Shares of Gokaldas Exports, Avanti Feeds, Pearl Global Industries among other export-oriented firms were in focus in Friday’s trade ahead of a key ruling by the US Supreme Court on President Donald Trump’s use of emergency powers to impose tariffs.
The case will decide whether Trump can invoke the International Emergency Economic Powers Act (IEEPA) to levy tariffs without congressional approval. During arguments in November, the justices indicated scepticism over Trump’s authority to impose such duties.
Analysts said export-linked stocks could see a rally if the court strikes down the tariffs, though they cautioned that alternative policy measures could limit the upside.
Ajit Mishra, senior vice-president (research) at Religare Broking, said export-oriented stocks had seen a recent rebound on expectations of relief from the US Supreme Court.
"However, we believe market participants should temper their expectations, as the US government has planned other legislative measures to maintain or even raise tariffs in the event of an adverse ruling. Moreover, the recent weakness in broader markets further underscores the need for caution at current levels," Mishra added.
Over 900 lawsuits had been filed in the US Supreme Court on behalf of businesses seeking tariff refunds, according to a tally compiled by Bloomberg. Company executives, customs brokers and trade lawyers are now bracing for the ruling, which can open up the possibility of obtaining perhaps $150 billion in refunds from the US government for duties already paid by importers in case Trump loses.
Shares of Gokaldas Exports rose nearly 3 percent to Rs 642.5 on the NSE. More than 60 percent of the company’s revenue comes from the US market. According to BSE Analytics data, the stock is down nearly 41 percent over the past one year.
KPR Mill shares fell 3 percent to Rs 826.7, while Pearl Global Industries gained about 2 percent to Rs 1,522.
Avanti Feeds shares declined more than 2 percent, and Apex Frozen Foods fell nearly 6 percent to Rs 260.25.
Sunny Agrawal, Head of Fundamental Research at SBI Securities, said "The overhang of Trump’s tariffs is likely to continue on export-related businesses such as Gokaldas, Avanti Feeds, among others."
"Today’s U.S. Supreme Court hearing can have multiple takeaways. In the first scenario, the U.S. Supreme Court strikes down Trump’s tariffs. In that case, the U.S. President can challenge the ruling, and the tariffs may continue for a longer period, so the overhang remains. In the second scenario, there is no clear ruling by the U.S. Supreme Court; in that case, too, the tariffs continue on all such businesses. In the third scenario, the U.S. Supreme Court gives a decision in favour of Trump’s tariffs; in that case as well, tariffs may continue on all export-led Indian businesses. I think that in all three scenarios, the overhang will continue until India and the U.S. formally come together to roll back the extra tariffs that the U.S. has imposed on India for importing Russian crude oil."
These stocks have seen sharp volatility in recent months as they derive a large portion of their revenues from the US market. The pressure intensified after Trump raised tariffs on Indian imports to 50 percent, citing India’s purchase of Russian oil.
Shares also reacted to Trump’s approval to move forward with a bipartisan sanctions bill proposing a 500 percent tariff on countries continuing to do business with Russia, including India, China and Brazil.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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