Categories Other Industries, Research Summary

Gokaldas Exports: A Tremendous Rise

“The company in the 2022 calendar year delivered revenue of US$107 million and a PAT of about US$7.2 million. It had about a little over US$1 million of one-time cost that got baked into its calendar 2022 P&L on account of the start up of a new unit that they set up. This will not be there going forward so to that extent their PAT has been under-stated so the company has got reasonably good potential for growth as well with the new capacity that they recently put up. There is an opportunity to ramp that up going forward in calendar 2024 and the years ahead so we see a fairly good opportunity with Gokaldas and Atraco coming together. The customer base that we have is largely mutually exclusive.”

– Mr. Sivaramakrishnan G, Managing Director, Gokaldas Exports on Q1FY24 ConCall
Stock Data
Price Performance
Last 5 Days+0.68%
Last 12 Months+124.22%

*As of 14.09.2023

Company Description:

Gokaldas Exports Ltd is an Indian company primarily engaged in the business of textile and apparel manufacturing and exports.

Textile and Apparel Manufacturing: Gokaldas Exports is involved in the manufacturing of textile and apparel products. They may produce a wide range of clothing items, including but not limited to shirts, trousers, dresses, outerwear, and sportswear.

Export-Oriented: Historically, the company has been known for its strong focus on exports. They manufacture clothing items for global brands and retailers and export these products to international markets. Their client base may include well-known fashion brands.

Supply Chain and Manufacturing: Gokaldas Exports manages various stages of the supply chain, including sourcing raw materials, textile processing, garment production, quality control, and logistics for shipping finished products. They typically operate multiple manufacturing facilities.

OEM (Original Equipment Manufacturer): Gokaldas Exports may work as an OEM, which means they produce clothing and textile products for other companies under those companies’ brand names. This can involve designing, producing, and labeling products according to the specifications of their clients.

Market Expansion: Depending on their business strategy, they might continuously explore new markets and clients, expand their product lines, or diversify their operations.

Financial Results:

Gokaldas Exports Ltd reported Revenues for Q1FY24 of ₹515.00 Crores down from ₹611.00 Crore year on year, a fall of 15.71%.

Total Expenses for Q1FY24 of ₹479.00 Crores down from ₹561.00 Crores year on year, a fall of 14.62%.

Consolidated Net Profit of ₹33.00 Crores down 15.38% from  ₹39.00 Crores in the same quarter of the previous year.

The Earnings per Share is ₹5.37, down 17.51% from ₹6.51 in the same quarter of the previous year.

Key Strengths:

  • Experience and Expertise: Gokaldas Exports had decades of experience in the textile and apparel manufacturing industry. Their long-standing presence in the market allowed them to develop expertise in various aspects of the business, from sourcing raw materials to garment production.
  • Strong Export Focus: The company was known for its strong export orientation. They had a well-established presence in international markets and a robust network of global clients, which helped them maintain a steady revenue stream through exports.
  • Diverse Product Portfolio: Gokaldas Exports offers a wide range of clothing and textile products, catering to different segments of the market. This diversity in their product portfolio allowed them to adapt to changing market demands and trends.
  • Vertical Integration: Gokaldas Exports had control over various stages of the supply chain, including textile processing and garment manufacturing. This vertical integration allowed them to have better control over quality, production timelines, and cost efficiencies.
  • Strong Client Relationships: Over the years, Gokaldas Exports had built strong and enduring relationships with global fashion brands and retailers. This client loyalty was a testament to their reliability and quality of service.
  • Skilled Workforce: The company had a skilled and experienced workforce, which was essential for maintaining product quality and efficiency in manufacturing.

Key Weaknesses:

  • Supply Chain and Operations Impact: The company’s supply chain and operations were impacted, and their principal markets of US and EU shutdown. This affected their order pipeline and retail brands deferred orders as retail stores closed.
  • Fabric Sourcing: One of the most challenging tasks for the Indian apparel exporter is cost-effective and timely sourcing of yarns and fabrics that meet quality benchmarks. The biggest challenge in fabric sourcing is scattered manufacturing facilities. There is no one place from where a company can get all sorts of fabric.
  • Rise in Cotton Prices: The company is susceptible to any unprecedented rise in cotton prices.
  • Fluctuating Currencies: The company is susceptible to any fluctuations in currencies.
  • High Domestic Inflation: High domestic inflation resulted in spiraling wage costs as well as operating expenses. This can affect the bottom line of the company.

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