Given the 50% Trump tariff shocker, the export-oriented companies are in focus on the back of worries about the potential impact. In this backdrop, the question is what’s the right approach for these stocks? Well, JM Financial has revised the earnings estimates for Gokaldas Exports downwards and also revised the price target lower by 20% to Rs 1,020 per share from Rs 1,265 per share. This still implies nearly 36% upside for the share price, from current levels.
The brokerage house believes that in the long-term, sourcing diversification remains a key theme for global retailers, and India remains one of the top contenders. This is one of the reasons they maintained the Buy rating and kept it unchanged. They have revised the earnings for the company downwards by 37% for FY26 and 35% for F27.
JM Financial on Gokaldas Exports: Tariff a near-term challenge
Gokaldas Exports management, in the analyst call, highlighted that they expect margin pressure in Q2 given a burden share of increased tariff and a seasonally weak quarter. JM Financial too flagged these near-term headwinds for the company.
The recently announced revised reciprocal tariff by the US on India “is expected to pose a challenge in H2FY26, as most of the order bookings for the next quarter are already closed. US brands are adopting various strategies for cost optimisation amidst the uncertain situation,” they added.
The cost optimisation initiatives by US companies may include
-Raising end-retail prices (potentially dampening demand)
-Absorbing part of the cost internally and
-Negotiating discounts from manufacturers.
However, JM Financial highlighted that “though near-term challenges persist, long-term outlook for the company remains stable given excellent execution, increasing addressable market with UK FTA in place and Africa business continuing to be an advantage with 10% tariff on Kenya.”
The brokerage house added that the “ongoing FTA negotiations with the EU-27 and bilateral discussions with the US,” is also in focus. They believe, any positive outcome on the US-India trade deal might abate the near-term impact and turn out to be a growth driver for the company.
Gokaldas Exports management expects margins to normalise in FY27
According to the Gokaldas Exports management, “margins may be back to normal by early FY27 once additional costs are passed on to consumers.”
The other key drivers for the company include,
-Revenue for acquired entities during the quarter came in at Rs 282 crore
-BTPL ramp-up remains on track; decision on BTPL merger to be announced soon.
JM Financial on Gokaldas Exports: long-term not a worry
Even though near-term challenges persist, long-term outlook for the company remains stable. This is because of the company “delivering good margins even in turbulent times, increasing addressable market and ongoing FTA negotiations with the EU-27.”