ICICI Securities research report on Gokaldas Exports
Gokaldas Exports (GEXP) has signed a definitive agreement with the shareholders of UAE-based apparel maker, ATRACO, to acquire 100% of the latter’s equity for a total consideration of up to USD 55mn funded through debt (73%) and internal accruals (27%). ATRACO exports 95% of its production to the US (primary market for GEXP) and has nearly mutually exclusive customer base with GEXP.
Outlook
Hence, we believe this deal provides GEXP an opportunity to leverage ATRACO’s existing relationships for cross-selling opportunities. Given the duty-free access to US from Kenyan operations coupled with huge cross-selling opportunities, we now value GEXP at 18x FY25E EPS (earlier: 17x) and value the ATRACO business at 20x FY25E EPS to arrive at a revised target price of INR 855/sh (earlier: INR 595). Maintain BUY.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
