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Gokaldas Exports FY26: Growth held up, but tariffs and working capital left their mark

Gokaldas Exports ended FY26 with a mixed set of signals. Revenue growth stayed positive despite a volatile trade environment, but profitability and cash metrics reflected the cost of disruption.

On a consolidated basis, total income for FY26 was INR 4,065 crore, up 4% year on year. Adjusted EBITDA rose to INR 530 crore, with adjusted EBITDA margin improving to 13.0% from 11.4% in FY25. Reported EBITDA, however, was INR 434 crore, and profit after tax fell to INR 100 crore, down 37% year on year.

Management framed FY26 as a year of “spectacular disruptions”, led by the US reciprocal tariff regime that, for a meaningful part of the year, made India materially less competitive versus peer sourcing markets. The company said it offered net discounts of over INR 90 crore during the year to offset tariff burden. The later part of the year also saw war-related cost inflation affecting fuel-linked inputs, trims, polyester, cotton prices, and shipping.

Q4FY26: Pricing reset helped margins, but PAT remained pressured

Q4FY26 consolidated revenue from operations was INR 1,069 crore, up 5% year on year and 9% quarter on quarter. Adjusted EBITDA was INR 153 crore, with a 13.8% adjusted margin. The company indicated EBITDA for the quarter faced an estimated INR 18 crore impact from US tariffs.

Profit after tax for Q4FY26 was INR 36 crore, down 32% year on year but up sharply sequentially from INR 15 crore in the prior quarter.

A key point from management was that after the penal tariff regime eased in February 2026 and tariffs moved to a lower level post the Supreme Court ruling, pricing with customers was reset, improving margins versus the earlier discounted shipment period.

FY26 by geography: India steady, Africa hit by AGOA uncertainty

The presentation provides a clear FY26 regional split between India and Africa.

India operations delivered INR 3,373 crore of total income and INR 418 crore of EBITDA, translating to a 12.4% EBITDA margin. Africa contributed INR 692 crore of total income but only INR 16 crore of EBITDA, a 2.3% margin.

Management noted that India business grew 10% year on year in FY26 despite tariff uncertainty, while India’s overall apparel exports declined 1.4% in the same period. Africa business declined 19% in FY26 as customers reduced order placement in Q2 and Q3 due to AGOA renewal uncertainty. After AGOA was extended through December 2026, Africa returned to growth in Q4.

Operationally, FY26 volumes were 57 million pieces, with India at 41 million and Africa at 16 million. Average selling price in India was INR 730 per piece versus INR 420 in Africa.

Balance sheet: Capex continued, net debt rose as working capital expanded

FY26 was also a year where balance sheet intensity increased.

Capex for FY26 was INR 228 crore, with INR 58 crore toward modernization and upgrades and INR 170 crore toward new capacity and projects. The company also disclosed an investment of INR 122 crore in BTPL via a combination of debentures and equity.

Net debt increased to INR 553 crore in FY26 from INR 158 crore in FY25. The company attributed this to capacity investments, incremental working capital requirements, and the additional BTPL investment.

Working capital metrics moved in the wrong direction. Net working capital days increased to 75 days in FY26 from 60 days in FY25. In the concall, the CFO said the company advanced raw material imports by about INR 50 to 60 crore to support Q1 FY27 execution, partly due to Chinese holidays affecting supply timelines. Management stated an intention to reduce working capital by about INR 75 to 100 crore in FY27 for Gokaldas and Atraco operations.

Cash flow from operations showed operating profit before working capital changes of INR 380 crore in FY26, but cash flow from operating activities was INR 52 crore after working capital and taxes.

What management is watching for FY27

The near-term outlook is shaped by three variables highlighted repeatedly in both the presentation and transcript.

First is the tariff regime. Management said the withdrawal of the additional penal tariff in February and the Supreme Court ruling reduced the burden, with a 10% tariff imposed under an alternate provision until July 24, 2026. Management also noted the possibility of tariffs being restored to higher levels after that date, potentially through another section, but suggested that any re-imposition may be more broadly aligned across competing Asian nations.

Second is Africa’s recovery path. Management guided that the Africa business should improve meaningfully in FY27. They indicated a FY27 Africa revenue level of about USD 115 million to USD 120 million versus about USD 80 million in FY26, and they expect Africa EBITDA margin to improve to 8% to 10% in the second half of FY27.

Third is execution on newer investments, especially BTPL. In the concall, management said BTPL revenue was INR 190 crore in Q4FY26 and the entity had an EBITDA loss of about 4% to 5%. The CFO guided that BTPL aims to be EBITDA breakeven in H1 FY27 and reach 6% to 7% EBITDA margin in H2 FY27. Management also stated FY27 revenue for BTPL should be in excess of INR 1,000 crore, based on current momentum.

Takeaways

Gokaldas Exports exited FY26 with its revenue base intact and adjusted operating metrics improved, even as the year absorbed exceptional external shocks. The trade-off showed up in PAT and in balance sheet build-up, with net debt and working capital increasing.

FY27 is positioned by management as a year of normalization. Tariff-related discounts reduced after February 2026, Africa is expected to rebound sharply under renewed AGOA, capacity ramps in India are in progress, and BTPL has a stated path toward breakeven and positive margins in the second half. The key risk remains that tariffs and war-driven input inflation could reintroduce cost and demand volatility, making execution discipline and working capital control central to the investment narrative.