Textile firm Arvind warns US tariffs could hit margins in fiscal year 2026

Indian textile manufacturer Arvind warned on Thursday that margins in the current fiscal year may come under pressure as it might partly absorb the impact of U.S. tariff policy. Its shares fell nearly 5% after the comments, despite a 52% year-on-year increase in its fourth-quarter profit after tax to 1.51 billion rupees ($17.64 million).Arvind, which refrained from providing a forecast for the fiscal year that began in April due to "prevailing uncertainty", said it will pause all non-critical and discretionary capital expenditure until there is clarity on tariffs. The firm will take measures to reduce costs and increase volumes to mitigate the margin pressure and plans to issue a forecast "at a later stage" in the fiscal year. Top U.S. retailers have been haggling with suppliers over how the costs that tariffs are set to impose might be distributed, Reuters has reported. India still remains in a comparatively favourable position due to the heftier tariffs that could hit bigger U.S. garment suppliers such as Bangladesh, Vietnam and China, from July. "As an immediate fallout, we are witnessing higher demand for garments and fabrics, with positive signals from key U.S. customers indicating increased business," Arvind said. Exports made up nearly 40% of the company's annual revenue in fiscal year 2024, according to its annual report. Part of the volume benefit could come after the UK-India free trade agreement, Arvind said. UK currently makes up less than 2% of the company's business. "The latest UK free trade pact... opens up a new key geography for the company," it said.