1. At a Glance – Blink and You’ll Miss the Drama
₹4,193 crore market cap. Stock at ₹573, down 37% in 3 months and 42% in 1 year—basically the chart looks like it tripped on a sewing needle. Q3 FY26 numbers just landed: Revenue ₹998 crore, EBITDA ₹96 crore (9.7%), PAT ₹15 crore. Sounds okay until you realize PAT is down 71% YoY. P/E sits at 35.8x, which is ambitious for a company whose ROE is 8.16% and whose promoters own just 9.15%, with 96.3% of that pledged (yes, almost everything they own is mortgaged).
Debt stands at ₹993 crore, Debt/Equity 0.46, interest coverage 3x—not alarming, but not exactly a lullaby either. On the bright side, this is one of India’s largest apparel exporters, supplying global fashion brands, with 83% revenue from exports and operations spread across India, Kenya, and Ethiopia. On the dark side? Customer concentration (top 3 = 56% of revenue), volatile margins, and quarterly profits that behave like fashion trends—here today, gone tomorrow.
So is Gokaldas a long-term compounding apparel powerhouse going through a rough patch, or a high-capex, low-ROE tailoring shop stitched together with optimism? Let’s unbutton the numbers.
2. Introduction – From Garment King to Quarterly Mood Swings
Gokaldas Exports (GEX) isn’t a newbie playing fast fashion roulette. Founded in 1979, it has survived quota regimes, China shocks, Bangladesh competition, COVID supply chaos, and now global demand whiplash. It designs and manufactures garments for men, women, and children, exporting to 50+ countries, employing 54,000+ people—75% women, which is admirable and operationally significant.
Over the last few years, GEX went on an acquisition-and-expansion binge—Atraco, Matrix, and strategic investments like BRFL Textiles. Revenue scaled up nicely, but profitability didn’t keep pace. FY25 sales hit ₹3,864 crore, TTM ₹3,934 crore
, yet PAT TTM is ₹117 crore, down 22% YoY. That’s not leverage; that’s margin leakage.
The market once loved the “China+1 apparel outsourcing” story. Then came inflation, weak Western demand, inventory destocking, and suddenly Gokaldas’ earnings started walking the ramp in slow motion. Q3 FY26 confirms the pain: revenue stable, margins okay, but profits crushed by depreciation, interest, and tax.
Question for you: Should an export-led apparel company with scale still be trading at 36x earnings when profits are shrinking?
3. Business Model – WTF Do They Even Do?
Think of Gokaldas as the backend engine of global fashion. You don’t see its brand on the shirt tag, but your Zara/H&M-style jacket probably passed through one of its factories.
What they do well:
- End-to-end manufacturing: design → cutting → printing → embroidery → washing → logistics
- 30+ factories around Bengaluru
- Capacity of 87 million pieces annually
- 30,000+ machines, 3D design studios, testing labs, quilting, embroidery—the works
Geography & clients:
- 83% exports, mainly US & Europe
- Long-standing client relationships:
- ~50% revenue from 10+ year clients
- ~38% from 5+ year clients
- But top 3 customers = 56% of revenue. That’s loyalty… and dependency.
Acquisitions = scale, not margin magic
- Standalone revenue: ₹1,233 crore, EBITDA
