Gokaldas Exports surges 9%; hits all-time high on healthy business outlook

Shares of Gokdaldas Exports hit an all-time high of Rs 505.65, rallying 9 per cent on the BSE in Wednesday’s intra-day trade on the back of a strong business outlook.

The stock of the company, which is engaged in garments & apparels business, surpassed its previous high of Rs 488 touched on May 5, 2022. In the past one month, it has outperformed the market by surging 30 per cent, as compared to a 4 per cent decline in the S&P BSE Sensex.

For January-March quarter (Q4FY22), Gokaldas Exports had reported the best quarterly performance driven by growing order book and ability to weather supply chain disruptions.

The company’s consolidated profit after tax (PAT) more-than-doubled to Rs 61 crore in Q4FY22 as against Rs 16 crore in the corresponding quarter last year. Its consolidated earnings before interest, taxes, depreciation, and amortization (ebitda) margin improved 170 bps QoQ and 365 bps YoY to 13.1 per cent on account of positive operating leverage.

Revenue grew 58 per cent year-on-year (YoY) to Rs 588 crore, which was the highest quarterly revenue, as against Rs 373 crore in Q4FY21. Export revenue increased by 58.3 per cent YoY. Deep engagement with key customers and augmentation of capacity enabled strong revenue growth, the company said.

The primary drivers of growth were robust capacity expansion and a rapid ramp-up of production. Increased volume, better product mix, and improved operational efficiency all contributed to a growing operating profit. The year's performance reflects a growing order book and the company's ability to weather production and supply chain disruptions, it added.

For the entire financial year 2021-22 (FY22), consolidated profit after tax (PAT) jumped 342 per cent YoY at Rs 117 crore, while operational revenue grew 47.9 per cent YoY at Rs 1,790 crore. Ebitda margin expanded 270 bps to 12 per cent from 9.3 per cent in FY21.

On the outlook, the management said it stays optimistic on the order book for FY23. The company continues to see growth opportunities in FY23, despite the expected uncertainty from a combination of headwinds and tailwinds.

Some of opportunities are continuing shift of global sourcing away from China, supplier consolidation towards efficient and well capitalised players, supply side instabilities in countries like China, Vietnam and Sri Lanka, strengthening Dollar, announcement of Production Linked Incentive (PLI) and signing of free trade agreements (FTAs) with key markets.

“FTA could open UK market for us, providing an opportunity to seek new growth. A shift in consumer preferences post pandemic towards wovens, as people seek more formal clothes, may improve demand,” the management said.