Gokaldas Exports Ltd. share price target

i) US market contributes ~65% of revenues. Demand from the US market is showing strong traction with opening up of the economy. Gokaldas is getting good order flow and expects H2FY21 to be strong in revenue terms, ii) on the pandemic related issues, the management indicated it is engaging with the clients and has sought formal extension of delivery deadlines and does not foresee immediate risk of cancellation of orders, iii) margins may be negatively impacted in Q1FY21 as the management may need to operate extra shifts and pay overtime to workers post lifting of lockdown, iv) the...

i) Capacity utilisation has risen gradually from 15% in April to 80% in September, ii) global demand outlook for apparels from major brands has been encouraging due to increased demand from end consumers. Demand has seen an increasing trend on a MoM basis, iii) the management indicated that shifting of supply chain from China to other countries has gradually started. Global brands both in US and Europe are looking at de-risking their sourcing destinations, iv) Indian players have started to receive orders from new clients and over the longer term would benefit from the China +1...

Due to withdrawal of MEIS (4% of turnover), realisations across textile companies will be under pressure for 1 to 2 quarters after which the management expects it to gradually improve. As on December-19, the company has a robust order book to be executed by Q1FY21E. Currently, the company is already operating at full utilisation levels and now plans to debottleneck and modernize current capacities as well as add manufacturing lines through brownfield expansion resulting in ~13% rise (Cost: Rs 200m). Total capex for Greenfield expansion at Andhra Pradesh and Madhya Pradesh is Rs 650m (25%: to be funded by TUF loan) and is...

Post results, we adjust our estimates for IND-AS 116 and revise our gross margin assumptions downwards by 150bps in FY20E and 50bps in FY21E due to change in product mix. We expect revenues to grow at CAGR of 18.1% to Rs 16.4bn and adj PAT at 49.1% to Rs 708m over FY19-21E. At CMP, the stock is trading at 9.5FY20E and 4.9x FY21E EPS estimates of Rs 8.6 and Rs 16.5 respectively. We...

Gokaldas Exports (GEXP) is a leading apparel exporter since 1979 with marquee clientele across USA, Canada, Europe, Japan, Russia, Middle East, South Africa and South America. It has 16 facilities with a capacity to manufacture 30m garments pa. Originally promoted by the Hindujas, it was later sold to Blackstone in 2008. During the Blackstone era, the management focus got diluted, operational efficiencies...

Gokaldas Exports (GEXP) is a leading apparel exporter since 1979 with marquee clientele across USA, Canada, Europe, Japan, Russia, Middle East, South Africa and South America. It has 16 facilities with a capacity to manufacture 30m garments pa. Originally promoted by the Hindujas, it was later sold to Blackstone in 2008. During the Blackstone era, the management focus got diluted, operational efficiencies...