Raja Venkatraman's Textile Stock Picks for February 9 Following EU-India FTA
Market expert Raja Venkatraman, co-founder of NeoTrader, has recommended three textile stocks for February 9, capitalizing on the recent EU-India Free Trade Agreement (FTA). This strategic move aims to leverage the economic tailwinds expected from the pact, which promises to boost labor-intensive industries and enhance market access.
Strategic Implications of the EU-India FTA
After years of intermittent negotiations, India's push for a free-trade agreement with the European Union has culminated in a significant economic opportunity. The deal, one of India's most ambitious trade pacts, is designed to reinforce India's growth narrative amid evolving global trade dynamics. With implementation targeted for 2026, it aims to correct tariff imbalances and unlock billions in market access, particularly benefiting sectors like textiles, leather, and pharmaceuticals.
Geopolitical and Economic Messaging: The FTA underscores New Delhi's commitment to diversified partnerships in an era of trade tensions and slowing multilateralism. Commerce Minister Piyush Goyal highlighted this as part of a broader negotiating strategy with 37 countries, emphasizing bilateral frameworks to capitalize on India's demographic dividend and manufacturing revival.
Key Inclusion: The agreement incorporates the EU's Carbon Border Adjustment Mechanism (CBAM), with provisions to mitigate impacts on Indian exports like steel and cement, balancing trade liberalization with climate goals.
Tariff Wins and Market Access Boost
The core of the FTA involves sweeping tariff eliminations. Upon enforcement, duties on 90% of Indian exports to the EU, valued at $43.5 billion annually, will be removed immediately, scaling to 93% within seven years. This could yield around $35 billion in annual tariff savings, narrowing competitiveness gaps with countries like Bangladesh and Pakistan.
Textile Sector Advantage: Indian textile exports, which currently face a 12% duty disadvantage compared to Bangladesh's duty-free access, will see this gap erased. This improvement in price competitiveness is expected to drive volume growth and support employment in hubs like Tirupur and Surat.
Raja Venkatraman's Stock Recommendations
Based on technical analysis and the positive momentum from the FTA, Raja Venkatraman has identified two textile stocks with strong recovery potential. Here are his exclusive picks:
ARVIND: Buy Above ₹370
Why Recommended: Arvind Limited, a major conglomerate under the Lalbhai Group, operates diversified brands such as Arrow and U.S. Polo Assn. The stock has shown resilience with a strong closing above trendlines, indicating bullish momentum post-FTA. Momentum readings suggest a buying opportunity for long positions.
- Key Metrics: P/E Ratio: 33.41, 52-week high: ₹404, Volume: 7.87M
- Technical Analysis: Support at ₹335, resistance at ₹425
- Risk Factors: Raw material volatility, high debt, regulatory changes
- Action: Buy above ₹370, stop loss at ₹348, target price ₹410 (3 months)
TRIDENT: Buy Above ₹28
Why Recommended: Trident Limited, part of the $1 billion Trident Group, is a global leader in textiles and paper. The stock has absorbed profit booking and held support levels, with recent volatility indicating a potential upward traction. A long body candle on Wednesday highlights momentum for higher levels.
- Key Metrics: P/E: 9.86, 52-week high: ₹923.15, Volume: 904.73K
- Technical Analysis: Support at ₹22, resistance at ₹40
- Risk Factors: Cotton price volatility, forex fluctuations, intense competition
- Action: Buy above ₹28, stop loss at ₹24, target price ₹37 (3 months)
Investment Disclaimer
Raja Venkatraman is a SEBI-registered research analyst (INH000016223). Investments in securities carry market risks. Investors should consult certified experts and review all related documents before making decisions. The views expressed are personal and do not represent Mint's stance.
