India's Gokaldas hits record high on deal giving it cheaper US market access

Gokaldas Exports

29/08/2023 08:19

BENGALURU, Aug 29 (Reuters) - Shares of India's Gokaldas
Exports'  GOKL.NS  surged 20% to a record high on Tuesday, a day
after it unveiled a deal that would help it ship apparel
duty-free to its key market of the United States.
    Gokaldas' shares, which have already more than doubled so
far this year, jumped to an all-time high of 735.35 rupees, with
trading volumes that were about 13 times the daily moving
average.
    The stock's surge came a day after the apparel manufacturer
said it would buy Dubai-based Atraco Group for $55 million in a
deal that will also give it access to other key export markets
and boost production.
    However, Gokaldas said a key attraction was Atraco's
duty-free access to the United States, compared with its current
duties of 11% to 28%. While Gokaldas call the U.S. a key market,
it has not said how much the country contributes to sales.
    Atraco has one manufacturing unit in Ethiopia and four in
Kenya, and exports about 95% of its output to the United States.
    Gokaldas's net profit has fallen in the first two quarters
of this calendar year due to sluggish demand, after having risen
for six consecutive quarters, according to Refinitiv data.
    However, after dropping following the latest quarterly
results on Aug. 8, the stock has surged nearly 53%, including
the gains on Tuesday.

 (Reporting by Sethuraman NR in Bengaluru; Editing by Savio
D'Souza)
 ((Sethuraman.NR@thomsonreuters.com; (+91 9945291420); Reuters
Messaging: nallur.sethuraman.thomsonreuters.com@reuters.net))