Gokaldas Exports surges 9% on robust near-term prospects, strong order book

Shares of Gokaldas Exports surged 9 per cent to Rs 978.20 on the BSE in Tuesday’s intra-day trade in an otherwise subdued market after the garments and apparels company said its order book remains strong, which secures robust near-term prospects for it. Gokaldas expects business volume to pick up in both the acquired entities in upcoming quarters with sustained stable performance of the company going forward.

 

In the past three trading days, between February 13 and February 17, the stock has fallen nearly 9 per cent from Rs 982.90. At 09:30 am today, Gokaldas Exports was trading 4 per cent higher at Rs 935.75 on the BSE. In comparison, the BSE Sensex was down 0.18 per cent and the BSE Smallcap index slipped 1.5 per cent. The stock had hit a record high of Rs 1,260 on December 18, 2024.

 

 

Gokaldas Exports, in its Q3FY25 earnings conference call, said that US retail apparel sales remained consistent, showing a 3 per cent growth in calendar year 2024. Apparel imports to the US and EU have picked up momentum since the second half of CY '24 on the strength of lower inventory with retailers. Fall/winter order placements have been good, the production for which happens in Q1 and Q2. Early indications for spring/summer are also strong, the company said.

 

The management said they see business volumes picking up with sustained stable performance of the company going forward. With this in mind, the company is planning to expand its production capacity with ongoing investments in three facilities. The first one is a new facility in Madhya Pradesh.

 

This will increase the capacity by about 1,100 machines and is under construction. The second one is an additional unit in Karnataka, which will add about 750 machines, which is also under construction. The third incremental unit is expected on a leased premise in Ranchi, Jharkhand. All these units are expected to commence operations at different points in FY '26, the management said.

 

The company is working on improving margins by better pricing and stronger operations management. The longer-term outlook is favorable, supported by the continued shift in global sourcing away from China, Vietnam and Bangladesh, a trend towards supplier consolidation amongst efficient, well capitalised players and ongoing supply side instabilities in various countries, the management said.

 

Meanwhile, India's exports to the US rose by 39 per cent year-on-year to $8.44 billion in January, while imports grew by 33.46 per cent to $3.57 billion, PTI reported citing data from the commerce ministry. The increasing trade assumes significance as the two countries are aiming at $500 billion two-way commerce by 2030 and a trade agreement, the news agency reported.

 

The long -term prospects for the industry remain intact, with a continuing shift of global sourcing away from China, supplier consolidation towards efficient / well-capitalised players and supply-side instabilities in several countries. Further, government incentives and support from state governments for low cost locations, PLI and FTAs with key markets should drive increased textiles trade, said analysts at JM Financial Institutional Securities.  The brokerage firm re-iterated its ‘Buy’ rating on Gokaldas Exports, with a 12-month target price of Rs 1,285 per share.