Shares of Gokdaldas Exports hit a record high of Rs 485, on rallying 12 per cent on the BSE in Thursday’s intra-day trade. The stock of the company has zoomed 38 per cent in the past four trading days after it reported the best quarterly performance driven by growing order book and ability to weather supply chain disruptions.
The garments & apparel maker’s consolidated profit after tax (PAT) more-than-doubled to Rs 61 crore in March quarter (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 as against Rs 373 crore in Q4FY21.
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.
Analysts at ICICI Securities maintain BUY recommendation on Gokaldas Exports with a target price of Rs 570 per share. The brokerage likes the company as a structural long term story to play the apparel export space.
With the recent fundraise (QIP: Rs 300 crore), the company has strengthened its balance sheet with a repayment of around Rs 300 crore debt, post which Gokaldas Exports has become net debt free (net cash surplus: Rs 105 crore).
The company’s production is currently operating at peak utilisation levels with a robust order book for the next six months.
It has charted out capex of Rs 350 plus crore over the next four years (by FY25E), which will have a potential to generate incremental revenues worth around Rs 1,300 crore, the brokerage said in a result update.
Enhanced government focus on apparel exports and China plus one strategy of global brands provide long term growth opportunity for players like Gokdaldas Exports, it said.
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