Performance by Business Vertical and Key Segment Developments
Gokaldas Exports Ltd (NSE: GOKEX) reported a total income of ₹998 crores for Q3FY26, representing a flat year-on-year (YoY) performance. However, business verticals showed divergent trends:
• India Operations: Continued to demonstrate resilience, maintaining growth momentum with an 8% YoY increase in Q3 and 13% growth for the nine-month period (9MFY26).
• Africa Operations: This segment faced headwinds due to the expiry of the African Growth and Opportunity Act (AGOA) and supply chain disruptions, leading to a dip in revenue during the quarter.
Core Growth Strategies and Strategic Expansion
To navigate a challenging global environment, the company is executing several core strategies:
• Mitigating Tariffs: To offset a steep 50% US tariff on Indian exports, the company shared the cost burden with customers and offered discounts on shipments.
• Market Diversification: Gokaldas is actively increasing its presence in Europe by onboarding new customers and expanding volumes with existing ones.
• Vertical Integration: A key strategic expansion includes investment in BTPL, a fabric processing unit. This allows for better customer service, faster deliveries, and improved margins through vertical integration.
• Efficiency Drives: The company is streamlining operations across India and Africa to extract further efficiencies and reduce unit costs.
Operational Scale, Market Leadership, and Growth Trajectory
With over four decades of experience, Gokaldas Exports remains one of India’s most respected apparel manufacturers. Its scale is significant, with:
• Annual production capacity of 87 million pieces.
• A workforce of over 54,000 employees, 75% of whom are women.
• Manufacturing operations spanning India, Kenya, and Ethiopia, serving brands in over 50 countries.
Robust Capital Strength and Financial Highlights
The company maintains a strong balance sheet to support its expansion:
• Net Debt: Stood at ₹395 crores as of December 31, 2025, an increase driven primarily by capital expenditure and the BTPL investment.
• Equity: Total equity reached ₹2,180 crores.
• Capital Expenditure: In 9MFY26, the company incurred ₹175 crores in capex for machinery upgrades and new capacity, with a total of ₹205 crores planned for FY26.
Year-Over-Year and Full-Year Growth Context
While Q3 income was flat, the 9MFY26 total income of ₹2,978 crores represents a 3% YoY growth. This growth was achieved despite the US tariff pressure and AGOA uncertainty, significantly outperforming the broader Indian apparel industry’s 2.4% export growth in the same period.
Future Outlook and Broader Industry Trends
The long-term growth trajectory for Gokaldas Exports is bolstered by shifting global dynamics:
• India-EU FTA: This anticipated agreement is expected to be a major catalyst, offering Indian exporters a 12% duty advantage over China and parity with duty-free competitors like Bangladesh and Vietnam.
• Global Sourcing Shifts: As labor costs rise in China and Vietnam, India is emerging as a preferred “China +1” sourcing hub.
Regulatory Milestones and Management Commentary
Management noted that Q3FY26 was the first full quarter impacted by the 50% US tariff. Despite this, EBITDA margins were sustained at 10.0% for 9MFY26 due to productivity gains and cost management. The company anticipates that while US reciprocal tariffs may continue to impact margins in the near term, any positive outcome from a US-India trade deal would be a significant offset.