June 22, 2024
Financial Results

Gokaldas Exports Reports Strong Q4, Announces Acquisitions

Gokaldas Exports Ltd, a leading garment manufacturer, has announced its financial results for Q4 FY24, showcasing significant growth and strategic expansions aimed at bolstering its market position.

For the quarter ending March 31, 2024, Gokaldas Exports reported consolidated revenue of ₹ 818.0 crore, marking a 54% increase from ₹ 530.1 crore in Q4 FY23. The company recorded a profit after tax (PAT) of ₹ 44.3 crore, slightly down from ₹ 47.2 crore in the same period last year, and an EBITDA of ₹ 90.0 crore, up 17% from ₹ 77.2 crore in Q4 FY23. Despite these gains, the EBITDA margin decreased to 11.0% from 14.6% in the previous year, reflecting the impact of recent acquisitions and increased costs.

On a like-for-like basis, excluding the financials of the recently acquired companies Atraco and Matrix, the company’s performance remained robust, with revenue at ₹603.7 crore, a 13.9% year-over-year increase, and EBITDA at ₹82.6 crore, up 7.1% from the previous year. The EBITDA margin on this basis was 13.7%, showing resilience despite external pressures.

Gokaldas Exports has made strategic acquisitions of Atraco and Matrix, integrating these entities to enhance its market presence and diversify its operations. This strategic move aims to achieve geographic diversification, expanding the company’s footprint and access to new markets, and broadening its customer base by integrating existing customers and gaining new ones. The acquisitions also create operational synergies, leveraging duty arbitrage and strategic positioning to improve productivity and margins.

The acquisitions were funded through a combination of debt and equity, resulting in a net debt of ₹336 crore as of March 31, 2024. However, following a successful Qualified Institutional Placement (QIP) that raised ₹600 crore in April 2024, the company has turned net cash positive, significantly strengthening its financial position.

Commenting on the results,  Siva Ganapathi, Vice Chairman and Managing Director of Gokaldas Exports, emphasized the company’s strong operational performance, stating, “Our performance on a like-for-like basis, excluding the recently acquired entities, reflects a strong operational performance. We overcame pricing pressure, one-time acquisition costs, increased statutory minimum wages, and the startup costs at our new unit to deliver a strong EBITDA. The acquisitions and capacity additions align with our aim to integrate, diversify, and grow while focusing on improving margins.”

Ganapathi expressed confidence in the strategic benefits of the acquisitions, highlighting the complementary strengths of Atraco and Matrix in enhancing Gokaldas Exports’ competitive edge.

Looking ahead, Gokaldas Exports is poised for continued growth driven by capacity optimization, leveraging existing and new facilities to achieve higher production efficiency, and focusing on high-margin products to improve profitability. Additionally, the company is investing in sustainable production methods to meet the rising demand for eco-friendly garments.

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