Latest news with #GokaldasExportsLtd
The Star
2 days ago
- Business
- The Star
Exporters weigh options to deal with new US levy
MUMBAI: Indian exporters who built their businesses on Americans' demand for affordable goods are redrawing their strategies and weighing alternatives to reduce the pain from US President Donald Trump's shock 50% levy on imports. Trump's decision to double tariffs in the space of a week will make India-made apparels to generic drugs prohibitively expensive and can heavily disrupt exports, if not bring them to a grinding halt for many smaller businesses. 'This is worse than Covid for us,' said Lalit Thukral, founder of apparel exporter Twenty Second Miles, who fears the industry will have to sell his goods at a loss and comparing the tariff-led disruption to the coronavirus pandemic. 'At least, there seemed to be an end to it. This tariff situation is just getting worse.' While escalating tariffs pose an existential threat to small enterprises like Twenty Second Miles, the larger ones are considering coping tactics including relocating production lines to countries with a lower tariff barrier, tapping buyers in other geographies and exploring acquisitions in the United States. Gokaldas Exports Ltd, one of India's largest apparel exporters that earns about 70% of its revenue from the United States, plans to ramp up production in its factories in Kenya and Ethiopia which face just a 10% US levy. 'Africa is looking like a good source at the moment,' Gokaldas' managing director Sivaramakrishnan Ganapathi said in an interview. 'We are seeing a huge amount of inquiries for production from that region from American customers.' The mitigating strategies will be a gut punch for Prime Minister Narendra Modi's flagship 'Make in India' initiative and puncture any prospects to position India as an alternative manufacturing hotspot to China. Economists forecast that Trump tariffs could clip India's gross domestic product (GDP) by as much as 1%. Trump has peppered his tariff onslaught with jibes about how the South Asian nation's trade barriers were 'obnoxious' and its economy 'dead' – remarks that have drawn counter from India's central bank. But businesses are hoping for more than just retorts. Businesses thought 'there would be more predictability,' according to Rohit Kumar, founding partner at public policy consultancy The Quantum Hub. 'In the short term, this threatens our China+1 strategy that India was positioning itself to benefit from. In the longer term, even this rerouting may not work for longer as policies could change,' Kumar said, referring to companies trying to recast supply chains. 'The additional 25% oil penalty tariff would take the hit to US-bound exports to 60%, dragging GDP by 0.9%. 'This drop would be concentrated on the key items impacted by these tariffs such as gems and jewellery, textiles, footwear, carpets and agricultural goods – all labour-intensive industries,' said Chetna Kumar and Adam Farrar of Bloomberg Economics. The revised US levy announced as a penalty for India's purchases of Russian oil are set to take effect within 21 days, providing time for hectic parlays between New Delhi and Washington DC. In the meantime, companies are working on hedging strategies. Tata Group's Titan Ltd, which sells jewellery, is considering shifting some manufacturing to the Middle East which has lower duties on shipments into the United States, Reuters reported last week. Kalyan Jewellers India Ltd may consider expanding its manufacturing operations in Dubai to navigate US tariffs, executive director Ramesh Kalyanaraman said in an interview with Bloomberg TV. While Indian drugmakers are awaiting clarity on sectoral tariffs imposed by the United States, many of them have already begun scenario planning given Trump's dire threats. 'We'll be putting a initially small tariff on pharmaceuticals, but in one year – one and a half years, maximum – it's going to go to 150% and then it's going to go to 250% because we want pharmaceuticals made in our country,' Trump had said in an interview on CNBC. Alembic Pharmaceuticals Ltd, which earns about 30% of its revenue from the United States, sees acquisitions there as a way of boosting manufacturing in the region, its joint managing director Pranav Amin told Bloomberg News. Aurobindo Pharma Ltd, which counts on the United States for nearly 50% of its sales, announced the acquisition of Indiana-based Lannett Co on July 30 in a deal that will help expand its US manufacturing footprint. About US$3bil worth of auto components exports will be affected, according to data from the Automotive Component Manufacturers Association. A 50% tariff also makes India the worse off among its peers such as Vietnam, Indonesia and China. Firms elsewhere are also actively trying to lure non-American customers to diversify their customer base and market presence. Welspun Living Ltd, which sells home fabrics in the United States, told analysts last week that it is looking at the United Kingdom, European Union, Middle East, Australia, New Zealand and Japan to reduce reliance on the American market. SNQS International, based in the textile hub of Tiruppur in southern India, gets about 20% of its business from the United States, but is now looking to double down on European nations, according to its founder V Elangovan. Larger textile manufacturers are also grabbing smaller, low-value orders to keep their factories running and avoid shutdowns, Thukral of Twenty Second Miles said. This risks crowding out the smaller firms. — Bloomberg
Business Upturn
7 days ago
- Business
- Business Upturn
Why are Gokaldas Exports shares falling 15% despite good Q1 results? Explained
By Aditya Bhagchandani Published on August 6, 2025, 09:48 IST Shares of Gokaldas Exports Ltd declined 5.82% to ₹705.10 in early trading on Wednesday, extending Tuesday's sharp fall. The stock had already plunged 8.74% in the previous session following concerns over potential US tariffs on Indian goods, triggered by remarks from US President Donald Trump. Despite delivering strong financial results for the quarter ended June 2025, investor sentiment remained muted. The company reported a 52.6% year-on-year jump in consolidated net profit to ₹41.5 crore, with revenue rising 2.6% YoY to ₹966.8 crore. Operating metrics were robust, with EBITDA increasing 30% to ₹97.3 crore and margins expanding to 10.2% from 8.1% in Q1 FY25. The continued stock decline appears to be driven by macro concerns, particularly fears of trade friction with the US, rather than company-specific fundamentals. With today's fall, the stock has slipped to the lower end of its 52-week range (₹700.10 – ₹1,262.15), dragging the market capitalization down to ₹51,570 crore. Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information. Ahmedabad Plane Crash Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
Business Standard
31-07-2025
- Business
- Business Standard
Pearl Global Industries Ltd leads losers in 'A' group
Apar Industries Ltd, Strides Pharma Science Ltd, Gokaldas Exports Ltd and Aarti Industries Ltd are among the other losers in the BSE's 'A' group today, 31 July 2025. Apar Industries Ltd, Strides Pharma Science Ltd, Gokaldas Exports Ltd and Aarti Industries Ltd are among the other losers in the BSE's 'A' group today, 31 July 2025. Pearl Global Industries Ltd tumbled 8.97% to Rs 1489.95 at 14:46 stock was the biggest loser in the BSE's 'A' the BSE, 12705 shares were traded on the counter so far as against the average daily volumes of 3538 shares in the past one month. Apar Industries Ltd lost 6.60% to Rs 9023.25. The stock was the second biggest loser in 'A' the BSE, 12549 shares were traded on the counter so far as against the average daily volumes of 6750 shares in the past one month. Strides Pharma Science Ltd crashed 6.20% to Rs 887.1. The stock was the third biggest loser in 'A' the BSE, 72824 shares were traded on the counter so far as against the average daily volumes of 25366 shares in the past one month. Gokaldas Exports Ltd corrected 5.77% to Rs 838.15. The stock was the fourth biggest loser in 'A' the BSE, 51189 shares were traded on the counter so far as against the average daily volumes of 20574 shares in the past one month. Aarti Industries Ltd fell 5.72% to Rs 420.25. The stock was the fifth biggest loser in 'A' the BSE, 2.61 lakh shares were traded on the counter so far as against the average daily volumes of 76626 shares in the past one month.
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.
