Gokaldas Exports falls 7% after Q1 net profit declines 16.5%

The company reported a 21.8% YoY rise in its earnings before interest, taxes, depreciation, and amortisation (EBITDA) to ₹82.6 crore. However, the EBITDA margins for the quarter contracted to 8.8% from 13% in the corresponding period last year.

The company stated that it faced several headwinds during the quarter which impacted EBITDA. Gokaldas Exports had faced disruption in production from April to May which resulted in delayed shipments consequently leading to extra costs in overtime and airfreight.

Further, headwinds were accentuated with ramping up of employees in anticipation of volume growth in the second half of the year and the company’s newer units ramping up at a slower pace. However, the company reported that it expects to offset some of these impacts in the forthcoming quarters.

Sivaramakrishnan Ganapathi, vice chairman and managing director of Gokaldas Exports, the company’s profitability was impacted due to several headwinds however, it was able to sustain revenue growth during the quarter. The company is making progress towards integrating the operation of its newly acquired entities which will result in better operating leverage.

“Our strategic investment in BTPL, a fabrics processing unit, allows us to derive utmost benefit through vertical integration into critical raw materials, adding an edge in terms of speed, quality, and cost,” he said.

Gokaldas Exports had raised ₹600 crore through Qualified Institutional Placement (QIP) in April 2024. Following the acquisition of two companies and the fund raise, the company reported a net cash balance of ₹58 crore.

Shares of the company have risen by nearly 16% since the beginning of the year. The stock has gained over 86% in the past year.