Sharekhan's research report on Gokaldas Exports
Gokaldas Exports Limited’s (GKEL’s) Q1 performance was affected by lower margins due to higher freight costs and labour costs. Revenue grew ~13% on like-for-like (LFL) basis, while adjusted EBITDA margin stood at 10.5%. U.S. retail sales grew 3% in H1CY2024. Global retailers have optimised inventory holdings. GKEL’s capacity utilisation was ~78% in Q1; with strong order booking, GKEL expects 100% utilisation in H2. Several one-off factors impacted EBITDA margin in Q1. Management expects margins to be high in H2. Benefits of integration of the recent acquisitions, better pricing power, and stable freight rates might help EBITDA margin to inch up to 12% in FY2026.
Outlook
The stock has corrected by 16% from its highs and trades at 38x/23x its FY2025E/FY2026E earnings, respectively. We maintain our Buy rating with a revised PT of Rs. 1,140.
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