Textile stocks extended their losing run to the second day on Wednesday, February 11, as they dropped up to 5% following an 11% decline in the previous session. The fresh bout of selling came after the finalization of the US–Bangladesh trade deal on February 10.
Pearl Global share price emerged as the worst performer in the segment, tumbling more than 5.22% during the session. It had closed 10% lower a day ago. Kitex Garments’ share price was the second-biggest laggard, sliding over 4%, after shedding 7% a day ago.
Shares of Arvind, Go Fashion and Raymond also slipped around 3% on February 11. Other textile players, including Alok Industries, Grasim, Bombay Dyeing and Redtape, declined by up to 2% today.
However, a few counters bucked the trend, with Kewal Kiran Clothing, Jindal Polyfilms and TCNS Clothing rallying as much as 7% even as most of their peers traded lower.
US-Bangladesh trade deal impact on textile stocks
Indian textile stocks had witnessed strong gains last week following the financialisation of the India-US trade deal, which involves lowering tariffs on Indian exports to the US to 18% from 25%. Since the US remains India’s top textile exporter, the announcement was seen as positive.
However, shares of several export-focused textile companies that had risen on hopes linked to the India-US trade framework turned lower amid concerns that reduced tariffs on Bangladesh, along with certain tariff exemptions, could hurt Indian exporters.
The United States has lowered its reciprocal tariff on imports from Bangladesh to 19% under a newly-concluded trade agreement between the two nations, the White House announced on Monday.
The two sides also agreed to tackle non-tariff barriers in Bangladesh, while the US will grant tariff exemptions for select textile and apparel products from the country, according to the White House.
Jashan Arora, Director at Master Trust Group, said that the US-Bangladesh trade agreement, which grants zero-tariff access on select textile categories, is likely to benefit Bangladesh significantly and could alter the competitive dynamics of the sector.
Arora further explained that the market’s sharp reaction in textile stocks reflects concern around near-term revenue visibility and pricing pressure in the sector.
“The US-Bangladesh news is a sectoral inflexion point, not an apocalypse. It will accelerate the divide between low-cost, commoditized exporters and agile, value-added, and diversified textile players,” Arora said.
Focus on companies with niche product positioning, says expert
Arora further recommended investors to reassess their portfolio exposure by identifying companies with structural strengths, such as niche product positioning or superior cost efficiencies, without making sudden exits from the sector.
“The investor’s task is to identify which side of this divide their holdings—or potential investments—stand on. For the strong, this correction is an opportunity. For the weak, not so much. Discernment, not reaction, will be the key to navigating this spin cycle,” Arora added.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
