Gokaldas Exports stock rallies 5%; hits record high on healthy outlook

The stock has rallied nearly 40% in one month as the company expects better volume in its two acquired entities in the coming quarters, with a sustained stable performance going forward

Shares of Gokaldas Exports hit a record high of Rs 1,161, gaining 5 per cent on the BSE in Thursday’s intra-day trade in an otherwise subdued market on a healthy outlook. The stock of the garments and apparels maker has surpassed its previous high of Rs 1123.75 that it hit on August 7, 2024. 

 

In one month, it has rallied nearly 40 per cent after the management on November 12, said that the company expects volumes to pick up in both the acquired entities in the upcoming quarters, with a sustained, stable performance of the company going forward.

 

Gokaldas Exports is one of India’s largest manufacturers and exporters of apparel, exporting to more than 50 countries. Following the acquisition of Atraco and Matrix, Gokaldas Exports currently has more than 30 production units that can produce about 87 million garments annually.

 

 

The company had reported healthy growth in total income both in the quarter and half year ending September 2024, indicating a sustained growth momentum. The majority of the growth during the September quarter (Q2FY25) was contributed by Gokaldas Exports excluding Atraco and Matrix, as it is a seasonally lean period for both the acquired entities, the company said. 

 

On the consolidated profitability front, muted volumes in the acquired entities, coupled with air freight costs in Gokaldas Exports and employee cost build up in anticipation of future volume growth impacted the profitability in the quarter, the management said.

 

Meanwhile, India’s market share in apparel exports to the US and the UK has risen steadily to 7 per cent / 6 per cent in 2024 from 6 per cent / 5 per cent in calendar year 2023 (CY23). China has been losing market share across the world (the UK market share was down from 27 per cent in CY20 to 19 per cent in CYTD24), with rising labour costs amidst the China+1 theme playing out. 

 

The internal turmoil in Bangladesh and high factor costs in Vietnam might play well for Indian exporters. The huge addressable market size / top-notch execution / UK FTA bode well for key players in India’s home textile / apparel sector, according to analysts at JM Financial Institutional Securities.

 

The global inventory destocking cycle has now come to an end with Indian players expecting relatively better demand in H2 compared to H1 as retailers get ready for the holiday season. Indian home textile and apparel exporters like Gokaldas Exports / Indo Count expect a positive shift in demand given renewed appetite for buying from retailers, leaving headroom for increased exports from India in H2FY25, the brokerage firm said in a textile sector report.