ultimately, earnings downgrades unless a trade deal is reached.
Also Read | India braces for the pain of Trumpa？？s stiff tariffs
a？？Retailers were comfortable with 25% tariffs imposed earlier (~5% disadvantage) which could have been absorbed through negotiations, cost optimization programs, and incentives. But we believe exporters will not be able to bear the impact of the additional 25% US tariff," said an Antique Stock Broking Ltd report on 28 August. So, Antique has cut FY26/FY27 and FY28 earnings estimates for Arvind by 13%/17%/10% respectively and for Welspun by 15% for each year.
Also Read | Five Indian textile stocks that could gain from US tariffs in 2025
The math is stark: higher tariffs could render Indian exports unviable, especially when rivals in China, Bangladesh, Pakistan and Vietnam face lower duties.
That makes diversification more urgent. Arvind, for instance, does around a？1200 crore worth of business in the UK and expects this to double in the coming years under new trade enablers. With the UK FTA, the Welspun management aims to increase its non-US exposure from about 40% currently, while Gokaldas Exports expects contribution from the UK and the European Union to reach 20-25% by FY26-end from the current 13%. Further, its recent acquisition of Atraco also provides a cushion, since Kenyan and Ethiopian units supplying to the US market face only 10% tariffs.
Also Read | Textiles to tech: Seven stocks that stand to gain from the India-UK FTA
Beyond Europe, West Asia could open fresh lanes of growth. According to Dun & Bradstreet, Indian textile makers can consider targeting hotel chains and luxury real estate projects in Saudi Arabia and the United Arab Emirates (UAE) to anchor long-term demand.
a？？Saudi Arabia and the UAE offer expanding, high-income markets with rising hospitality and tourism sectors driving demand for premium bed linens, home textiles, and ethnic wear. Indiaa？？s competitive edge in quality cotton and blended fabrics, coupled with existing trade goodwill, allows for a premium positioning," it said in a recent report. While diversification seems to be an apt strategy in the current backdrop, it will take time to yield results.
Back home, the government has offered short-term relief.
On 18 August, the Ministry of Financea？？s Department of Revenue notified duty-free cotton imports by scrapping customs duty and the Agriculture Infrastructure and Development Cess. This exemption is valid from 19 August- 30 September. At a time when the Indian textile sector is facing high cotton costs and additional pressure from US tariffs, with this move duty-free imports would allow access to cheaper international cotton.
The import duty relief is a short-term positive for all in the textile value chain, with a major edge for spinners and fabric manufacturers, said Elara Securities (India) in a report dated 19 August.
a？？With about 42 days of import duty relief, it may be optimized by the companies that have already placed orders to import cotton as it requires about 30-45 days shipping time," it said. While this relief may temporarily improve margins of Indian exporters for one-two quarters, it is unlikely to materially change the long-term cost competitiveness of Indian companies, cautioned Elara.
In his Independence Day address to the nation, Prime Minister Narendra Modi promised a Diwali gift in the form of sweeping goods and services tax (GST) reforms. This announcement comes just as India faces fresh pressure from abroad. With US President Donald Trumpa？？s steep 50% tariffs on Indian exports now in effect, reviving domestic demand has become critical.
If the plan goes through, GST slabs will be rationalized in a way that lowers the tax burden across most consumer goods. Reports suggest the 12% and 28% slabs will be scrapped, with nearly all items in the 12% category moving down to 5% or zero, and most of the 28% slab items shifting into the 18% bracket. Sin and luxury goods will remain heavily taxed at 40%, but even these may get cheaper over time as the Compensation Cess is phased out.
Also Read | GST 2.0 reform: Fewer slabs, lower rates, end of cessa？？what it means for you
That makes this more than just a tax tweak; it is a bet on consumption. The government is counting on lower GST at the point of sale to succeed where income-tax cuts and monetary easing have failed: reviving household demand, giving fresh life to struggling sectors, and setting the stage for private investment.
While the full contours of GST 2.0 will only be clear after the GST Councila？？s meeting next month, investors are already placing their bets on which sectors stand to gain the most. From autos and FMCG to cement and financials, the impact could be far-reachinga？？if the gamble works.
Auto sales and the much-needed push
The auto industry has been on a slowdown lately. Even as premium car sales have performed decently, small cars have dragged down overall auto sales. The management of Maruti Suzuki India has been particularly vocal about the need for the governmenta？？s intervention to make small cars more affordable.
The promised GST cut seems to have answered those prayers. Maruti is also expected to benefit from the anticipated tax cut on hybrid cars. As small cars drop into the 18% GST bracket, the resulting 8% drop in prices could be exactly what the buyers needed to trade up from 2-wheelers to small cars. Marutia？？s stock has appreciated by 14% in the two weeks since the announcement.
Also Read | Bhargava bats for lower car GST, says it will power sales
If the customers who upgrade from 2-wheelers to small cars are replaced by new buyers in the 2-wheeler segment, players like Hero MotoCorp and Bajaj Auto are also expected to benefit. Similarly, Ashok Leyland and Eicher Motors would benefit as the GST on commercial vehicles gets slashed from 28% to 18%.
That on tractors is likely to drop from 12% to 5%, resulting in about a 6% drop in prices if the entire GST cut is passed through. This should prop up the sales for the likes of Mahindra and Mahindra. The Nifty Auto Index has appreciated by 3.8% since the GST cut announcement on 15 August, sharply outperforming the broad marketa？？s 0.4% correction since then.
Consumption finally in focus?
Consumption demand has been patchy in India. Following the pandemic, a K-shaped recovery gave way to a monsoon-led rural recovery, while mass urban demand struggled.
The Reserve Bank of India (RBI) has slashed rates by 100 bps this fiscal year, and the finance ministry had announced massive income-tax cuts during the last budget. But neither monetary nor fiscal push has been able to move the needle on demand yet.
In this context, all hopes are pinned on the GST cuts. It is hoped that the reduction in point-of-sales taxes will do what income-tax cuts could not. Nifty FMCG Index has delivered about 12.5% CAGR over the last five years, sharply underperforming the 16.5% CAGR delivered by the broader market. As GST cuts lead to prices dropping by 4-5%, it could result in the much-awaited recovery in fast moving consumer goods (FMCG).
In recent quarters, we have had evidence that FMCG demand is not inelastic. Price hikes undertaken by FMCG majors recently have resulted in a drop in volumes, as consumers shifted to unbranded inorganic players. So, it is reasonable to expect that price cuts would lead to a pick-up in demand.
Of course, consumer discretionary purchases are expected to be more elastic. Drops in prices are more likely to push up the demand for air conditioners and refrigerators than that for soap. Key beneficiaries would include the likes of Voltas and Bluestar. This would give a much-needed leg up to consumer durables, which have underperformed so far in 2025.
A pick-up in demand is also critical from a macroeconomic point of view. If consumption picks up pace, the cobwebs on private capital expenditure (capex) are also likely to clear up. Since government capex can pull an economy only so far (keeping fiscal prudence in mind), a pick-up in private capex is crucial to support GDP growth.
Increased consumer confidence and private-capex-led GDP growth would, in turn, benefit the banking and financial services (BFS) sector. With stress among lenders likely to bottom out in the next quarter or so, BFS stocks appear ripe for picking.
Cement a？？ premiumization play
The cement sector has seen green shoots recently. After years of intense competition, pricing pressures and eventually, industry consolidation, prices have returned to an uptrend.
Notwithstanding the microtrend seen over the last couple of months when monsoons led to prices struggling, the medium-term trend has been positive. This has supported margins, while inorganic expansion has helped revenue-growth for the large players.
While the GST rationalization will reportedly bring down cement from the 28% tax slab to 18%, demand for cement is inelastic. More than half of Indiaa？？s cement demand comes from house construction. Cement comprises 6% of the cost of building a new house, and 12-14% of the cost of renovation. Assuming that the entire cut is passed through to consumers, the price of cement is expected to moderate from approximately a？1350 a bag to a？1325. This will lead to a less than 1% drop in overall construction cost.
Also Read | Why cement companies need a concrete pricing fix more than just a GST cut
So, the GST cut is unlikely to lead to more demand for cement. So, the GST cut is unlikely to lead to more demand for cement. Instead, the demand for cement would be driven by private capex and the governmenta？？s push for affordable housing, transportation, and infrastructure. That said, the GST cut can lead to a shift in demand towards higher-grade cement.
This, in turn, would result in higher margins for manufacturers. Furthermore, as premium products achieve deeper penetration, topline growth can pick up pace as well. Industry experts believe penetration of category A cement could expand from 40% to 55-60% by FY30. This should be particularly beneficial for pan-India players like Ultratech and Ambuja.
Caveats
The details of the promised GST reforms are not out yet. The GST Council is slated to meet on the 3-4 of September to decide on the proposal. The finance ministry has indicated an impact of a？150,000 crore, as per a note by Motilal Oswal. This adds up to less than 20 bps of GDP. Considering that early reports had highlighted a hit of 30-40 bps on GDP, speculation has been wide-ranged.
The actual impact on demand would depend on which way the fine print tilts. If the government attempts to make up for the revenue loss by ramping up other taxes, the demand-push would be limited. Sectors such as real estate could also benefit from the GST cuts. But considering the sharp rally in such sectors in recent years, the scope for further upside is limited.
For more such analyses, read Profit Pulse.
Even in undervalued sectors like consumption, consumers may postpone demand to after Diwali in anticipation of the GST rate cut. Ironically, this could result in a hit to revenue growth in the quarter ending September 2025. The impact of the GST cuts would only show up starting Q3FY26. Until then, global factors, including tariffs, can keep markets antsy.
Ananya Roy is the founder of Credibull Capital, a SEBI-registered investment adviser. X: @ananyaroycfa
Disclosure: The author holds shares of some of the companies discussed. The views expressed are for informational purposes only and should not be considered investment advice. Readers are encouraged to conduct their own research and consult a financial professional before making any investment decisions.
Uno Minda Ltd shares hit a new 52-week high of a？11,301 on Thursday. The stock has surged 23% so far this calendar year, outperforming Nifty Autoa？？s 10% return as investors have rewarded the company for growing faster than the industry it serves.
Two-wheeler and passenger car manufacturers account for 46% and 47% of the total revenue for the automotive systems and components manufacturer. In the June quarter (Q1FY26) Uno Mindaa？？s revenue grew 16% year-on-year to a？14,420 crore, adjusted for one-off item of prior period incentives received from states with manufacturing plants. This is impressive, considering two-wheeler sales volume (including exports) grew just 9% year-on-year and passenger cars volume (including exports) was almost flat in Q1FY26.
Also Read | SAILa？？s ambitious capacity addition plan faces oversupply risk
For Uno Minda, 89% of revenue comes from India. Almost all of it is from sales to automobile manufacturers or original equipment manufacturers (OEMs), with replacement sales making up a tiny portion. This insulates it from the impact of US import tariffs as that country accounts for less than 2% of its revenue.
Outpacing the auto industry
Q1FY26 was not an aberration for Uno Minda. The company doubled its consolidated revenue to a？116,775 crore in the three years to FY25 (post-covid period). Revenue grew at a 26% compound annual rate, at least twice thesales volume growth of the auto industry.
So, how did Uno Minda manage to grow faster than the industry it caters to? By expanding its product portfolio to grab bigger wallet share of OEMs. It has a broad product portfolio that includes automotive switches, castings, seats and acoustics, to name a few. Selling more manufacturing parts per vehicle has worked well. Also, most of its products work with both conventional and electric vehicles.
Also Read | Maruti's EV export push: Why it may be a winning strategy for investors
Uno Mindaa？？s focus was on achieving a healthy return on capital employed (RoCE) rather than increasing Ebitda margin. While Ebitda margin remained in the 10-11% range, RoCE expanded from 16% in FY22 to 19% in FY25. Nonetheless, management is upbeat on margin expansion in the next couple of years as new businessessuch as four-wheeler alloy wheels and airbags stabilise.
The company is likely to incur growth capital expenditure of about a？11,300 crore in FY26 spread over 13 ongoing projects, with some likely to go on stream this year itself. A significant chunk of the capex a？？ a？1500 crore a？？ has been allocated to products for the two-wheeler EV industry, which is growing faster than conventional vehicles.
Disruption and other risks
On the flip side, Nomura Global Markets Research has flagged some risks. Uno Minda has forged strong partnerships for successful diversification into new products. For example, it has a joint venture with Suzhou Inovance Automotive to manufacture EV components. However, it must ensure these partnerships continue to avoid being disrupted by technological advancements.
Also, its new products categories such as electronic sensors for detecting objects and electric motor controllers are already dominated by global players. This could make it tough to grow.
Also Read | Bata India stock struggles to regain its feet amid growth problems
Plus, valuations are expensive. The stock has already achieved Nomura's target price of a？11,304, which is based on 45 times its average earnings-per-share estimates for FY27 and FY28. Uno Mindaa？？s revenue growth rate has declined due to high base and challenging auto industry environment, but any revival in the domestic auto industry, with a likely impetus from GST rate cuts, could be the upside trigger the stock needs.
Indian stock markets stumbled on Thursday's monthly expiry, showing that the upward trend is still facing significant pressure. The possibility of higher gains seems to be on hold as we head into the last trading day of the week. This is a challenging period for traders.
Against this backdrop, market expert Raja Venkatraman has released his top stock recommendations for investors seeking opportunities today, 28 August. His analysis provides a clear roadmap for navigating the current market landscape with confidence.
Also Read | Tariff shock, expiry week. Which way will the markets go?
Three stocks to trade, recommended by NeoTradera？？s Raja Venkatraman:
Uno Minda Ltd(current market price a？11,295.60) - Buy at a？11295 and dips to a？11250, stop loss a？11225, target price a？11360-1385
Why ita？？s recommended: Uno Minda is a global Indian-based manufacturer of automotive systems and components, serving Original Equipment Manufacturers (OEMs) in the automotive industry since 1958. The last two days prices are holding the bullish bias and the possibility of more upward traction has also emerged as it has moved above the recent highs. As momentum remains resolute one can look at more upside in store in the next few days.Key metrics:P/E: 84.28,52-week high: a？11295,Volume: 1.53M.
Technical analysis: Support at a？11190, resistance at a？11400.Risk factors: High debt levels, dependence on major customers, economic downturns could impact returns.Buy at: CMP and dips toa？11150.Target price: a？11295-1250 in 1 month.Stop loss: a？11225.
India Cements Ltd (current market price a？1384.55) - Buy at a？1385 and dips to a？1367, stop loss a？1350, target price a？1425-440
Why ita？？s recommended: India Cements is a cement manufacturing company based in Chennai. It is the ninth-largest listed cement company in India by revenue. The stock has spent the last few days in consolidation and the strong rebound from lower levels indicate new-found buying. The price action highlights some new found momentum. With robust volume lead breakout consider going long at current levels and also on dips.
Also Read | Indian cement stocks become dearer than some global peers
Key metrics:52-week high: a？1400.30Volume: 729.05K
Technical analysis: Support at a？1350, resistance at a？1450.Risk factors: Market fluctuations, regulatory changes, and sector-specific challenges in the distribution industry.Buy at: 385 and dips to a？1367.Target price:a？1425-440 in 1 month.Stop loss:a？1350.
Bikaji Foods International Ltd (current market price a？1794.85) - Buy above a？1795 and dips to a？1760, stop a？1750 target price a？1845-865
Why ita？？s recommended: The FMCG space is buzzing and is seen bucking the trend in certain counters. The trends in this counter have been on a steady upward rebound, with the last few sessions witnessing some steady buying. Also, a trend crossover was seen on Thursdaya？？s bearish market has now fuelled more buying interest in the counter. Consider a buy.
Also Read | Private equity eyes fresh bite of regional food brands, repeat of Haldiram
Key metrics:P/E: 92.50,52-week high: a？1675,volume: 948.59K.
Technical analysis: Support at a？1560, resistance at a？1900.Risk factors: Market volatility and fluctuations in raw material costs could impact profitability.Buy at: above a？1795 and dips to a？1760.Target price:a？1845-865 in 1 month.Stop loss:a？1750.
Stock Market Today
Markets witnessed a second straight session of profit booking on 28 August, with benchmark indices falling nearly 1% following the implementation of 50% US tariffs on India. The Nifty slipped below 24,500 intraday, extending Tuesdaya？？s decline, while the Sensex closed 705.97 points lower at 80,080.57.
The Nifty ended down 211.15 points at 24,500.90. Broader indices mirrored the weakness, with the BSE midcap and small cap indices shedding 1% and 0.9%, respectively.
Despite a weak start, the Nifty briefly rebounded before selling pressure in heavyweight sectors dragged it to the daya？？s low. IT, realty, and banking stocks led the decline, while consumer durables saw selective buying. Top Nifty losers included Shriram Finance, HCL Tech, TCS, Power Grid, and Infosys. Gains were led by Titan, L&T, Coal India, Asian Paints, and Hero MotoCorp. The monthly expiry added to volatility, reinforcing the ongoing corrective phase in the market.
Outlook for Trading
Moving to the charts we note that the trends have been largely oriented towards trading rather than investing. After testing the gap support region, the market opened to a negative start and the drop on Thursday was quite steep. Hence , from a trading perspective we can note that on the Daily charts the prices are trading below the cloud as well as TS & KS line. Also , the constant sell at every rise could prove to be a threatening blow to the sentiment. The successive negative candles seen in the Daily chart of Nifty in the August series does not bode well for the market.
The trend that is emerging clearly suggests that the rally seen last week was a holding the resistance zone and the gap up opening ensured that the prices traded above the range area that developed in the last few days. Hence , one should track the trends that are in progress as the fall below 24350 (Nifty Spot) could accentuate the fall further. Momentums on hourly charts are indicating that the prices after settling down seems to have witnessed a resumption of selling pressure. With the sharp decline emerging from higher levels, we can expect the rally if any to remain a supply.
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(Source: TradingView)
We had said, a？？For undertaking shorts, we need to see Nifty move below 24500 for a potential drop towards 24200 and 24050 as per the Open Interest data a sharp fall is expected once key resistance levels break."
The markets are once again at this crucial juncture on the Nifty expiry as it has closed below the Max Pain at 24600, we are entering the September series with a bearish bias.
Also Read | Maruti's EV export push: Why it may be a winning strategy for investors
If we witness a 30-minute range breakdown on Friday we can consider trading on either side as the trends still remain tentative where we expect some resistances to kick in. As bearish market trends are in play, we need to be quick in profit taking as we the trend does not have sufficient steam to move strongly in either direction.
At this juncture we have to pay attention to Trump's tariffs that have dampened investor sentiment, and domestic economic challenges that shall contributed to the sharp market decline and volatility in the rupee.
Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223.
Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
A one-two punch from hefty Trump tariffs and a sustained exodus of foreign capital threatens to push the Indian rupee to a new record low, potentially providing relief for struggling exporters but also making imported goods more expensive.
Experts anticipate the currency could slide past 88 to the dollar, while the Reserve Bank of India (RBI) limits its intervention to curbing excessive volatility rather than defending any specific currency level. The rupee gained five paise against the dollar to close at 87.63 on Thursday, with market participants pointing to likely RBI intervention through some large banks.
a？？The fact is, that there is going to be an immediate term impact on the economy, and therefore, on the currency," said Dipti Deodhar Chitale, chief executive at treasury risk consulting and forex risk advisory company Mecklai Financial Services.
Volatility check
According to Chitale, the RBI will keep intervening to absorb flows and curb excessive volatility; and the rupee will remain under pressure and possibly touch 88.2 to a dollar, potentially as early as a fortnight. a？？I understand that the RBI was believed to be present in the currency market today through some large banks, at around 87.69 level," said Chitale.
According to Chitale, the RBI needs to let the rupee weaken so exports remain competitive, and that is something the current dispensation at the central bank has not shied away from. a？？Under the new governor, RBI is now intervening only against wild swings and not to target any level," she added.
Also Read | Retail investors' verdict: Tariffs cana？？t trump a good bet
US President Donald Trump has imposed 50% tariffs on India, including a 25% levy for buying Russian oil. The punitive tariff came into effect on 27 August. As per data compiled by Barclays, the US has the highest import tariff on India, followed by regional peers China at 30%, and Vietnam and Sri Lanka at 20% each.
a？？Courtesy of the tariff, the loss of exports will be to the tune of $20 billion or half a percent of gross domestic product (GDP)," said Sujan Hajra, chief economist and executive director, Anand Rathi Group.
Heat on CAD
FPIs have net sold a？12.1 trillion worth of Indian shares in the secondary market since November till Tuesday, data from the National Securities Depository Ltd showed.
Higher tariffs on exports to the US and the resulting decline in trade are expected to widen Indiaa？？s current account deficit by half a percentage point. Hajra said that a one percent increase in current account deficita？？when imports surpass exportsa？？results in a 5% fall in rupee, and this is why the domestic currency is expected to depreciate by around 5-5.5% against the annualized 3% every year for the past three years.
Troubles have mounted for Indiaa？？s small businesses, after challenges from the implementation of the goods and services tax (GST) and covid-19. Sectors like textiles, jewellery, apparel, seafood, machinery and mechanical appliances, chemicals, and auto components are expected to bear the brunt of Trumpa？？s tariffs. Economists estimate Indiaa？？s growth rate to decline 20-30 basis points on the back of these tariffs.
Also Read | Foreign investors dump Indian stocks as dollar returns shrink
Some said the rupee's depreciation since the beginning of the year could not have come at a better time. The rupee has been the worst-performing currency among peers, weakening 4.2% since 1 November, days before Trump won the US presidential election, Bloomberg data showed.
Much discounted
a？？The Indian rupee has currently discounted a lot of what is happening on the trade front because it is one of the weakest currencies among peers. Rupee has enough cushion as far as relative performance is concerned," said Anindya Banerjee, vice-president, currency derivatives and interest rate derivatives at Kotak Securities Ltd.
a？？I think the RBI will protect the 88-level for rupee and on the downside, I don't see big appreciation beyond 86.8. However, if it (dollar) breaks above 88, it will be because of some kind of global risk but the pace will be contained by the RBI."
Banerjee is hopeful that the overall economic impact of the tariffs would not be significant. a？？We all know how the Trump administration keeps flip-flopping on their trade decisions, using it as a negotiating tool," he said. He is also pegging his optimism on RBI governor Sanjay Malhotra pledging support for growth and to sectors impacted by the tariffs earlier this week.
Also Read | RBI sees minimal impact of Trump tariffs on Indian economy: governor Malhotra
a？？RBI has made it clear that they will not be a mute spectator. This means that they would be not only giving ample support to the sectors and to the economy, but will also be present in the forex market. That is exactly what we are seeing today," said Banerjee.
Meanwhile, others also see the rupee hitting 88 against the dollar. a？？Rupee targets are unchanged as of now at 86.5 to 87.5 for the next three months with a worst case of 88, based on RBI action," said Madan Sabnavis, chief economist, Bank of Baroda.