Gokaldas Exports, a leading Indian apparel manufacturer, is poised to capitalise on the government’s ambitious textile export plans. As India aims to boost its textile and apparel exports, companies like Gokaldas are strategically positioning themselves to leverage these opportunities.

This article examines India’s textile export industry, with a particular focus on Gokaldas Exports market position and growth prospects. It analyses the company’s financial health, strategic acquisitions, and operational capabilities in the context of India’s ambitious textile export initiatives.

This article also assesses Gokaldas Exports competitive strengths, industry trends, and potential hurdles to offer a comprehensive perspective on the company’s role in shaping India’s future as a global textile manufacturing hub. Additionally, it explores how government policies and market dynamics are likely to influence Gokaldas Exports’ trajectory in the evolving textile export landscape.

Industry Outlook

The global apparel market is experiencing significant growth and transformation. Projected to reach US$ 2.4 trillion by 2030, the industry is rebounding strongly from pandemic-related setbacks. This growth is driven by several key factors, including rising disposable incomes, changing consumer preferences, and the rapid expansion of online retail.

The United States remains a dominant force, accounting for nearly 20% of overall sales. However, emerging markets, particularly in Asia, are increasingly shaping the industry landscape. The sector’s resilience is evident in its ability to adapt to challenges, such as the COVID-19 pandemic, by embracing digital solutions and focusing on sustainability.

As the industry evolves, it presents a myriad of opportunities for market participants, from established brands to innovative startups. The textile and apparel trade has reached a substantial value of US$ 871 billion, with apparel accounting for a significant portion at US$ 505 billion.

China maintains a commanding position, leading global apparel exports with a 33% market share. However, the industry landscape is shifting, with emerging Asian countries gaining ground. Bangladesh, Vietnam, and India are increasing their market shares, capitalising on factors such as lower production costs and improving infrastructure. 

This shift is reshaping the global supply chain, creating new opportunities for countries to establish themselves as key players in the apparel export market. The industry’s future looks promising, with projections indicating continued growth and resilience. As geopolitical tensions and rising labour costs in China potentially alter the market dynamics, other nations are poised to benefit from this transition.

This evolving landscape presents both challenges and opportunities for industry participants, encouraging innovation, sustainability initiatives, and the development of new production hubs.

Company Overview Of Gokaldas Exports

Gokaldas Exports stands as a leading apparel manufacturer with over four decades of industry experience. The company excels in producing a wide range of apparel, including outerwear, activewear, and fashion wear for all seasons. Since its inception in 1979, Gokaldas has earned the trust of top global brands, becoming a comprehensive solution provider in the apparel industry.

With 20+ state-of-the-art, fully integrated manufacturing facilities and an annual production capacity of 36 million pieces, the company demonstrates its commitment to quality and efficiency. Gokaldas employs over 26,000 skilled professionals, with women comprising 75% of its workforce. The company’s strong focus on sustainability and innovation is evident in its 15,000+ advanced machines and five value-added service units.

Gokaldas serves 50+ brands across various countries, achieving an annual turnover of ₹2,379 crore. This success stems from its dedication to superior customer engagement, operational efficiency, and strategic growth initiatives, positioning Gokaldas as a key player in the global apparel manufacturing sector.

Financials Of Gokaldas Exports

Revenue: Gokaldas Exports has demonstrated impressive revenue growth, increasing from ₹1,371 crores in FY2020 to ₹2,379 crores in FY2024, reflecting a compound annual growth rate of 11.65%. 

Net Profit: The company’s net profit has also shown significant improvement, rising from ₹30 crores in FY2020 to ₹131 crores in FY2024, despite a dip from the previous year’s peak of ₹173 crores.

Return on Asset (ROA):  Gokaldas Exports Return on Asset (ROA) has fluctuated over the years, peaking at 12.89% in FY2023 before settling at 6.42% in FY2024, indicating varying levels of efficiency in utilising its assets to generate profits.

Debt: The company’s debt levels have seen substantial changes, initially decreasing from ₹442 crores in FY2020 to ₹154 crores in FY2023, but then significantly increasing to ₹805 crores in FY2024. This shift in the company’s financial strategy is mainly caused by the acquisition of the two companies through a combination of debt and equity.

Strategic acquisitions 

Gokaldas has made significant strides in expanding its product offerings and market access through strategic acquisitions. The company invested INR 934 crores to acquire Atraco and Matrix, aiming to diversify its portfolio and tap into new markets. These acquisitions will contribute to the company’s growth, with targeted EBITDA margins of 10.5% for Atraco and 11% for Matrix in the medium term.

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Future Outlook Of Gokaldas Exports

Key factors that will lead to future growth

• India offers a cost-effective labour force with a large pool of skilled workers, balancing low costs with textile expertise. The country’s integrated textile industry, especially in cotton, combined with competitive power costs creates an advantageous manufacturing environment.

• As one of the world’s largest producers of cotton, jute, and silk, India has abundant raw materials for textile production. This abundance, coupled with cost-effective labour, gives India a competitive edge in manufacturing costs compared to many other countries.

• India has strong port connectivity and ranks second alongside Vietnam, while the government actively supports the textile industry. This support, combined with geopolitical factors, creates opportunities for India to benefit from China+1 strategies.

• India’s young population, with a median age of around 28, represents a significant consumer group for textiles and apparel. This demographic drives consumer sentiment and fuels demand in the textile industry.

• The rise of e-commerce in India has led to strong growth in online shopping for textiles and apparel. This trend allows the industry to reach a larger consumer base, catering to preferences for convenience, variety, discounts, and easy returns.

Favourable government initiatives

• The Indian government is actively pursuing bilateral trade agreements to boost exports, having concluded FTAs with the UAE and Australia, with UK discussions nearing completion. Negotiations are also underway with the EU, USA, Canada, and South Korea to expand market access and create new trade opportunities.

• The government has extended the RoSCTL scheme until 2024, providing relief to export companies and ensuring policy stability. This decision aims to encourage increased investments and job creation across India.

• To strengthen India’s position in the man-made fibre (MMF) sector, the government has introduced the Production Linked Incentive (PLI) Scheme with an estimated outlay of ₹10,683 crores. This initiative aims to boost India’s dominance in MMF, which accounts for 70% of global textile fibre consumption.

• The Mega Integrated Textile Region and Apparel (MITRA) Parks Scheme aims to establish seven state-of-the-art parks over three years, featuring advanced facilities and shared utilities. This initiative seeks to attract investments, drive innovation, and develop a robust textile ecosystem in India.

• The government plans to introduce the Textiles Technology Development Scheme (TTDS) with an allocation of ₹16,635 crore over five years to promote technology adoption and modernisation in the textile sector. The scheme will fund textile machinery, technology upgrades, and integrated manufacturing, although PLI scheme beneficiaries will not be eligible for TTDS benefits.

Gokaldas expects strong demand in the coming quarters and focuses on improving margins and enhancing operations. The company’s strategic initiatives, coupled with the government’s supportive policies for textile exports, set a promising stage for future growth.

Key metrics Of Gokaldas Exports

Conclusion

Gokaldas Exports stands to benefit significantly from the government’s textile export plans. With strategic acquisitions and improved finances, the company is positioned to capitalise on textile export market opportunities. As India aims to increase its global market share in textiles, Gokaldas is poised to play a crucial role in this expansion. Gokaldas has the potential to emerge as a key beneficiary of the government’s export-orientated policies.

Regarding the textile industry as a whole, what are your thoughts? Will Gokaldas grow much more quickly as a result of these government initiatives? Please share your opinions with us in the comments section.

Written By Fazal Ul Vahab

By utilizing the stock screener, stock heatmap, portfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks, also get updated with stock market news, and make well-informed investments.

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