Gokaldas Exports deeper in the red

Gokaldas Exports, a Bangalore-based publicly held garments exporter controlled by global private equity major Blackstone, has continued to bleed and in fact has more than doubled its net loss to Rs 37 crore during the third quarter of FY12 as compared to net loss of Rs 16.7 crore during the corresponding quarter of previous fiscal.

Sales dropped by 30 per cent to Rs 208 crore. For the quarter, the company has clocked an EBIDTA of Rs 4.4 crore showing a margin of 2 per cent which compa-res favorably against 1.7 per cent reported in Q2 FY12 and loss of 1 per cent for Q3 FY11.

The better numbers in the EBIDTA level is due to sustained efforts on cost and margin management. “There has been reduction in operating costs despite the inflationary trends. In addition, finance costs have also been reduced in the quarter under review through better working capital management notwithstanding rising interest rates.

On the other hand, overall volumes have been under pressure this quarter due to weaker demand scenario particularly from the European markets. However, with our efforts of business development in the earlier part of this year, we have been able to acquire new customers and have started received orders from them. These are likely to build over the coming quarters,” the company said.

On the currency front, this quarter again saw a sharp movement in the foreign currency rates particularly in USD-INR where the INR depreciated by 9 per cent in the quarter under review and a sharp 19 per cent since April 2011 to Dec 2011. This has resulted in mark-to-market losses in our books on account of restatement of forex denominated working capital loans.

“With a stable pricing regime for cotton and the US market providing some optimism for the sector, we continue our efforts towards working closely with our customers, existing as well as new, to increase our share of business from them and also expand the categories being serviced for them,” the company added.