Gokaldas Exports Reports Strong Financial Growth Amid Valuation Concerns and High Pledged Shares

Gokaldas Exports, a small-cap player in the Garments & Apparels industry, has recently undergone an adjustment in its evaluation. The company has reported positive financial performance for the quarter Q1 FY25-26, showcasing a robust ability to service its debt, evidenced by a low Debt to EBITDA ratio of 1.48 times.
In terms of growth, Gokaldas Exports has demonstrated healthy long-term trends, with Net Sales increasing at an annual rate of 25.01% and Operating Profit rising by 60.83%. The company has consistently declared positive results over the last three consecutive quarters, with Net Sales for the first nine months reaching Rs 2,958.90 crore, reflecting a growth of 28.87%. Additionally, the Profit After Tax for the latest quarter stood at Rs 41.47 crore, marking a growth of 52.6%.

Despite these positive indicators, the company’s valuation appears expensive, with a Return on Capital Employed (ROCE) of 9.9 and an Enterprise Value to Capital Employed ratio of 2.8. Furthermore, 96.28% of promoter shares are pledged, which may exert additional pressure in volatile market conditions.

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