KPR Mill, Gokaldas Exports - Strong, Sustainable Earnings Visibility Drives Re-Rating: ICICI Direct
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ICICI Direct Report
Textile stocks, in the past one year, have witnessed a significant re-rating with readymade garment exporters stocks like KPR Mill Ltd. and Gokaldas Exports Ltd. rallying six times since our initiation reports.
A material improvement in financial performance (return on capital employed for KPR Mill improved 440 basis points to ~24% in FY21), deleveraging of balance sheet (debt-to-equity for Gokaldas Exports declined from 0.9 times to 0.5 times) and robust order book for the companies have been key triggers for the re-rating.
We continue to like KPR Mill and Gokaldas Exprots to play the structural long term story in the apparel export space owing to their strong business models and long standing relationships with marquee global clients.
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