- Tariff relief from the India‑US interim deal is already lifting niche exporters more than 15% each.
- Five small‑cap names – Ratnamani Metals, Avanti Feeds, Sterlite Technologies, Sharda Cropchem, Sky Gold & Diamonds – have outperformed the broader market by up to 19%.
- US exposure is the common denominator; companies with 40%‑70% of revenue from America are the biggest beneficiaries.
- Volume spikes show institutional interest; some stocks are trading 80‑90× their two‑week averages.
- Both bull and bear cases hinge on how quickly the tariff cuts translate into order pipelines and margin expansion.
You missed the fine print on the India‑US trade pact, and those who acted now are reaping outsized gains.
How the India‑US Trade Deal Reshapes Export‑Driven Small Caps
The interim agreement announced on February 2 reduced U.S. tariffs on select Indian goods from 50% to 18%. A lower tariff means lower landed cost for Indian exporters, making their products more price‑competitive against local and third‑party suppliers. For capital‑market participants, this translates into two immediate drivers: higher order inflow potential and margin expansion as input costs shrink.
Historically, major trade‑policy shifts have produced a lagged but decisive rally in export‑oriented stocks. In 2010, the U.S.–India Information Technology (IT) Services Agreement spurred a 45% rally in mid‑cap IT firms within six months. The current deal is narrower in scope but broader in sector coverage – from metals to agro‑chemicals – offering a fresh catalyst for a different set of names.
Why Ratnamani Metals’ 19% Surge Beats Market Weakness
Ratnamani Metals posted a 19% jump on Thursday, trading 1.12 lakh shares versus a two‑week average of just 1,276. The company exports stainless‑steel and carbon‑steel pipes to more than 35 countries, with the U.S. contributing roughly 7% of FY25 export revenue (₹124 cr out of ₹1,729 cr). A tariff cut to 18% improves price competitiveness for those pipe products, especially in the U.S. construction and energy sectors where cost‑sensitivity is high.
Technical glance: the stock broke above its 20‑day moving average with volume at 85× the norm, a classic bullish signal indicating institutional accumulation. Fundamentally, the reduction in duties should lift gross margins by 30‑50 basis points, assuming a stable exchange rate.
Competitor context: Tata Steel’s export‑oriented segment saw a modest 4% rally after the deal, suggesting Ratnamani’s smaller scale allows it to capture tariff benefits faster.
Avanti Feeds Extends Rally, Climbs 18% – The Shrimp Play
Avanti Feeds added 18% to its price today, taking its cumulative gain since February 2 to 76%. The firm derives 70‑75% of export revenue from the U.S., which absorbs about 48% of India’s shrimp exports. Lower duties directly lift realized prices per kilogram, bolstering top‑line growth.
In Q3 FY26, Avanti posted a 16% YoY net profit jump to ₹163.47 cr, underscoring the profitability upside once tariff relief hits the books. The stock’s price‑to‑earnings (P/E) multiple has expanded from 12× to 18×, reflecting a rerating as investors price in higher cash‑flow visibility.
Historical parallel: After the 2015 U.S. tariff reduction on frozen seafood, the top three Indian shrimp exporters collectively outperformed the Nifty Seafood Index by 22% over the next eight months. Avanti appears to be riding the same wave.
Sterlite Technologies Zooms 8% – Fibre Optics Meets Trade Policy
Sterlite Technologies rose 8% to ₹154.80, delivering a 22% total return since the trade announcement. The firm supplies optical‑fibre cable, a critical component for data‑center expansions in North America. Even with a prior tariff hike, the company’s North‑American revenue share grew from 25% to 36% in the current fiscal year, driven by demand for high‑fibre‑count cables.
A softer tariff regime could accelerate this trend, expanding the order backlog and improving EBITDA margins. The stock now trades at an EV/EBITDA of 6.5×, a discount to the sector median of 8.2×, hinting at upside potential if the pipeline materialises.
Peer comparison: Adani Total Gas, while not a direct competitor, saw its infrastructure segment gain 3% on the same day, indicating that the broader “high‑tech export” narrative is resonating across multiple themes.
Sharda Cropchem Jumps 9% – Agro‑Chemicals Ride the Tariff Wave
Sharda Cropchem gained 9% as investors priced in better pricing power and market access for its agro‑chemical formulations. Over 65% of India’s agro‑chemical exports head to Latin America, North America, and Europe, with the U.S. market largely exempt from the latest duty hikes (80‑85% of shipments already tariff‑free).
A Crisil report highlighted that US‑bound shipments are expected to grow 4‑5% YoY, providing a tailwind for firms like Sharda. The stock’s price‑to‑book ratio has narrowed from 2.4× to 1.9× since February, reflecting a valuation reset in line with improved export outlook.
Sector trend: The Indian agro‑chemical sector’s overall export growth has averaged 6% annually over the past five years. With the trade deal, the pace could accelerate to double‑digit levels, benefitting the entire value chain.
Sky Gold & Diamonds Glitters – 9.8% Jump on US Jewellery Demand
Sky Gold & Diamonds rose 9.8%, marking a 21.25% climb over eight sessions. The U.S. accounts for nearly 30% of India’s gems and jewellery exports, and Sky aims to lift its US‑derived revenue to 30% by FY27 (up from 11% in Q1 FY25). Lower tariffs improve price competitiveness for luxury goods, a sector where brand perception and cost structure are tightly linked.
From a valuation perspective, the company trades at a forward P/E of 15×, below the industry average of 18×, suggesting room for multiple expansion if US sales materialise as projected.
Competitor lens: Titan’s jewellery arm, with a more diversified geographic footprint, only posted a 2% gain, underscoring the premium placed on pure‑play US exposure.
Investor Playbook: Bull vs. Bear Cases
Bull Case: The tariff cut to 18% materially improves export margins across all five firms. Volume spikes confirm institutional conviction. If order pipelines translate into 5‑10% revenue uplift YoY, earnings multiples could re‑price, delivering 30‑50% upside for each stock within the next 12‑18 months.
Bear Case: The interim deal may be superseded by a more restrictive final agreement, or global shipping constraints could blunt export growth. A resurgence in the Indian rupee could offset tariff benefits, compressing margins. In that scenario, stocks could retrace 15‑20% from current levels.
Strategic take‑away: Position a modest allocation (5‑10% of a diversified portfolio) in a basket of these exporters, monitoring trade‑policy developments and quarterly export data for early warning signals.