Gokaldas Exports Q1 Results Review - Revenue Up But Costs Pressure Profitability: Systematix

Systematix Report

Gokaldas Exports Ltd. Q1 FY25 standalone revenue (excluding acquired companies) at Rs 5.6 billion was up 10% YoY (down 3% QoQ) and broadly in line, backed by an improving demand environment in the base business. Standalone gross margin expanded 275 basis points YoY but contracted 127 bps QoQ to 53.2% (above our estimate of 50%).

However, Ebitda margin contracted 261 bps YoY and 432 bps QoQ to 9.2% due to higher employee costs and other expenses (estimated at 10.5%). Ebitda fell 15% YoY and 34% QoQ to Rs 518 million.

Standalone profit after tax reported muted 2.5% YoY growth and was down 38% QoQ to Rs 365 million. Consolidated revenue (including acquired entities) jumped 15% QoQ to Rs 9.3 billion (estimate Rs 8 billion). On the cost front, GEXP faced headwinds from

1. production disruptions in April and May at most factories causing shipment delays and higher overtime and air freight costs,

2. scale-up in workforce in anticipation of volume growth in H2 FY24,

3. slower-than-anticipated ramp-up of new units (Madhya Pradesh and Tamil Nadu), and

4. sharp spike in air freight expenses at Atraco.

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