Seven Midcap Stocks Set to Surge as US Slashes Tariffs from 50% to 18%

When the US imposed tariffs of up to 50% on select Indian exports, the impact was immediate for mid-cap companies with high exposure to the market. Order flows slowed, pricing had to be renegotiated, and margins came under pressure as companies worked out how much of the cost could be absorbed and how much could be passed on.

What followed over the next few quarters was not a withdrawal from the US market but rather a period of adjustment. Exporters focused on retaining customers, rebalancing geographic exposure, and protecting volumes, even if it meant accepting a temporary hit to profitability. Business continuity remained intact, even as earnings softened.

With tariffs now reduced to around 18%, that adjustment phase is beginning to unwind. Discounting is being rolled back, margins are starting to recover, and management commentary is shifting toward normalisation. This piece examines mid-cap exporters, where the tariff shock is largely behind them, and earnings recovery is likely to follow as trade conditions stabilise.

Sona BLW's Hard Pivot: Swapping US Revenue for Local Dominance

This pattern is visible across sectors, beginning with auto components exporter Sona BLW Precision. In 9MFY26, battery electric vehicles accounted for 33% of total automotive product revenue, underscoring the company's position in future mobility. The tariff shock, however, triggered a sharp geographical reset.

Rather than defend exposure at any cost, Sona BLW executed a hard pivot in its geographic mix over the past nine months. North America's revenue share declined from 41% in FY25 to 18% in 9M of FY26, while India's business share rose to 49% from 25% during the said period. Management continues to expect North America to regain share as trade conditions normalise.

The Margin Protector: How Garware Survived a 50% Tariff Regime

A similar story of resilience emerges at Garware Hi-Tech Films. Despite the US accounting for around 40% of revenue, the company saw sales decline by only about 3% in Q3FY26, even under a 50% tariff regime. Garware chose not to aggressively chase volumes. Instead, it passed on a limited share of the tariff to distributors, tightened operational efficiency, and shifted its mix toward higher-value products. This approach compressed margins in the near term but helped preserve customer relationships and pricing discipline.

Management expects margins to recover during the seasonally stronger Q4FY26/Q1FY27 periods. With tariffs now materially lower, profitability is expected to lift meaningfully. Importantly, the company continues to guide for 15-20% growth irrespective of tariff outcomes, signalling confidence in underlying demand rather than reliance on trade relief.

Pearl Global's Transition from Discounts to Growth

In apparel exports, Pearl Global Industries presents a distinct yet equally instructive case. Four years ago, the company was heavily dependent on the US market. That concentration has since eased, with the US now contributing close to 50% of revenue and India accounting for 22-24% of consolidated sales.

During the tariff phase, Pearl chose to extend discounts to US customers to protect volumes. This decision helped retain business, but temporarily weighed on margins, particularly in India operations during 9MFY26. Management now expects discounting to stop from February onward, allowing profitability to normalise. India operations are projected to return to a growth trajectory from FY27, with the group targeting a 12-14% revenue CAGR.

Gokaldas Path to 12% Margins as Discounts Roll Back

At Gokaldas Exports, the tariff impact was more direct owing to its greater exposure. As of November 2025, the US accounted for approximately 70% of total revenue. To retain market share, Gokaldas shared up to 15% of the tariff burden with customers, while global brands absorbed the remainder. This strategy preserved volume share but compressed margins.

With textile tariffs now reduced to 18%, these discounts are expected to be withdrawn, supporting a recovery in profitability. The company is guiding for margins above 12%. It aims to grow revenue to Rs 4,500 crore (from Rs 3,864 crore in FY25) at a capacity utilisation of 90-95%. It aims to reduce its US business to 60% over the next three-five years by expanding its presence in the UK and Europe.

Indo Count Relative Competitiveness

Home textile exporter Indo Count Industries followed a similarly calibrated approach. The US remains its largest market, contributing nearly 70% of total revenue. The company navigated a period of high volatility under a 50% tariff regime but avoided large-scale order cancellations. Volumes grew by 7%, even as margins came under pressure.

Indo Count selectively shared costs with customers and focused on operational efficiency to mitigate the impact of these costs. With tariffs now down to 18%, the need for discounting is expected to decline, thereby directly improving profitability. More importantly, Indian exporters are now relatively better placed, with tariff rates lower than Bangladesh and Vietnam (around 20%), Pakistan and Indonesia (19%), and significantly below China's 30-35%.

Alongside this tailwind, Indo Count continues to diversify. Non-US markets now contribute 30% of revenue. The company has outlined a roadmap to double revenue by 2028, driven by new verticals and capacity expansion. Its greenfield facility in North Carolina is expected to be fully operational by January 2026, strengthening its local presence.

Carysil's Diversification Beyond the US Market

Beyond textiles, Carysil illustrates how diversification cushioned tariff pressures. In 9MFY26, the US contribution declined to 34% from 40% a year earlier, resulting in a more balanced revenue mix as the UK and Rest of World gained share.

Carysil has reinforced its US strategy through a wholly owned subsidiary, Carysil USA Inc., to manage local distribution. A long-term supply agreement with Karran USA for 150,000 quartz sinks annually provides baseline visibility into volume. This supports growth even as geographic exposure becomes more uniform.

How Avanti Feeds Shielded Export Margins

Finally, Avanti Feeds presents a distinct case. The US continues to dominate the processed shrimp export market, accounting for 72% of North America's revenue in H1FY26. Unlike apparel exporters, Avanti passed on tariff costs to end consumers, working with customers to reprice contracts and protect margins.

At the same time, the company has accelerated diversification into Europe and Asia to reduce dependence on a single market. Despite tariff-related noise, Avanti maintains a strong growth outlook. Shrimp exports for FY26 are estimated at around 17,000 MT, up from 14,149 MT in FY25. It is also expected to benefit from India's Export Promotion Mission, with an outlay of Rs 25,000 crore, which aims to support exporters navigating reciprocal tariffs and expand into new markets.

Across these companies, the tariff phase was handled quietly and sensibly. Volumes were protected, customers were retained, and businesses stayed focused on execution, even as margins came under pressure. With tariffs now lower, that strain is easing. Discounting is expected to roll back, supporting profitability. With share prices already higher following the tariff reduction, some of the optimism appears to be priced in.

Disclaimer: The views expressed in this article are solely those of the author and do not necessarily reflect the opinion of NDTV Profit or its affiliates. Readers are advised to conduct their own research or consult a qualified professional before making any investment or business decisions. NDTV Profit does not guarantee the accuracy, completeness, or reliability of the information presented in this article.

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