This textile stock hits record high after 15 years on strong Q3 results

Gokaldas Exports hit record high of Rs 410.65, up 10% and surpassed its previous high of Rs 405 hit on March 16, 2006.

Shares of Gokdaldas Exports moved higher by 10 per cent to Rs 410.65 on the BSE, hitting a record high after a gap of over 15 years as the company reported nearly five-fold jumped in net profit at Rs 30.11 crore for the quarter ended December 2021 (Q3FY22). It had posted profit of Rs 6.05 crore in a year ago quarter (Q3FY21).

The stock of the textile company surpassed its previous high of Rs 405 hit on March 16, 2006. The trading volumes on the counter doubled with a combined 856,000 shares having changed hands on the NSE and BSE. There were pending buy orders for 102,00 shares on both the exchanges, data showed. In comparison, the S&P BSE Sensex was down 0.59 per cent at 59,117 points at 01:24 pm.

In Q3FY22, Gokaldas Exports recorded revenue growth of 95 per cent at Rs 524.06 crore over Rs 268.07 crore recorded for the same quarter last year. Earnings before interest, taxes, depreciation, and amortization (ebitda) margin improved by 3 per cent from a year ago. 

The company said it has continued its focus on service delivery excellence while augmenting its capacity and optimizing resources for better productivity. During the last nine months, the company has incurred capital expenditure of Rs 42 crore towards capacity expansion and modernization of its business infrastructure.

Analysts at ICICI Securities believe robust opportunities for Indian apparel exporters (current market share of ~5 per cent) warrant a re-rating given strong and sustainable earnings visibility. The brokerage has ‘buy’ rating on Gokaldas Exports with target price of Rs 425 per share.

“Gokaldas focuses on manufacturing complex garmenting products (mainly woven garments) with capacity of ~30 million pieces (220 manufacturing lines). It has embarked on a capex of Rs 340 crore over the next four years (FY25E), which will have the potential to generate revenue worth Rs 1,300 crore. Its production is currently operating at peak utilisation with capacity fully booked for Q3FY22E, Q4FY22E. During Q2FY22 quarter, Gokaldas Exports set up two units in Karnataka (potential revenue worth Rs 160 crore) and initiated work on a new greenfield unit that is expected to be commissioned in early FY23E,” ICICI Securities said in a report dated December 28, 2021.