Whalesbook
The Tariff Reset and Export Boost
The finalization of a trade agreement between India and the United States on February 2, 2026, marks a strategic recalibration of bilateral commerce, most notably by reducing U.S. tariffs on Indian goods from a previous high of 50% down to 18%. This substantial tariff reduction is poised to invigorate India's export sector, offering a more favorable competitive stance against global peers, particularly those in ASEAN markets facing slightly higher tariffs. The move is expected to provide margin stability for exporters and restore predictability for businesses operating across supply chains.
Raymond's US Ambitions Take Flight
Raymond, a diversified conglomerate, stands to benefit significantly from the tariff relief. Rakesh Tiwary, Group CFO, views the agreement as a "structurally positive step" that will bolster competitiveness across its lifestyle and aerospace segments. The company projects a near doubling of its U.S. revenue contribution, forecasting an increase to ₹1,000–₹1,200 crore over the next few years, up from approximately ₹500 crore currently [cite:1 (Original Source)]. Exports currently constitute about 12% of Raymond's total turnover, with the U.S. market accounting for roughly 6%; this exposure is expected to climb to 10-12% of total exports as demand escalates [cite:1 (Original Source)]. On February 3, 2026, Raymond's stock reflected this optimism, opening with an 8.48% gap up and closing with a 6.74% gain. Analysts have maintained a "Strong Buy" consensus on Raymond, with an average 12-month price target of ₹846.00, suggesting a potential upside of over 94%. Despite a historical report of poor sales growth and low ROE, the company's recent FY25 performance showed significant revenue and earnings increases. The P/E ratio was noted at 32.40x as of February 2, 2026.
Transformers & Rectifiers Accelerates US Order Pipeline
Chanchal Rajora, Director-Finance at Transformers & Rectifiers (T&R), echoed the positive sentiment, calling the tariff cut "very good news" that could expedite deal closures with U.S. clients. T&R is actively tracking over $150 million in potential inquiries from the U.S. market and plans to accelerate order conversions [cite:1 (Original Source)]. Exports comprise approximately 18% of T&R's revenue, with the U.S. and EU combined representing about 25% of these exports [cite:1 (Original Source)]. The company's product portfolio includes critical components for power generation, transmission, and distribution, areas experiencing robust demand in the U.S.
U.S. Infrastructure Demand Fuels Sector Growth
The U.S. power transformer market is a significant growth driver, valued at approximately $12.2 billion in 2024 and projected to grow at a compound annual growth rate (CAGR) of 7.7% through 2034. Key demand catalysts include the imperative replacement of aging grid infrastructure, grid modernization initiatives, and the accelerating adoption of renewable energy sources and electrification trends, such as electric vehicles and data centers. These factors create a substantial, non-discretionary demand pipeline. The U.S. power transformer market is currently characterized by long lead times, with quotations for large units ranging from 115 to 130 weeks, indicating a persistent supply gap. T&R, with its strong profit growth record (251% CAGR over five years) and improved working capital management, is well-positioned to capture this demand. Its stock opened with a significant 7.86% gap up on February 3, 2026. Analysts hold an "Outperform" consensus for T&R, with an average target price of ₹532.50, implying over 130% upside potential. T&R's P/E ratio stood at 25.13x as of February 2, 2026.
Macroeconomic Undercurrents and Outlook
India's broader export performance shows resilience, with total exports reaching $825.3 billion in FY25 and $418.5 billion in the first half of FY26, supported by strong services exports. The nation's share in global merchandise exports has increased to 1.8% in 2024. While the trade deal addresses tariff overhang, the Indian economy is also navigating external uncertainties, including slower growth in trading partners and potential volatility in capital flows. However, domestic demand remains a key growth driver, with GDP projected to grow between 6.8%–7.2% in FY27. For T&R, the demand for transformers is expected to remain robust, driven by ongoing grid upgrades and a projected rise in U.S. power transformer market value to $6.39 billion by 2031. The structural demand in the U.S. infrastructure sector, coupled with the immediate benefit of reduced tariffs, provides a compelling outlook for both Raymond and Transformers & Rectifiers.