Gokaldas Exports slips into the red

Gokaldas Exports, one of the country’s largest apparel exporters, hit by betting the wrong way of hedging foreign exchange, has reported its first-ever quarterly net loss of Rs 15 crore for the third quarter of the current financial year, against a net profit of Rs 17 crore for the corresponding previous quarter. The forex hedging loss has been to the tune of Rs 19 crore and pre-shipment dollar loan restatement has resulted in a notional loss of Rs 4 crore, taking the total loss on these accounts to Rs 23 crore.

The Bangalore-based company, controlled by global private equity giant Blackstone, has reported its top line grew by 3.5 per cent to Rs 273 crore as global retailers slashed and deferred their purchases.

Gokaldas, which exports to global apparel brands such as Nike and Adidas, said even as sales limped up, it was not able to trim its expenditure and it registered an increase of around 6 per cent. The EBIDTA for Q3 moved up by 8 per cent to Rs 28 crore.

In a statement, Gokaldas Exports has noted that in addition to the foreign exchange loss, the numbers have been depressed because of reduction of duty drawback by the government to the tune of 3 per cent and the withdrawal of the 4 per cent interest subsidy by the government with effect from October 1, 2008.

The company said the order position is around Rs 250 crore, based on strong marketing initiatives despite a drop in demand from the US and European markets.