Gokaldas Exports Ltd expects pressure on its core earnings margins to ease in fiscal 2027 after lower U.S. tariffs under the recent India-U.S. trade deal begin to provide relief, the company’s top executive told Reuters on Tuesday.
The apparel maker, which supplies to global retailers including Walmart, Gap Inc. and JC Penney, derives nearly 75% of its standalone revenue from the United States. It expects quarterly core profit margins to improve to the early double digits from 9.7% reported in the third quarter of fiscal 2026.
Margins had come under pressure after the U.S. imposed steep tariffs on Indian textile and apparel exports. To maintain long-standing client relationships, Gokaldas Exports Expects Margin Relief By FY27 As U.S. Tariff Cut Supports India Apparel Exports offered discounts and absorbed part of the additional costs, impacting profitability.
India’s $38 billion textile export sector had been facing tariffs as high as 50%, significantly steeper than those applied to competitors such as Bangladesh and Vietnam. Following a trade deal earlier this month, tariffs on Indian exports to the U.S. have been reduced to 18%, offering partial relief to exporters.
Managing Director Sivaramakrishnan Ganapathi said the benefits from the revised tariff structure would materialise sometime after the second quarter of fiscal 2027, though he did not provide a specific timeline.
He also noted that uncertainty persists after the Supreme Court of the United States rejected tariff measures introduced under former U.S. President Donald Trump. However, he added that India’s early understanding with the U.S. helped cushion potential disruption.
Gokaldas Exports produces around 90 million garments annually, with exports to the U.S., Canada, the UK and France accounting for the bulk of its ₹38.64 billion ($424.81 million) revenue from operations in fiscal 2025.
The company expects gradual margin recovery as tariff pressures ease and global demand stabilises.
Source: Fibre 2 Fashion
(Rewritten & adapted by Indian-Apparel.com News Desk)
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