American tariff impact: Stocks with more than 70% revenue originating from the United States
In the dynamic world of international trade, some Indian companies are finding themselves in a precarious position, with a heavy reliance on the US market for revenue. This article highlights a few of these companies and the challenges they face due to the recent 25% tariff imposed by US President Donald Trump.
Indo Count Industries, a prominent textile exporter, derives over 70% of its revenue from the US. Other companies in the same sector, such as Natco Pharma and Aurobindo Pharma, Zydus Lifesciences, and Biocon, also have a significant US market dependence, with 40-50% of their revenue coming from the US.
In the auto component sector, companies like Bharat Forge, Mahindra & Mahindra, Balkrishna Industries, Ramkrishna Forgings, Sona BLW, Samvardhana Motherson, and Uno Minda also have substantial US market dependence, with around 40% of their revenue coming from the US.
The heavy reliance on the US makes these companies vulnerable to US-imposed tariffs. The recently announced 25% tariff and discussions of higher tariffs up to 50% could pressure costs, margins, and competitiveness. This has caused selling pressure on shares of these firms amidst concerns over export profitability to the US.
One such company is Goldiam International, a manufacturer and exporter of diamond-studded gold and silver jewellery. Nearly 90% of Goldiam's revenue comes from the US market. The upcoming tariff introduces a significant near-term challenge for companies like Indo Count.
Indo Count, an India-based home textile bed linen company, maintains an omnichannel presence for its branded portfolio, including Wamsutta, Pure Earth, Boutique Living, and more. The US contributes close to 70% of total sales for Indo Count.
The tariff was imposed due to accusations of India having "the most strenuous and obnoxious trade barriers" in the world. US President Trump also hinted at further penalties tied to India's energy trade with Russia.
However, not all is doom and gloom. In FY25, Indo Count doubled down on building steady and sustainable growth across its global markets, with the US as the biggest revenue driver. For investors, it's a good time to focus on business fundamentals, clean governance, and stock valuation.
The tariff could significantly impact Goldiam's top line and operations. Gokaldas Exports, a leading apparel manufacturer, derives over 80% of its revenue from the US market and is expected to feel the heat due to the new tariffs.
India is the global hub for diamond cutting and polishing, with the US accounting for over US$ 10 billion, or 30.4% of India's annual US$ 32 billion in gems and jewellery exports. The upcoming tariff could push up costs and make these products less competitive in the US market.
A lot will depend on how trade dynamics evolve and what moves each company makes in the coming quarters. It's clear that these companies will need to adapt quickly to remain competitive in the US market.
- Indo Count, a prominent player in the home textile sector, derives nearly 70% of its total sales from the US market, making it highly dependent on the US for revenue.
- Goldiam International, a manufacturer and exporter of diamond-studded gold and silver jewellery, generates almost 90% of its revenue from the US market, and the upcoming tariff poses a significant challenge for the company.
- Companies like Indo Count and Goldiam face pressure due to US-imposed tariffs, which could impact their costs, margins, and competitiveness in the US market.
- The tariff was imposed due to accusations of India having "the most strenuous and obnoxious trade barriers" in the world, and it could significantly impact companies with heavy reliance on the US market, such as Indo Count and Goldiam.
- As these companies, including Indo Count and Goldiam, navigate the challenges posed by the tariff, it's essential for investors to focus on business fundamentals, clean governance, and stock valuation to make informed investment decisions.
