🟢 At a Glance
Gokaldas Exports (NSE: GOKEX) is a leading apparel manufacturer, stitching garments for 50+ global brands with a workforce of 54,000+. In FY25, it reported ₹3,864 Cr revenue (+62% YoY), ₹159 Cr PAT (+42%), but trades at a lofty 42× P/E—valuation couture that may not suit every portfolio.
About Gokaldas Exports
- Founded: 1979
- Headquarters: Bengaluru
- Factories: 14 across Tamil Nadu, Karnataka, Jharkhand
- Workforce: 75% women, total 54,000+ employees
- Business Model: Design → Manufacturing → Export (asset-light on accessories)
- Clients: Premium European and US fashion brands
GEX boasts end-to-end capabilities, from pattern-making to bulk production, and leans on contract stitching for non-core inputs. Sustainability efforts include solar rooftops and water-recycling, though fashionably green can be costly.
Key Financials (FY25)
| Metric | FY25 | YoY Change |
|---|---|---|
| Revenue | ₹3,864 Cr | +62% |
| EBITDA Margin | ~11% | +150 bps |
| Net Profit | ₹159 Cr | +42% |
| EPS | ₹22.18 | +7.4 % |
| Net Debt / (Cash) | ₹(–) X Cr | – |
| P/E | 41.98× | – |
| ROCE / ROE | 12% / 9.4% | +200 bps / +150 bps |
Couture Commentary: Revenue growth is runway-ready, but margins need to stay in vogue to justify the hefty 42× multiple.
Who’s at the Hem 🧵 (KMP Details)
| Name | Designation | Tenure |
|---|---|---|
| S. Ganapathi | MD & Vice Chairman | Since 2017 |
| A. Sathyamurthy | Chief Financial Officer | Since 2015 |
| Gourish Hegde | Company Secretary & Compliance | 2.3 yrs |
Their combined fashion-forward vision has driven expansion, though boardroom bickering could unravel the threads.
Key Financials vs. Peers
| Co. | P/E | ROCE | Revenue Growth (3-yr CAGR) |
|---|---|---|---|
| Gokaldas Exports | 41.98 | 12% | 29% |
| Page Industries | 69.77 | 59% | 35% |
| Arvind Ltd | 25.67 | 12.5% | 17% |
| Pearl Global | 27.37 | 21.8% | 40% |
GEX’s P/E premium demands outperformance in ROCE and profit growth to avoid becoming “last season’s trend.”
Strategic Events & Business Triggers
- Capacity Expansion
- Added 200 Lakh-piece facility in Karnataka (H2 FY25) → +15% capacity
- Capital outlay: ₹120 Cr
- Client Diversification
- Onboarded two mid-premium US brands → reduces top-5 client concentration (currently ~40% of revenues)
- Backward Integration
- Linen stitching unit launched → captures ₹200 Cr of accessory value internally
- Sustainability Push
- Solar rooftops at two plants covering 30% peak load → trims power cost by ~8%
- Digitalisation
- ERP roll-out across all units → real-time production tracking, reduces working-capital days by 5 days
📌 EduInvesting Take
GEX is riding a monster wave of global demand recovery, boasting robust top-line and margin expansion. Yet, at 42× P/E, it asks investors to buy future growth at a steep premium. Unless double-digit margins persist and ROCE climbs north of 15%, this valuation could unravel faster than cheap polyester. 🤷♂️
⚖️ Fair Value Estimate
- Methodology: 3-yr profit CAGR of 45%, peer P/E 25–30×, target ROCE 15%
- Fair Value Range: ₹500–₹600
- Current Price: ₹909 → ~40–45% downside potential
Risks & Red Flags 🚩
- Valuation Stretch: Trades well above textile peers → any margin miss will sting
- Client Concentration: Top 5 clients = 40% revs → order loss risk
- Pledged Promoter Stake: 96% pledged → governance and refinancing risk
- Working Capital Cycle: Extended to 103 days → liquidity may be strained if global orders slow
Final Word
Gokaldas Exports weaves a compelling growth narrative, but its current valuation is tailored for high-fashion risk-takers. We’d wait for P/E cool-down or margin surge before stepping onto this runway. Until then, consider sidelines until the next collection drop. 😏
Author: Prashant Marathe
Date: 17 June 2025
Tags: apparel export, GOKEX, valuations, fashion manufacturing, KMP
