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Chota Packet Bada Dhamaka! This multibagger stock zoomed over 350% in one year

Chota Packet Bada Dhamaka! This multibagger stock zoomed over 350% in one year

The stock rose 5.5 per cent to hit an intraday high of Rs 389.50 on the Bombay Stock Exchange (BSE).

Chota Packet Bada Dhamaka! This multibagger stock zoomed over 350% in one year Chota Packet Bada Dhamaka! This multibagger stock zoomed over 350% in one year

Shares of Bengaluru-based garment exporter Gokaldas Exports Limited (GEL) have delivered over 350 per cent return to its shareholders in the last one year. The stock rose 5.5 per cent to hit an intraday high of Rs 389.50 on the Bombay Stock Exchange (BSE).

In the past one year, the share price jumped from Rs 86 to Rs 389.5, logging around 353 per cent return in this period. An amount of Rs 5 lakh invested in this multibagger stock a year ago would have turned into Rs 22.64 lakh today.

The scrip has jumped around 17 per cent since the beginning of this year. With a market capitalisation of  Rs 2,250 crore, the shares stand higher than 20 day, 50 day, 100 day and 200 day moving averages but lower than 5 day moving averages.

Recently, Gokaldas Exports reported a healthy set of numbers for the quarter ended December 2021. The consolidated profit of the company jumped 398 per cent to Rs 30.11 crore for the quarter ended December 2021 as against a net profit of Rs 6 crore in the year-ago quarter. The company's net sales rose 96 per cent to Rs 520.61 crore during the quarter.
 
The company said that the order book continues to be strong for the fourth quarter of FY22. Apparel sales growth in the target market, the USA, is robust with in-store and e-commerce sales showing good growth year-on-year, as well as over 2019.
 
Raw material prices have gone up substantially recently. Global brands have attempted to increase the retail prices of apparel to offset these trends, it added.
 
Brokerage house ICICI Direct noted that the production is currently running at peak utilisation levels with a robust order book for the next six months. The company has charted out capex of Rs 340 crore over the next four years (by FY25E), which will have the potential to generate incremental revenues worth Rs 1300 crore.
 
It noted that GEL is planning to backward integrate and start a fabric processing unit for the knitted segment with a capex of Rs 100 crore. The management believes the knits market is growing faster than the woven’s market (97 per cent of sales) and it provides an immense opportunity to diversify its product offering.
 
ICICI Directs also said that with the recent fundraise (QIP: Rs 340 crore), the company has strengthened its balance sheet with repayment of Rs 240 crore debt, post which GEL has become net debt-free (net cash surplus: Rs 71 crore). Also, the enhanced government focus on apparel exports and China +1 strategy of global brands provide long-term growth opportunities for players like GEL.
 
The brokerage firm stated GEL as a structural long-term story to play the apparel export space. It has a 'Buy' rating on the stock with a target price of Rs 480 per share.