GOKALDAS EXPORTS

Vendor to global clothing brands

Bengaluru-based manufacturer and exporter of apparel and clothing, Gokaldas Exports is engaged in the business of design, manufacture and sale of garments for men, women and children, and caters to various international fashion brands and retailers. The company, originally founded by Jhamandas Hinduja in 1979 to focus on silk trading, subsequently shifted to manufacturing apparel and by 2000 emerged as a prominent player in the global apparel export market, particularly to the US and Europe. In 2007, Blackstone, a leading private equity firm, acquired a controlling stake in the company. Though faced with serious challenges like the abolition of quotas under the Multi Fibre Agreement and increased competition from Bangladesh, Gokaldas emerged a global leader and a onestop destination for leading apparel brands. Using the best technology and turning out products that are not just fashion-forward but also of superior quality, the company has made its mark throughout the globe.

No wonder, the company has made rapid strides in its financial performance. During the last 12 years, its sales turnover has expanded more than three times from Rs 1,180 crore in fiscal 2014 to Rs 3,864 crore in fiscal 2025, with operating profit shooting up almost eight times from Rs 48 crore to Rs 371 crore and the profit at net level skyrocketing to Rs 159 crore in striking contrast to a loss of Rs 7 crore. The company’s financial position is extremely strong, with reserves at the end of March 2025 standing at Rs 2045 crore – almost 56 times its equity capital of Rs 36 crore. In fact, its prospects going ahead are even more promising. Consider:

The company has continued to do well in the current fiscal 2026. As guided by the management, volumes during Q1FY2026 have already been secured, with revenues rising by 11 per cent to $ 55.5 million, reflecting the strength of the company’s products portfolio and its diversified revenue base.

Gross profit rose 19 per cent to $ 14.7 million, gross margin improving 170 bps to 26.5 per cent. By August of Q2FY2026, the order book has been filling up at a slightly lower rate amid US tariff uncertainties. The management eyes a 15 per cent consolidated revenue growth for FY2026, despite short-term challenges on account of tariff uncertainties. According to the management, margins will start recovering from Q3.

BUYING SPREE

• Gokaldas is on an expansion spree through the inorganic route. It acquired Atraco Industrial Enterprises, a leading apparel manufacturer founded in 1986 in Dubai, UAE. Atraco manufactures a wide range of high-quality clothing, bringing a strong track record of success and a diverse workforce. This acquisition will enable Gokaldas to offer an even wider range of products and services to the company’s global customers. What is more, Atraco will have duty-free US access.
• Going a step ahead, Gokaldas acquired Matrix Designs, a leading apparel manufacturer established in 1980, renowned for its quality and reliability. Matrix, which specialises in a wide range of stylish apparel for all seasons, caters to major fashion brands and retailers across Europe, the UK, North America and beyond. This acquisition will strengthen the company’s combined offerings with Matrix Design’s expertise in embellished knitwear and a strong presence in key markets like the EU.

U.K. MARKET

• The management is highly optimistic about an extremely bullish impact of the Indo-UK free trade agreement on the company’s growing export business with the UK. The impact will be felt from the second half of the current fiscal, once ratification and customs implementations are completed. Gokaldas CEO Sivaramakrishnan Ganapathi insists that the India-UK FTA opens up a major growth opportunity for India’s apparel exports. Inevitably, the share price of Gokaldas tumbled from the recent high of Rs 1,260 to Rs 736, following the Trump’s tariff bomb. But the downtrend has been stopped for now. Observers maintain that after the short-term despair, sentiment will improve and the stock price will cross the four-figure mark in due course.

PERFORMANCE INDICATORS (Rs. in crore)

NELCAST LTD

A-Z of iron castings for global clients

South-based (registered office at Guntur and corporate office at Chennai) Nelcast Ltd is a castings and forgings sector company engaged in the manufacture of ductiles and grey iron castings. The company produces castings for various industries, including the global automotive sector, construction, mining, railways and general engineering. Known for its one-stop shop approach, Nelcast offers castings in different grades and sizes, and meets international quality standards. The company not only enjoys a strong position in the domestic market but is also rapidly growing across North America, Europe and Southeast Asia. It has a list of distinguished buyers numbering over 40, who include original equipment manufacturers (OEMs) and tier-I customers in the commercial vehicle, tractor, off-highway equipment, railways and passenger vehicle segments.

Nelcast is doing fine on the financial front. During the last 12 years, its sales turnover has expanded two and a half times from Rs 515 crore in fiscal 2014 to Rs 1,252 crore in fiscal 2025, with the profit at net level surging almost two times from Rs 22 crore to Rs 42 crore. What is more, prospects for the company going ahead are all the more encouraging. Consider:

STEADY VOLUMES

• Going ahead, the medium and heavy commercial vehicle sector is expected to remain strong, driven by a gradual recovery in economic activities, a thrust in infrastructure spending, favourable freight rates and improved utilisation of fleet capacities. The tractor sector is expected to show moderate growth in the current fiscal year on the back of a normal monsoon. The company has been meeting its volumes guidance of 85,000 tonnes in fiscal 2023, 1,00,000 tonnes in fiscal 2024 and 1,10,000 tonnes in fiscal 2025, and is confident of achieving the target of 1,25,000 tonnes in fiscal 2026.
• On technical grounds, the outlook for Nelcast is bullish. In terms of moving averages, the company’s stock is trading above its 5-day, 20-day, 50-day, 100-day and 200- day averages, indicating a strong upward trend in its price performance. The daily, weekly and monthly strength indicator, RSI, indicates rising strength. The daily Bollinger band ‘buy’ signal indicates increased momentum.
• The share price has moved up to Rs 175, indicating a three-year investor return of around 150 per cent. The stock price is expected to cross the Rs 200-mark within the next 5 to 6 months.
• The domestic CV industry volume is still short of its FY19 peak, but with the current recovery in CV demand boosted by infrastructure investment, scrapping of old vehicles and efforts to reduce total cost of ownership, the company is expected to see strong volume growth in the domestic market. An improvement in rural sentiment with increased agricultural income on the back of good agri output and higher prices for produce are to drive the demand for tractors going forward. This is expected to boost domestic volumes for the company. A strong order backlog, addition of new customers, and new products will drive export volume for the company. Expect new product launches to be fully ramped up going ahead. The company has crossed one-lakh tonne mark during the last two years with 30% of the total volumes coming from exports. The company is confident of double digit growth in the topline for FY2026 on the back of higher volumes and higher realization. On the profitability front, the benefits of operating leverage, an increased share of renewable power in the total power requirement of the company, and other cost efficiency measures are set to boost margins. The company expects EBITDA per tonne to be at Rs 16/kg for FY26. In FY 2026, we expect the company to register EPS of Rs 9, which is likely to rise to Rs 9.60 in FY 2027. The scrip trades at Rs 158.

PERFORMANCE INDICATORS (Rs. in crore)