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Gokaldas Exports tanks 15% in 2 days; what's making the Street nervous?

Gokaldas Exports share price today Shares of Gokaldas Exports hit a 52-week low of ₹696.40, falling 7 per cent on the BSE in Wednesday's intra-day trade as June 2025 quarter (Q1FY26) revenues witnessed tepid growth due to impact of US Tariff and lower than expected growth across acquired entities. The recently announced revised reciprocal tariff by the US on India is expected to pose a challenge in the second half of this financial year, the management said. In past two trading days, the stock price of garments & apparels company has slipped 15 per cent. It is trading at its lowest level since April 2024. The stock has corrected 45 per cent from its 52-week high level of ₹1,260 touched on December 18, 2024. At 09:55 AM; Gokalads Exports was trading 5 per cent lower at ₹710.15, as compared to 0.03 per cent decline in the BSE Sensex. Q1 results – Gokaldas Exports Gokaldas Exports consolidated revenues witnessed 3 per cent year-on-year (Y-o-Y) growth to ₹956 crore. Ex-acquired entities, revenues witnessed 19 per cent Y-o-Y growth indicating slower order flow from US as Atraco primarily served the US markets while Matrix serves the European markets. Profit after tax (PAT) grew 53 per cent Y-o-Y, down 22 per cent quarter-on-quarter (Q-o-Q) at ₹41 crore. Favourable input cost situation translated to better gross margins which witnessed 556bps Y-o-Y improvement to 53.7 per cent. Earnings before interest, taxes, depreciation, and amortization (EBITDA) grew by 8.3 per cent Y-o-Y to ₹96.6 crore while margins improved by 54bps to 10.1 per cent in Q1FY26. The management said the company reported a moderate growth in its total income, as it was period impacted by tariff. The company reported a healthy growth in PAT and an improvement in EBITDA margins on a Y-o-Y basis, supported by productivity gains and robust cost management efforts. Demand outlook On-demand front apparel imports in the first five months of the calendar year across the US, EU, and UK increased by 7 per cent, 12 per cent & 10 per cent respectively as brands have rationalized their inventory-to sales ratio levels. The recently announced revised reciprocal tariff by the US on India is expected to pose a challenge in the second half of this financial year, as most of the company's order bookings for the next quarter are already closed. 'That said, any positive outcome on the US India trade deal might abate this impact. Amidst these challenges, our Africa business might be at an advantageous position with 10% US reciprocal tariffs on both Kenya and Ethiopia, and we are working towards an active engagement with our clients on the same,' the management said in Q1 investor presentation. Meanwhile, in the longer term, sourcing diversification is a key theme for all customers, and India remains one of the top contenders among its Asian peers. The recently announced India-UK FTA offers a 12 per cent duty advantage over China and puts India on par with Bangladesh, creating a strong export potential. The trade deal with the EU could open significant opportunities for Indian apparel exporters, the company said. Looking ahead Gokaldas Exports remains cautious with capex spending in the near term. The ongoing capacity expansions in Madhya Pradesh, Karnataka and Jharkhand will materialize in Q3FY26. As expected Gokaldas Exports performance has affected by tariff led uncertainties in US. Standalone level performance was much better. Despite flat revenues it managed to achieve good profitability. ICICI Securities said they shall review our estimates post the management commentary on US market and opportunities ahead in UK market.