Gokaldas Exports (GOKEX)

FairStock Score: 30/100 — RISKY

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Quarterly sales of ₹979 Cr indicate meaningful scale in garment manufacturing.
• Debt/Equity of 0.46 is moderate, so the balance sheet is not over-leveraged.
• The company remains profitable at ₹15 Cr latest quarter net profit despite the downturn.
• Book value of ₹280.34 provides some tangible asset cushion.

Concerns

• Profit growth collapsed by 70.98%, and latest net margin is roughly 1.5% on sales.
• Valuation is expensive at P/E 40.04 and P/B 2.59 for a deteriorating business.
• Promoter holding of 9.16% is extremely low, signalling weak owner alignment.
• Piotroski F-Score of 3/9 and zero dividend indicate weak financial health and no shareholder return.

AI Analysis

At ₹725.70, Gokaldas Exports has a market cap of ₹4,685 crore. I start with earnings, not hope. The latest quarter net profit is only ₹15 crore on ₹979 crore sales — that is a razor-thin margin. Profit growth is down 70.98%, and sales are flat at -0.92%. A garment exporter in a fiercely competitive global market cannot command pricing power. This is a commodity-like business with low barriers to entry; buyers can shift orders to any low-cost country. So I need an exceptional balance sheet and management to compensate. What do I see? Return on equity is 9.51%, return on capital employed 10.62% — acceptable but not compensatory for the risk. Debt-to-equity of 0.46 is manageable, but with profits collapsing, fixed charges become heavier. The Piotroski F-Score of 3/9 tells me fundamentals are deteriorating. And promoter holding of only 9.16% is a red flag: those closest to the business have very little skin in the game. I want owner-operators with wealth aligned with mine; here, alignment is absent. The company pays no dividend, so I cannot even earn while waiting. At 40 times earnings and 2.59 times book value, the market is pricing in a strong recovery. Benjamin Graham would call this speculation, not investment. There is no margin of safety in a business whose earnings have fallen off a cliff. The 52-week range shows a volatile, beaten-down stock, but a falling price is not automatically cheap. I would rather miss this bounce than risk permanent capital. If earnings recover, management raises ownership, and margins return to respectable levels, I will revisit. Today, Gokaldas fails my test of a wonderful business at a fair price.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer