Avendus has initiated coverage on two prominent home textile stocks with divergent recommendations, as both companies navigate challenging US market conditions and ongoing trade negotiations.

Contrasting Stock Recommendations

The brokerage's analysis reveals starkly different outlooks for the two textile majors:

Indo Count Industries received a 'buy' rating with a target price of ₹348 per share, representing significant upside potential from its previous close. In contrast, Welspun Living was assigned a 'reduce' rating with a price target of ₹135 per share, indicating limited growth prospects.

Market Challenges and Trade Dynamics

Avendus highlighted several macro developments as key factors to monitor, particularly tariff normalization and progress on free trade agreements. Both Indian textile companies face substantial exposure to the US market, where the current administration has imposed 50% tariffs on imports. Trade deal negotiations are currently underway, which could significantly impact future business prospects.

The brokerage noted that falling US imports reflect both demand moderation and inventory rationalization. However, Avendus suggested that the current demand moderation could be cyclical rather than structural, potentially offering hope for future recovery.

Industry Repositioning Strategies

Indian textile players are actively repositioning themselves within the value chain through various strategic initiatives:

• Diversification of product portfolios
• Enhanced branding efforts
• Expansion into new markets and segments

These strategic moves aim to reduce dependency on traditional markets and create more resilient business models amid ongoing trade uncertainties.

Analyst Consensus and Market Performance

The broader analyst community shows mixed sentiment on both stocks:

Market reaction was immediate, with Indo Count Industries shares trading 5.1% higher at ₹273.55, while Welspun Living declined 0.6% to ₹130.76 around 10:35 am on Tuesday. The contrasting price movements reflect investor response to Avendus' differentiated recommendations and the underlying business fundamentals of each company.

Avendus Securities has initiated coverage on Indo Count Industries with a Buy recommendation, setting a price target of ₹348 per share. This marks the brokerage's entry into covering the textile company, signaling institutional confidence in the stock's potential.

Brokerage Recommendation Details

The following table summarizes Avendus Securities' coverage initiation:

Company Profile

Indo Count Industries operates in the textiles sector and is classified as a mid-cap stock. The company has established its presence in the textile manufacturing space, attracting attention from institutional analysts and investors.

Market Implications

The initiation of coverage by Avendus Securities represents a significant development for Indo Count Industries, as it brings additional institutional focus to the stock. Buy ratings from established brokerages often indicate thorough fundamental analysis and positive long-term prospects for the covered company.

The ₹348 price target established by Avendus provides investors with a specific valuation benchmark and suggests the brokerage sees upside potential in the stock based on their analysis of the company's fundamentals and market position.