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  • 02 May 2022
  • ICICIdirect Research

GOKALDAS EXPORTS REPORTS ROBUST RESULTS

GOKEX - 878 Change: -20.55 (-2.29 %)

News: On a significantly high base of Q3FY22, revenue grew 12% QoQ (up 58% YoY) to Rs 585 crore in Q4FY22. The growth is expected to be driven by a mix of price hikes and contribution from its recently commissioned plants in Karnataka. Recent increase in fabric prices resulted in gross margins to decline by 380 bps QoQ (up 214 bps YoY) to 46.0%. On account of 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.

Views: Gokaldas Exports (GEL) continued to impress with another robust performance in Q4FY22, despite challenging times. Company recorded its highest quarterly revenue and EBITDA in Q4FY22. GEL 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 ~Rs 1300 crore (4.0x A/To). Further, the management indicated it is looking at entering new business segments like technical 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.

Impact: Positive