Shares of Gokdaldas Exports rose 10% to 410.65 rupees on BSE, hitting a record high after a gap of more than 15 years as the company reported net profit up nearly fivefold to 30.11 crores of rupees for the quarter ended December 2021. (Q3FY22). It had recorded a profit of Rs 6.05 crore in the quarter a year ago (Q3FY21).
The textile company’s share surpassed its previous high of Rs 405 hit on March 16, 2006. Over-the-counter trading volumes doubled with a total of 856,000 shares changing hands on the NSE and BSE. There were pending buy orders for 102.00 shares on both exchanges, according to the data. By comparison, the S&P BSE Sensex was down 0.59% at 59,117 points at 1:24 p.m.
In Q3FY22, Gokaldas Exports recorded revenue growth of 95% to Rs 524.06 crore from Rs 268.07 crore recorded for the same quarter last year. The earnings before interest, taxes, depreciation and amortization (EBITDA) margin improved by 3% compared to a year ago.
The company said it continues to focus on excellence in service delivery while increasing capacity and optimizing resources for better productivity. Over the past nine months, the company has incurred capital expenditure of Rs 42 crore for capacity expansion and modernization of its business infrastructure.
Analysts at ICICI Securities believe strong opportunities for Indian apparel exporters (current market share of around 5%) warrant a reassessment given the strong and enduring earnings visibility. The brokerage has a buy rating on Gokaldas exports with a target price of Rs 425 per share.
“Gokaldas focuses on manufacturing complex apparel products (mainly woven garments) with a capacity of around 30 million pieces (220 manufacturing lines). It has embarked on a capex of Rs 340 crore over the next four years (FY25E), which will have the potential to generate revenue worth Rs 1,300 crore. Its production is currently operating at maximum utilization with capacity fully reserved for Q3FY22E, Q4FY22E. In Q2FY22 quarter, Gokaldas Exports set up two units in Karnataka (potential revenue worth Rs 160 crore) and started work on a new greenfield unit which is expected to be commissioned in early FY23E,” said ICICI Securities in a report dated December 28, 2021.