Gokaldas Exports Stock Zooms 9% On Strong Q4; "Long Term Bet In The Apparel Exports Space"- Says ICICI Direct

Shares of Gokaldas Exports in trade on May 2, 2022 zoomed 9% to day's high price of Rs. 435 per share. The stock is trading very close to its 52-week high price of Rs. 438.8 per share. The stock's all time low and all time high price are Rs. 24 and Rs. 438.8 per share, respectively.

The sharp stock price gains are on the back of healthy Q4 numbers. The company despite the high base of Q3FY22, posted revenue growth of 12% QoQ (up 58% YoY) to Rs. 585 crore in Q4FY22. The growth is indeed driven by a mix of price hikes as well as contribution from the company's recently commissioned facilities in Karnataka. Notably the price hike in fabric led the company's gross margin for the quarter under review to fall by 380 bps QoQ and up 214 bps YoY to 46%. Further, due to positive operating leverage,company reported 13.1% EBITDA margins (up 170 bps QoQ and 356 bps YoY). Absolute EBITDA grew by 29% QoQ (up 2x YoY) to Rs. 76.6 crore.

"Gokaldas Exports continued to impress with another robust performancein Q4FY22, despite challenging times. Company recorded its highest quarterly revenue and EBITDA in Q4FY22. The company has initiated work on a new greenfield unit in Madhya Pradesh that is expected to be commissioned in early FY23E (potential revenue: Rs. 150 crore). It has charted out capex of Rs. 340 crore over the next four
years, which will have potential to generate incremental revenues worth about Rs. 1300 crore (4.0x A/To). Further, the management indicated it is looking at entering new business segments liketechnical textiles, knitwear and setting up manufacturing units in cost efficient countries like Bangladesh. We like Gokaldas Exports as a structural long term story to play the apparel export space", views as expressed by ICICI Direct Research