Gokaldas Exports reports Q2FY27 revenue up 13%

Gokaldas Exports Ltd ( GOKEX ) delivered a 13 percent year-on-year revenue increase in Q2FY27 despite a seasonally weak quarter. Operating margins rose by 280 basis points year-on-year. The company sustained growth momentum through a 10 percent revenue rise in its India business, backed by 6.2 percent volume growth. Meanwhile, the Africa segment rebounded with 32 percent revenue growth and an 18.2 percent increase in volumes, recovering from a low base affected by US tariff disruptions in the previous year. These results matter because they demonstrate strong execution in a period of cautious consumer spending and inventory corrections across the US, Europe, and the UK. Capacity additions in Bhopal and Ranchi, alongside the proposed acquisition of fabric business BTPL, aim to strengthen vertical integration and improve lead times. Management plans to increase internal fabric consumption from BTPL to at least 50 percent by FY29. While headline numbers look positive, profitability growth was partly flattered by the weak base of Q2FY26. Furthermore, net debt is projected to climb from Rs 429 crore to between Rs 650 crore and Rs 700 crore by the end of FY27 due to capital expenditure, working capital needs, and BTPL integration costs. Investors should watch quarterly progress on debt levels, capacity utilization targets reaching 92 to 93 percent in India during Q3, and the operational turnaround of BTPL toward EBITDA breakeven. Rating: Overweight at [CMP: Rs 676](GE05). Valuation trades at 18x FY28 earnings.