Gokaldas Exports Limited , a prominent player in the Indian textile industry, reported a 7% year-on-year growth in total income for Q2FY26, reaching INR 1,003.00 crores. The company demonstrated resilience in the face of significant challenges, particularly the imposition of a 50% US penalty tariff on Indian apparel exports.

Key Highlights

• Revenue Growth: Despite headwinds, Gokaldas Exports achieved a 7% year-on-year increase in total income, reaching INR 1,003.00 crores in Q2FY26.
• India Operations: The company's India operations showed robust performance with a 14% year-on-year growth, outpacing the overall 2% decline in Indian apparel exports.
• US Tariff Impact: The 50% US penalty tariff, imposed in late August 2025, impacted margins by approximately INR 12.00-15.00 crores in the quarter.
• Africa Operations: Revenue from Africa declined by 24% year-on-year due to uncertainties surrounding the African Growth and Opportunity Act (AGOA).
• EBITDA Performance: The company reported an EBITDA of INR 84.00 crores, maintaining flat year-on-year growth despite tariff challenges.

Operational Performance

Strategic Initiatives

1. Tariff Mitigation: Gokaldas Exports implemented tariff burden-sharing agreements with customers to maintain business momentum.
2. Order Book Strength: The company secured a robust order book of INR 900.00+ crores for India operations and INR 240.00-250.00 crores for Africa operations.
3. Market Diversification: Increased focus on expanding relationships with customers in the UK and Europe to reduce dependence on the US market.
4. Capacity Expansion: Ongoing investments in new facilities in India and Africa to support future growth.

Management Commentary

Sivaramakrishnan Ganapathi, Vice Chairman and Managing Director, stated, "Through good relationship management and meaningful partnerships on tariff burden share, the company has retained its U.S. business and has managed to secure a strong order book from our existing customers for the near future."

Outlook

While the US tariff situation remains a challenge, Gokaldas Exports is optimistic about potential tariff rationalization. The company expects stronger performance from its Africa operations in the coming quarters, supported by a favorable tariff regime. The management remains focused on customer engagement, cost optimization, and productivity gains to navigate the current challenges.

The recent India-UK FTA announcement and potential trade deals with the EU present significant opportunities for Indian apparel exporters, including Gokaldas Exports, in the medium to long term.

Investors should note that while the company has demonstrated resilience, the ongoing tariff situation and global economic conditions may continue to impact performance in the near term. However, Gokaldas Exports' strategic initiatives and diverse market presence position it well for future growth once the current headwinds subside.

Gokaldas Exports Limited , a leading apparel manufacturer and exporter, has announced its financial results for the second quarter ended September 30, 2025. The company reported a net profit of Rs 808.36 lakhs, marking a significant decrease from the previous quarter's Rs 4,147.34 lakhs. However, the company's revenue from operations showed a positive trend, increasing by 6% year-over-year to Rs 98,435.36 lakhs.

Financial Highlights

Despite the challenging market conditions, Gokaldas Exports managed to grow its revenue by 6% compared to the same quarter last year. The company's total income for Q2 FY26 stood at Rs 100,331.60 lakhs, up from Rs 94,181.63 lakhs in Q2 FY25.

Operational Performance

The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for Q2 FY26 was Rs 8,357.83 lakhs, showing a marginal increase of 1.5% from Rs 8,236.30 lakhs in Q2 FY25. However, the EBITDA margin decreased to 8.3% in Q2 FY26 from 8.7% in Q2 FY25.

Challenges and Impacts

The significant decrease in net profit can be attributed to several factors:

1. Increased raw material costs: The cost of materials consumed rose to Rs 46,373.02 lakhs in Q2 FY26, up from Rs 47,915.41 lakhs in Q2 FY25.
2. Higher employee benefit expenses: These increased to Rs 32,593.15 lakhs from Rs 28,576.21 lakhs year-over-year.
3. Finance costs: These rose to Rs 2,226.20 lakhs from Rs 1,798.40 lakhs in the same quarter last year.

Strategic Developments

During the quarter, Gokaldas Exports made strategic moves to strengthen its position:

1. The company acquired additional equity shares in BRFL Textiles Private Limited for Rs 1,631.96 lakhs, increasing its total equity interest to 19%.
2. The Board of Directors approved a scheme of amalgamation of BRFL Textiles with Gokaldas Exports, subject to regulatory approvals.

Management Commentary

Sivaramakrishnan Ganapathi, Vice Chairman and Managing Director of Gokaldas Exports, commented on the results: "Our performance in Q2 was modest, impacted by low volume in our Africa business due to the AGOA rollover uncertainty, while India operations remained robust. The EBITDA margins remained flat YoY due to operating deleverage at our Africa business, US tariff impact, and startup costs owing to the new business/units. Despite the tariff overhang, the Company sees a strong order book buildup in the quarters ahead for both India and its Africa business, based on a possible reinstatement of AGOA."

Outlook

While the company faces short-term challenges, management remains optimistic about future growth prospects. The strong order book and potential reinstatement of AGOA (African Growth and Opportunity Act) could positively impact the company's performance in the coming quarters.

Investors and stakeholders will be watching closely to see how Gokaldas Exports navigates these challenges and capitalizes on emerging opportunities in the global apparel market.