Gokaldas Exports Ltd. witnessed its most significant single-day decline in nearly four years on January 8, with shares plummeting over 12%. This marked the company's biggest fall since April 2020, highlighting mounting investor concerns over US trade uncertainties.

Stock Performance Analysis

The export-oriented company's shares have been under sustained pressure, declining in five out of the last six trading sessions. Over the past five weeks, the stock managed gains in only five trading sessions, with just one day of positive movement recorded in each week.

With this decline, the stock has reached its lowest level since August 2023, representing a 29-month low. Trading volumes surged significantly, with over 20 lakh shares changing hands compared to the 20-day average of 1.5 lakh shares.

Broader Sector Impact

The weakness extended beyond Gokaldas Exports, with other export-oriented companies also facing selling pressure during the trading session:

• Avanti Feeds: Declined 3-7%
• Pearl Global: Fell 3-7%
• Apex Frozen Foods: Dropped 3-7%

Trade Uncertainty Concerns

Uncertainties surrounding trade deals with the US are weighing heavily on these companies as the new year begins. This period is crucial for contract negotiations, with most annual agreements typically locked during this timeframe. Indian exports currently face a 50% tariff when entering the US market.

According to a Bloomberg report, a large Indian shoemaker indicated that January 15 serves as the cutoff date for securing bulk orders from the US to ensure stable revenue for the summer and autumn seasons.

Revenue Exposure Analysis

Several companies demonstrate significant dependence on the US market for their revenue streams:

However, industry associations have noted that companies and exporters have been diversifying their market presence, finding alternative destinations including the European Union for their export operations. This diversification strategy aims to reduce dependence on the US market amid ongoing trade uncertainties.

Upcoming Catalysts

The companies are expected to report their third-quarter results soon, which will provide insights into their operational performance during this challenging period. These results will be closely watched by investors for indicators of how trade uncertainties are impacting actual business performance and revenue generation.

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.