Gokaldas Exports shares hit a 52-week high after $55 million acquisition deal with apparel maker Atraco

Shares of Bangalore-based company Gokaldas Exports hit a 52-week high to touch an upper limit of Rs 736.30 after it entered into a $55 million deal to acquire Atraco Group (Atraco), a leading manufacturer of apparel with a strong market position and customer relationships across the US and Europe. 

"Gokaldas Exports Limited (GEL) through its wholly owned subsidiaries has entered into an agreement to acquire Atraco Group (Atraco), a leading manufacturer of apparel with a strong market position and customer relationships across U.S. and Europe. Their product range includes shorts, pants, shirts, t-shirts, blouses and dresses catering across age groups," the company said in a BSE filing.

The company's shared started the day at Rs 652.00 before surging to a high of Rs 736.30 on Tuesday, a 20 per cent jump from the previous-day close.  

Informing more about the deal, the company said, "The equity value of the transaction is US$ 55 million and the same will be funded by a mix of debt and internal accruals. The transaction will comprise of acquisition of shares and assets and will be subject to customary regulatory approvals. The transaction is expected to be closed by Q3 FY24 (October-December 23)." 

The stock has breached the target price of Rs 632 apiece given by Zee Business Senior Research Analyst Arman Nahar.

Zee Business panellist, Kunal Saraogi has recommended holding shares of Golkaldas Exports as it is outperforming compared to its peers. He has given a trailing stop loss of Rs 575 apiece for the scrip.

Golkaldas Exports Q1 results

The company's net profit fell 17.4 per cent at Rs 32.5 crore against Rs 39.4 crore year-on-year (YoY).

The company's revenue also declined 15.7 per cent at Rs 514.7 crore versus Rs 610.6 crore a year ago.

As per management, the decline can be attributed to weak retail demand in Autumn-Winter 2022, inflationary trends, high-interest rates, and a mild winter, which contributed to excess inventory, impacting offtake.

Gokaldas Exports share price: Past performance

In 2023 so far shares of Gokaldas Exports have outperformed the headline index by gaining over 99 per cent against 6.23 per cent.