India-UK FTA Unlocks Growth Potential for

PGIL

Textile stocks have swung sharply over the past year, reacting to US tariff proposals, penalty duties, and shifting competitive dynamics with Bangladesh. Amid this volatility,

has delivered resilient performance. In Q3FY26, PGIL reported 14.4% YoY revenue growth, aided by Vietnam and Indonesia, despite tariff headwinds. Margins dipped modestly, but the company’s diversified global base and higher-value product mix continue to support earnings visibility. Operational Highlights - Volumes: Shipments up 4.3% YoY to 56.1 million pieces (9MFY26). - Revenue growth: Outpaced volumes, reflecting shift to higher-value products. - Realisation: Expected to rise to ₹675–700/piece in FY26 vs. ₹576 in FY25. - Margins: Operating margin down 70 bps YoY due to ₹9 crore tariff costs and ramp-up expenses. Geographic Mix - Bangladesh: Steady, leveraging LDC duty advantages in EU, UK, Australia, China. Installed capacity: 54.8 million pieces, with 5–6 million more by Q2FY27. - Vietnam: Strong contributor, near optimal utilisation, serving North American and specialty brands. - Indonesia: Ramp-up underway; profitability to improve with scale. - India: Revenue run-rate ~₹1,100 crore, potential to scale to ₹1,500–1,600 crore. Bihar facility in early ramp-up. Tariff & Trade Developments - US reciprocal tariffs initially pushed duties near 50%, later reduced to ~18%. - Recent US Supreme Court ruling curbs emergency tariff powers, improving visibility. - India-UK FTA removes 10–12% duty disadvantage, enabling India to compete with Bangladesh and Vietnam. PGIL expects 3x rise in UK sales by FY27. Outlook & Valuation - Guidance: 12–15% revenue growth, double-digit margins in FY27. - Drivers: Lower tariff costs, volume rebound, traction in Japan, Australia, UK, Europe. - Valuation: ~24x FY27 earnings, reasonable given diversified footprint and resilience. - PGIL remains better positioned than peers to navigate tariff headwinds, though near-term volatility persists.