Pearl Global Set To Mitigate Risks Over US Reciprocal Tariff — Here’s How
The United States is the largest market for the company, accounting for over 60% of its business.
Pearl Global Industries Ltd. is not worried about a possible trade war amidst US President Donald Trump's call for reciprocal tariffs. The United States is the largest market for the company, accounting for over 60% of its business, followed by countries like Spain, the UK, Japan, and Australia.
Speaking to NDTV Profit, Pearl Global Industries' Managing Director Pallab Banerjee said that he doesn't foresee the reciprocal tariffs coming into effect soon, as such action could spike inflation in the US.
"Definitely, there will be a discussion about what impact tariffs will have on imports. There could be inflation. So, it doesn't mean that the tariff would be coming into effect immediately, and the Trump administration will look for a huge amount of inflation. This is because most of the retailers and brands would pass off the increase of their expenditure into the consumer's sector," he said.
Banerjee explained that most garment manufacturing happens in three to four hubs around the world, including the Far East, South Asia or the Indian hub, the Mediterranean, and the Central America region. Most of the top retailers in the US export their goods from these regions. The top executive emphasised that Pearl Global Industries' extensive global presence serves as a buffer against reciprocal tariffs, thanks to its manufacturing facilities across key production hubs.
"We have a major production happening outside of India as well. India contributes to about 25% of our revenue as of now. And some of these very large sectors of the supply chain, Southeast Asia or the Central America or the South Asia regions, do compromise that division of where we are manufacturing and where these customers are sourcing from. So that is a risk mitigating factor for us," he explained.
“If it (tariff imposition) happens, let's say, then I think the probability would be very low. If that happens, then we have, on the other hand, the other markets of the globe. So let's see how this sector does. But I don't believe there would be an immediate impact in terms of tariffs," Banerjee added.
Walmart on Thursday projected lower-than-expected sales and profit for the current year, citing geopolitical instability and fluctuation in the consumer market. Commenting on the development, Banerjee said that while minor fluctuations are common in the consumer market, he expects the textile and garment section to maintain its growth momentum.
"If you look at the US as an overall, especially if you're talking about the textiles and garments, that segment has been growing almost at the rate of anywhere between three to 5% annually. And we don't see a big change in that," he said.
Shares of Pearl Global closed 1.54% lower at Rs 1,434.5 apiece on the NSE on Friday, compared to a 0.51% drop in the benchmark Nifty at 22,795.9.Pearl Global Industries Ltd. is not worried about a possible trade war amidst US President Donald Trump's call for reciprocal tariffs. The United States is the largest market for the company, accounting for over 60% of its business, followed by countries like Spain, the UK, Japan, and Australia.
Speaking to NDTV Profit, Pearl Global Industries' Managing Director Pallab Banerjee said that he doesn't foresee the reciprocal tariffs coming into effect soon, as such action could spike inflation in the US.
"Definitely, there will be a discussion about what impact tariffs will have on imports. There could be inflation. So, it doesn't mean that the tariff would be coming into effect immediately, and the Trump administration will look for a huge amount of inflation. This is because most of the retailers and brands would pass off the increase of their expenditure into the consumer's sector," he said.
Banerjee explained that most garment manufacturing happens in three to four hubs around the world, including the Far East, South Asia or the Indian hub, the Mediterranean, and the Central America region. Most of the top retailers in the US export their goods from these regions. The top executive emphasised that Pearl Global Industries' extensive global presence serves as a buffer against reciprocal tariffs, thanks to its manufacturing facilities across key production hubs.
"We have a major production happening outside of India as well. India contributes to about 25% of our revenue as of now. And some of these very large sectors of the supply chain, Southeast Asia or the Central America or the South Asia regions, do compromise that division of where we are manufacturing and where these customers are sourcing from. So that is a risk mitigating factor for us," he explained.
“If it (tariff imposition) happens, let's say, then I think the probability would be very low. If that happens, then we have, on the other hand, the other markets of the globe. So let's see how this sector does. But I don't believe there would be an immediate impact in terms of tariffs," Banerjee added.
Commenting on the development, Banerjee said that while minor fluctuations are common in the consumer market, he expects the textile and garment section to maintain its growth momentum.
"If you look at the US as an overall, especially if you're talking about the textiles and garments, that segment has been growing almost at the rate of anywhere between three to 5% annually. And we don't see a big change in that," he said.
Shares of Pearl Global closed 1.54% lower at Rs 1,434.5 apiece on the NSE on Friday, compared to a 0.51% drop in the benchmark Nifty at 22,795.9.
