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Gokaldas Exports Hits 4-Month High, Rallies 15% in One Week After Q3 Results

Shares of Gokaldas Exports rallied 8%, shares rose 15% in a week.

Shares of Gokaldas Exports rose 8% to a four-month high of Rs 419.90 on the BSE in intraday trade on Thursday.

Shares of the apparel maker have soared 15% in the past week after the company posted its sixth straight quarter of double-digit Ebitda margins of 12.2% in the third quarter of fiscal 2023, despite weak sales, though Various cost-saving measures.

Gokaldas Exports’ revenue was flat year-on-year and down 9% quarter-on-quarter at Rs 518.9 crore on the back of a slowdown in India’s overall textile exports amid slowing demand in key export markets. The company has reported strong sales growth in the past few consecutive quarters. The company’s profit after tax (PAT) rose 34.8% year-on-year but fell 11.4% quarter-on-quarter to Rs 40.6 crore.

The company has invested Rs 80 crore in the last nine months (April-December) in modernising machines and expanding new projects. Management said these investments are expected to grow revenue and improve operational efficiency in the coming years.

“We believe that long-term macroeconomic factors are favourable for business growth. With this in mind, our capex plan is on track. Our factories in Madhya Pradesh are expected to start commercial production in Q1FY24. We are also in Tamil Nadu. It is progressing well and laying the groundwork for a bright future,” management said.

Recent developments in macroeconomic factors suggest that essential textile commodities such as cotton and crude oil have begun to decline (down 46% and 35%, respectively, from recent highs), easing price pressures along the textile value chain. Additionally, there is evidence that supply chains are easing. Shipping rates are also likely to continue to drop.

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