The US dollar has climbed to its highest levels in over a year, with the dollar index reaching 106.21 against a basket of global currencies. This surge is attributed to momentum generated by Donald Trump’s potential political comeback. While emerging markets, including India, often feel the pinch from a strong dollar, one sector in India is bucking the trend: textiles.
The Confederation of Indian Textile Industry (CITI) has expressed optimism about the impact of Trump’s trade policies on India’s textile exports. The US, accounting for 27% of India’s total textile exports in 2023, remains a crucial market. During the first five months of FY24, India’s textile exports to the US grew by an impressive 6%, outpacing key competitors such as China, Vietnam, and Bangladesh.
Among the beneficiaries of this textile boom is Yarn Syndicate Limited, a company with a rich history dating back to pre-independence India in 1946. With decades of experience, it has carved a niche as a leading exporter of yarn varieties, including cotton, polyester, viscose, jute, and bamboo.
The share price of Yarn Syndicate hit an upper circuit on November 18, 2024. The share price has turned multibagger on a YTD basis.
Trump’s earlier tenure emphasized reducing reliance on China, and this policy aligns perfectly with India’s aspirations to increase its share of the US textile market. CITI Chairman Rakesh Mehra highlighted that Trump’s policies previously favored India, urging his administration to continue building a robust India-US trade relationship. He added, “Strengthening ties with the US could help position India as a key alternative to China, marking a new phase in global textile trade.”
Yarn Syndicate’s expertise in high-demand yarns and its established global clientele make it well-positioned to capture the opportunities arising from shifting trade dynamics. With India’s textile exports gaining momentum, the company is poised to benefit from increased US demand, particularly as buyers diversify away from Chinese suppliers.
Yarn Syndicate’s breakout performance reflects optimism about the Indian textile sector, supported by macroeconomic shifts and trade policies. If Trump’s policies further promote India as a preferred trading partner, Yarn Syndicate could see continued growth, solidifying its position as a top pick in the sector.
Investors should keep an eye on this stock as India’s textile story unfolds, with Yarn Syndicate at the forefront of this evolving narrative.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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