Latest news with #GokaldasExports
Time of India
3 hours ago
- Business
- Time of India
JM Financial retains Buy on Gokaldas Exports; target price Rs 1,265
JM Financial maintains Buy call on Gokaldas Exports with an unchanged target price of Rs 1,265. The current market price of Gokaldas Exports is Rs 923.15. The time period given by the analyst is a year when Gokaldas Exports price can reach the defined target. Gokaldas Exports, incorporated in 2004, is a Small Cap company with a market cap of Rs 6927.83 crore) operating in the Apparels sector. Gokaldas Exports' key products/revenue segments include Textile Apparels, Export Incentives, Accessories and Job Work for the year ending 31-Mar-2024. Financials For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 1034.86 crore, up 3.41% from last quarter Total Income of Rs 1000.78 crore and up 26.52% from last year same quarter Total Income of Rs 817.97 crore. The company has reported net profit after tax of Rs 52.86 crore in the latest quarter. The company's top management includes Cyriac, Ganapathi, Poorana Seenivasan, Kumar Singh, Varughese, Bjiapurkar, Ashoke Dalvie, Rajaram. Company has MSKA & Associates as its auditors. As on 31-03-2025, the company has a total of 7 crore shares outstanding. Investment Rationale Gokaldas Exports expects near-term (2-2.5 quarters) challenges as higher costs will be borne by suppliers and retailers simultaneously. Though, this additional cost is expected to be passed on to the end-customers eventually, leading to a recovery in margins in 2HFY26. The company also witnessed some impact in order book for 2QFY26 but expects it to recover post some clarity on tariffs in July (end of 90-day pause). The company believes that in a case where tariffs sustain at 10%, additional costs will be shared amongst retailer, supplier (Indian exporters) and end-consumers. Even if tariffs are reinstated to the initial levels with India at ~26%, Indian players remain well-placed given higher tariffs to be faced by other countries like Vietnam, China, Bangladesh etc. In both these situations, additional cost is expected to be passed on to the end-consumer over time. The Company plans to take a decision on BTPL merger soon. If approved, merger is expected to be completed in next year. The longer term seems favourable with a continuing shift of global sourcing away from China given higher tariffs, supplier consolidation towards efficient and well capitalized players, and supply-side instabilities in several countries. Gokaldas exports remain JM Financial's top pick in the textile space. They reiterate BUY with an unchanged target price at Rs 1,265. Promoter/FII Holdings Promoters held 9.38 per cent stake in the company as of 31-Mar-2025, while FIIs owned 25.79 per cent, DIIs 36.82 per cent.
Mint
03-06-2025
- Business
- Mint
Trump tariffs: Here's how Indian exporters of apparel, drugs and tyres are preparing for all contingencies
New Delhi/Mumbai: Indian exporters of apparel, automotive parts, pharmaceuticals and tyres – with significant shipments to the US – are preparing contingency plans or revising their business strategies to mitigate the business risk from the imposition of tariffs. US President Donald Trump's administration has imposed a 10% universal tariff on all imports from every country, including India. Gokaldas Exports Ltd, a listed garments exporter, will focus on expanding its business in Europe because tariffs have hurt business with its main export market – the US. 'Since there is a lot of tariff uncertainty, we are pivoting to Europe. The idea is not to reduce our US business in absolute terms, but for incremental business we will focus on Europe including the UK," said Sivaramakrishnan Ganapathi, managing director of Gokaldas Exports. Margins of apparel exporters including Gokaldas have come under pressure following the tariff levy. US retailers have been unable to pass on the increased cost to consumers and are pushing for their suppliers to share the burden, Ganapathi said. Also Read | As US court declares Trump's tariffs illegal, experts urge India to reassess trade talks 'In the short term, we may also have to bear some of that cost just to keep up the relationships," he said. Gokaldas got about three-fourths of its ₹3,864 crore FY25 revenue from the US. The US is the largest export destination for Indian apparel exports. This is because competing apparel-exporting nations Bangladesh, Vietnam, Sri Lanka and Pakistan get preferential tariff rates in Europe, putting Indian exporters at a disadvantage. India's in-principle trade agreement with the UK last month and progressing talks with the European Union could now level the playing field for Indian exporters. 'Once an FTA with the UK is finalised, it will bring at least a $1 billion apparel export opportunity for India. The opportunity in the EU will be much larger. We should ready ourselves up for this incremental business," Ganapathi said. India exported readymade garments worth $16 billion ( ₹1.35 trillion) in FY25, as per data from the Apparel Export Promotion Council, an industry group. India business Indian tyre companies are chalking out similar contingency plans. The US is a key export market for Indian tyremakers, constituting about one-fifth of the country's total overseas tyre sales of $3 billion in FY24. Balkrishna Industries Ltd, which gets almost three-fourths of its revenue from exports, will focus on expanding business in India with a series of product launches. The company now targets 8% of the global tyre market by 2030 compared with its earlier goal of a 10% share. "Please note that we are under a slow-moving economy. There are wars happening, there are trade wars happening. Uncertain times are there. So that is why we are looking at it very conservatively," Rajiv Poddar, managing director at Balkrishna Industries, said on an earnings call on 24 May. 'In case anything changes and there's a catalyst, we are absolutely ready to pounce on that opportunity and go back to our original vision of 10%." Also Read | India's exports face geopolitical woes but trade deals offer relief: RBI report Ceat, which acquired Canada's Camso in December, is betting that India will be successful in signing a bilateral trade pact with the US before Sri Lanka and is planning to change its tyre distribution accordingly. Camso gets 30% of its business from the US through its two manufacturing facilities in Sri Lanka. "In case the tariffs go through, we will produce for the United States from Indian facilities if tariffs are lower here and for Europe from Sri Lanka," said Arnab Banerjee, managing director and CEO at Ceat. Apprehensive pharma Indian pharmaceutical companies are exploring partnerships and investment opportunities to manufacture in the US. While the pharmaceuticals sector has not been slapped with tariffs yet by the US, Indian exporters are apprehensive of surprise levies by Trump. 'We have a very good balance sheet; we have a very healthy financial capacity. We are always looking for opportunities," Dr. Reddy's Laboratories chief executive Erez Israeli said last month on investing in the US. 'We are not rushing, and we are not obliged for any commitment… But we certainly want to be in the United States long term. We will look for the relevant opportunity for us." Also Read | Bitter pill for Indian pharma as Trump tariffs could hurt exports by $2.25 billion The contingency plans of pigment manufacturer Sudarshan Chemicals include leveraging its ₹1,180 crore acquisition of Germany's Heubach Group. Heubach has a plant in the US as well as 19 units in Europe, allowing it the flexibility to tweak its distribution depending on the tariff scenario. "The new acquisition gives us a lot of flexibility. If there are tariffs on India, we supply from Europe into the US market," Rajesh Rathi, managing director of Sudarshan Chemicals, told Mint in March. Jessica Jani in Mumbai contributed to this story.
Mint
30-05-2025
- Business
- Mint
This textile star's rally masks a margin meltdown. Should investors be worried?
Shares of Gokaldas Exports Ltd have surged 13% over the past month, buoyed by a trio of tailwinds energizing India's textile sector. The rally follows a 90-day pause on reciprocal tariffs by the US and the conclusion of the India-UK Free Trade Agreement, both of which are expected to boost export competitiveness for the textile manufacturer. The Indian government's recent decision to restrict the entry of ready-made garments from Bangladesh to just two ports—Kolkata and Nhava Sheva—is also likely to bode well for the company as this could improve its pricing power. For Gokaldas Exports, which derives over 75% of its revenue from the US, these developments come at a crucial time. The easing of trade barriers and favourable policy signals could help the company deepen its global presence and attract more Western buyers seeking alternatives to China. Yet, underneath the optimism lie financial cracks. Despite robust revenue growth, Gokaldas Exports has been grappling with sliding margins and a rising debt burden. Moreover, its promoters hold just 9.38% of the company and nearly all of it is pledged. Profit Pulse takes a look into what's driving Gokaldas Exports's recent rally, the risks lurking beneath the surface, and whether the current momentum is sustainable. India-UK FTA opens new doors While the 90-day pause on the US's reciprocal tariffs and import restrictions on Bangladeshi garments offer near-term relief and protection, Gokaldas Exports stands to gain the most from the India-UK free trade agreement. The two countries finalised their FTA on 6 May, bringing to an end nearly three years of negotiations. According to the agreement, the 8-12% UK import duty on textiles and garments will be eliminated, making Indian exports more competitive as compared with those from countries such as Bangladesh and Vietnam. This development is expected to double the UK's contribution to Gokaldas Exports's revenue. Currently, the company earns about ₹250 crore annually from the UK—accounting for about 5% of its total revenue. Additionally, Gokaldas Exports is eyeing a $1 billion incremental export opportunity in the UK market, driven by a 12% cost advantage over Chinese suppliers. Bangladesh previously enjoyed a competitive edge through duty-free access. However, with India now securing similar benefits under the India-UK FTA, a shift in sourcing towards Indian exporters is likely. Gokaldas Exports expects the real impact of the trade agreement to be felt from the second half of 2025-26 (October 2025-March 2026), once ratification and customs implementation are complete. Also read | Trent's 1,000% rally takes a breather. Can a Sensex rejig revive its fortunes? The $1 billion revenue target Credit rating agency Icra expects India's textile export volumes to the UK to double in 5-6 years following the implementation of the revised tariffs. It also expects the India-UK FTA to drive the addition of incremental capacities across the industry. For Gokaldas Exports, Icra's outlook reinforces the case for scaling up operations to meet future demand. The company is targeting $1 billion ( ₹8,500 crore) in revenue over the next few years, up 120% from its FY25 revenue of ₹3,864 crore. To enhance its competitiveness, the company is positioning itself through new factory builds and recent acquisitions to ride the expected export surge. Gokaldas Exports has already commissioned phase I of a new sewing factory in Bhopal, Madhya Pradesh, where it plans to add 1,100 machines. The first phase of this facility is already operating at near full capacity. Phase II is expected to be completed by the end of June. In Karnataka, Gokaldas Exports is constructing another facility where it will add about 750 machines. Additionally, a new leased unit in Ranchi is expected to house 200 machines operating in two shifts, effectively functioning as a 400-machine unit dedicated to knits. With these expansions alone, Gokaldas Exports is expected to generate ₹355-365 crore in incremental income annually. The company is also expanding capacity at Atraco, one of its acquired entities, where 500 machines are being added. This expansion could contribute an additional ₹125-130 crore in revenue. All these new units are scheduled to commence operations at various points through FY26. These initiatives are part of a broader growth strategy. Gokaldas Exports's management has made it clear that capacity addition will remain a focus over the next two years and beyond. Also read | Can this under-the-radar company cash in on the $150 bn weight-loss drug boom? On the mergers and acquisitions front, Gokaldas Exports recently acquired UAE-based Atraco and Indian knitwear manufacturer Matrix Clothing Pvt. Ltd for a combined ₹930 crore to expand its product offerings. These acquisitions provide access to high-value knitwear, new customer bases, and low-cost production locations. The integration of these entities is progressing. The management has indicated that bringing both these entities up to the company's standards will be a priority. Gokaldas is also evaluating a strategic merger of BRFL Textiles Pvt. Ltd (BTPL), its recently acquired fabric unit. The company has so far invested ₹175 crore in the company via optionally convertible debentures to support BTPL's capital expenditure, performance upgrades, and working capital needs. Capacity utilization at BTPL has improved meaningfully, from near-zero orders to 40-45%, accompanied by better production quality and reduced reprocess rates. Margins under pressure Gokaldas Exports has delivered strong topline growth over the past three years, with sales nearly doubling from ₹1,790 crore in FY22 to ₹3,864 crore in FY25. However, the company has struggled with slipping operating margins and rising leverage, raising questions about the sustainability of its expansion strategy. Gokaldas Exports's operating margins have barely improved, rising from 8.4% in FY21 to 9.6% in FY25, due to cost pressures, additional costs for starting new units, and one-off expenses related to the two acquisitions. Net profit margins have fluctuated between 2% and 7%, not offering any stability. Meanwhile, peers like Page Industries Ltd and KPR Mill Ltd have consistently reported operating margins in the 18-21% range, reflecting stronger pricing power, integrated operations, and better cost controls. Gokaldas Exports's return ratios also reflect the pressure on profitability. The company's return on equity (ROE) stands at just 9.4%, significantly below its peers. Page Industries's RoE stands at 48.5% and Vedant Fashions Ltd's at 23%. Gokaldas Exports's return on capital employed (RoCE) is similarly modest, at 11.8%, lower than Page Industries's RoCE of 59.4% and Vedant Fashions's 26.6%. Adding to the concern is Gokaldas Exports's rising debt burden. The company's borrowings increased to ₹845 crore in FY25 from ₹154 crore in FY23, pushing its debt-equity ratio to 0.41x. While this is still comfortable, interest costs have tripled over the last two years, putting pressure on the company's bottom line. While Gokaldas Exports aims to improve its margins in the long term, over the next few quarters it expects its margins to decline by 200 basis points, with a recovery likely from the third quarter of FY26 (October-December 2025), depending on clarity around tariff-related policies. Also read | This luggage leader is staging a turnaround. But can it overcome its baggage? Despite current uncertainties, Gokaldas Exports expects to clock 10-15% revenue growth over the next 2-3 years. For FY26, it is targeting consolidated revenue growth of 15%, supported by a healthy order book. Volumes for the ongoing first quarter (April-June) are fully secured, although Q2 visibility is lower due to ongoing tariff uncertainties. Gokaldas Exports has also earmarked ₹150 crore in capital expenditure for FY26, with ₹166 crore in cash and cash equivalents to support this. Sharekhan has a 'buy' rating on Gokaldas Exports citing strong medium- to long-term prospects. While the brokerage acknowledges near-term headwinds, particularly from US tariff uncertainties that may dent demand and compress margins, Sharekhan remains optimistic about the company's ability to navigate these challenges. Promoter pledging clouds rally Over the last couple of quarters, Gokaldas Exports has witnessed rising institutional interest on account of its growth prospects. Domestic institutional investors (DIIs) have gradually increased their stake in Gokaldas Exports from 25.46% in June 2022 to 36.82% in March 2025, making them the largest shareholder group. Foreign institutional investors also have ramped up their stake in Gokaldas Exports aggressively, from 10.97% to 25.79% during the same period. However, a key concern is that promoter ownership in Gokaldas Exports stands at just 9.38%, with 96.3% of promoter shares pledged as collateral, an unusually high level even in capital-intensive industries. While pledging is not inherently negative, a level this high can expose shareholders to significant downside risk. If the company underperforms or the share price drops, lenders may invoke the pledge, triggering forced selling and sharp stock corrections. A bumpy road Gokaldas Exports is clearly benefiting from multiple macro trends that have bolstered investor sentiment. However, the road ahead is not without bumps. Margin pressure, rising debt, and an unusually high level of promoter pledging cast a shadow over the company's growth narrative. For investors, the stock offers high growth potential but also high risk. Keeping an eye on margin recovery, execution of new capacities, and promoter-level developments will be critical in assessing whether this momentum can turn into durable long-term performance. Ayesha Shetty is a research analyst registered with the Securities and Exchange Board of India and a certified Financial Risk Manager. Disclosure:The author does not hold shares in any of the companies discussed. The views expressed are for informational purposes only and should not be considered investment advice. Readers should conduct their own research and consult a financial professional before making investment decisions.
Fashion Network
27-05-2025
- Business
- Fashion Network
Gokaldas Exports reports 58% EBITDA increase in FY25 Q4
Gokaldas Exports reported a 58% year-on-year increase in earnings before interest, tax, depreciation, and amortisation for the fourth quarter of the 2025 financial year, driven by improved productivity and cost control measures. The company posted an EBITDA of Rs 142 crore, with consolidated profit after tax reaching Rs 53 crore, up 19% from the same quarter last fiscal year. The business' total consolidated income for the fourth quarter of the 2025 financial year stood at Rs 1,035 crore, reflecting a 27% year-on-year increase, while profit before tax rose 84% to Rs 79 crore, Apparel Resources India reported. EBITDA margins also improved by 272 basis points year-on-year during the quarter. For the full financial year, Gokaldas Exports announced that it achieved its highest-ever overall income at Rs 3,917, with a consolidated profit before tax of Rs 218 crore. This marked a 63% increase in total income and a 37% rise in profit before tax compared to the previous year. 'As we continue to grow and consolidate the business, a significant amount of work will be needed to significantly increase the margins over the coming years,' said Gokaldas Exports' vice chairman and managing director Sivaramakrishnan Ganapathi, Apparel Resources India reported. Ganapathi also noted that upcoming challenges remain, such as the US reciprocal tariff and opportunities tied to the India-UK free trade agreement.
Fibre2Fashion
23-05-2025
- Business
- Fibre2Fashion
India's Gokaldas Exports hits record $458.77 mn revenue in FY25
Indian apparel manufacturing and export company Gokaldas Exports has registered a total income of ₹3,917 crore (~$458.77 million) in fiscal 2025 (FY25) ended March 31, up 63 per cent year-over-year (YoY), the highest in its history. The consolidated profit before tax (PBT) reached ₹218 crore, up 37 per cent YoY. EBITDA rose 49 per cent YoY to ₹424 crore, while profit after tax (PAT) grew 21 per cent YoY to ₹159 crore. However, the EBITDA margin declined by 97 basis points (bps) to 10.8 per cent. Gokaldas Exports has reported its highest-ever income of ₹3,917 crore (~$458.77 million) in FY25, up 63 per cent YoY, with strong growth in PBT, PAT, and EBITDA. Q4 FY25 income rose 27 per cent YoY to ₹1,035 crore. Margin improvements were driven by productivity and cost efficiency. The company sees FY26 as challenging due to US tariffs but is optimistic about opportunities from the India-UK FTA. Meanwhile, in the fourth quarter (Q4) FY25, the consolidated total income increased 27 per cent YoY to ₹1,035 crore (~$121.23 million). The consolidated profit before tax (PBT) grew 84 per cent YoY to ₹79 crore. The EBITDA margins improved by 272 bps during the quarter, supported by productivity gains and robust cost management efforts, Gokaldas Exports said in a press release. EBITDA for Q4 increased 58 per cent YoY to ₹142 crore, and PAT rose 19 per cent YoY to ₹53 crore. The EBITDA margin improved significantly to 13.7 per cent, up from 11.0 per cent in the same quarter last year. 'The year marks an important milestone for Gokaldas Exports as it was a period of consolidation of the acquisitions. We reported a healthy growth in total income and profits for the full year as well as the quarter. There is a considerable amount of effort required to improve the margins further over the next few years as we continue to consolidate and grow the business,' said Sivaramakrishnan Ganapathi, vice chairman and managing director of Gokaldas Exports . 'As we step into FY26, the reciprocal tariff imposed by the US poses a formidable challenge by inducing business volatility and margin pressure. The recently concluded India-UK FTA, however, presents an opportunity as and when it is implemented.' Fibre2Fashion News Desk (SG)
