Gokaldas Exports - Weaving Each Piece Together: ICICI Securites Initiates Coverage

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ICICI Securities Report

Gokaldas Exports Ltd., under its new management (since FY18), has witnessed significant changes including marquee client additions, richer product mix, higher margins, etc., leading to robust shareholder returns.

We believe, India – with its stable economy, abundant cotton availability, cheaper labour versus China and control over Covid – is well placed to wrest a chunk of apparel market share from China and other competitive economies.

Hence, India’s textile and apparel industry stands to benefit in the medium term.

Further, the government of India’s signing of free trade agreements with various countries (UK FTA likely in H1 CY23) and incentive schemes is likely to boost the domestic textile ecosystem and catalyse further growth.

Gokaldas Exports, in the next leg of its growth, is executing a capex of ~Rs 3.7 billion over FY22-FY25, which includes new greenfield projects and upgrading its existing machineries.

This will help diversify its revenue sources (foray into knitwear), and potentially boost the topline by ~Rs 8 billion-9 billion over FY23-25E.

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