Gokaldas Exports Limited — Q3 FY26 earnings call

Call held 2 Feb 2026

Management summary

Gokaldas Exports reported flat revenue and an 18% decline in EBITDA for Q3 FY26, primarily due to the significant U.S. tariff burden. Despite this, India operations showed growth, and Africa is expected to rebound from Q4 FY26. The company is actively diversifying into Europe and expanding capacity, while awaiting clarity on trade agreements and U.S. demand.

Highlights

  • India operations revenue grew 8% Y-o-Y despite being impacted by the steep U.S. tariff.

  • EBITDA, adjusted for the burden share of U.S. tariffs, would have grown by 17%.

  • Africa business is expected to bottom out and show improvements from Q4 FY26, with H2 FY27 EBITDA margin targeted at 10%.

  • A new EU customer is being onboarded within the next 1-2 months, supporting European business growth.

  • Significant capacity expansion is underway in India and Kenya, with the BRFL acquisition progressing towards completion in Q2 FY27.

Concerns

  • Reported EBITDA declined 18% Y-o-Y to INR 96 crores, primarily due to sharing a net U.S. tariff burden of INR 40.2 crores with customers.

  • Africa's EBITDA margin was low at 1.5% in Q3 FY26, impacted by the expiry of AGOA and supply chain disruptions.

  • The U.K. FTA, signed in July 2025, has not yet taken effect, delaying tariff benefits for exports to the UK.

  • Muted U.S. demand growth is anticipated for 2026 due to potential inflation and retailers' inventory destocking.

Key financials

  1. Total Income ₹998 Cr 0%YoY
  2. EBITDA ₹96 Cr -18%YoY
  3. India Revenue Growth 8% +8%YoY
  4. India EBITDA Margin 10.5%
  5. Africa EBITDA Margin 1.5%
  6. US EBITDA Margin 6.5%

What they filed

Q1 FY27: revenue up 17.9%, net profit up 43.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue632 625 655 638 688 +9%672 +8%695 +6%752 +18%
EBITDA59 65 69 62 66 +12%56 −14%96 +39%92 +48%
Net profit53 49 53 48 53 +0%39 −20%63 +19%69 +44%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • India Operations
    8% Revenue Growth10.5% EBITDA Margin15.53 million pcs Volume₹572/pc Realization
  • Africa Operations
    1.5% EBITDA Margin3.68 million pcs Volume₹402/pc Realization
  • US Business
    6.5% EBITDA Margin
  • European Business
    13.5% EBITDA Margin

Capital allocation

high confidence
  • Capex ₹105 Cr
    • New capacity in Bhopal (2nd phase)
    • New capacity in Karnataka
    • Capacity expansion, new machineries, and additional unit in Kenya
    So there are 2 units in India, one in Bhopal, the second phase is coming up. The other unit in Karnataka. These 2 units are in advanced stages of execution completion, and we expect the commercial production to happen in the next financial year. Apart from that, we have expanded the capacity in Kenya. That's a substantial portion. We are installing new machineries and expanding the capacity, bringing up another unit additionally in the existing premises itself. That will also come on stream in the next financial year in Q1 FY '27.
  • M&A BRFL Acquisition · Pending regulatory · Consideration ₹[object Object] (mixed)

    Vertical integration and business traction growth

    Invested INR 175 crores in OCD and bought 19% stake for INR 72 crores; remaining equity stake to be bought in Q2 FY27 post regulatory approvals.

    So the BRFL business, if all goes as planned, it should happen sometime in the second quarter of next financial year. The exact timing cannot be stated here because it depends on the NCLT process and the regulatory process. So as and when it happens, it will our expectation is that it should happen sometime in Q2 of FY '27. ... So far, I think we have invested in OCD to the extent of about INR175 crores in BRFL. We've also bought 19% stake in the company, paying about INR72 crores. The rest of the stake -- equity stake will be bought as and when the regulatory approvals come in, in Q2 of next financial year.

Guidance & targets

Profitability

  • Africa EBITDA Margin (H1 FY27) Profitability · H1 FY27 · High confidence 7-8%
    So, Africa for next financial year, we are anticipating at least in the second half going to 10% in the first half, staying at between 7% and 8% EBITDA margin.

    — S. Ganapathi

  • Africa EBITDA Margin (H2 FY27) Profitability · H2 FY27 · High confidence 10%
    I am expecting Africa's EBITDA margin for next financial year, that is FY '27, by the second half of that year, cross 10% easily, maybe even stay at an average of about 10% in '27 based on the order volumes that we anticipate.

    — S. Ganapathi

  • India EBITDA Margin (long-term) Profitability · long-term · Medium confidence 12-13%
    I'm sure we'll be in 12% to 13% India margin for all businesses, including U.S.

    — S. Ganapathi

  • Africa EBITDA Margin (long-term) Profitability · long-term · Medium confidence 10-11%
    and about 10% to 11% in Africa.

    — S. Ganapathi

Revenue

  • Africa Revenue Revenue · FY27 · High confidence US$120-125 million
    Our endeavour for next financial year is to try to push African revenues to 120 US$ million, 125 US$ million or thereabouts next financial year.

    — S. Ganapathi

Market Share

  • European Revenue Share Market Share · Medium confidence 20-25%
    As far as the US-Africa mix is concerned, today, European business is closer to about 14%-15%, 16-odd percent of our total revenues. Intention is to take it up to 20%, 25%.

    — S. Ganapathi

Client Acquisition

  • New EU Customer Onboarding Client Acquisition · next 1-2 months · High confidence Onboarded
    We have also, as I said in my opening remarks, we have added one more customer whom we will onboard in the next 1 or 2 months.

    — S. Ganapathi

What to watch in Q4 FY26

AGOA Extension Status

February 2026
Current Pending US Congress approval
Target Clarity on extension

Why it matters

Restoration of AGOA would provide a significant tailwind for Africa business, improving margins and order book.

So it's going through the US Congress. My sense is it will we will get to know within a month as to the status of AGOA. Month of February, we will have a clarity.

Risks & concerns

  • High US Tariffs

    high

    The steep 50% US tariff on India resulted in a net burden of INR 40.2 crores, impacting Q3 FY26 EBITDA. The company is sharing this burden with customers and suppliers.

    Management acknowledged

  • AGOA Expiry (Temporary)

    medium

    Expiry of AGOA impacted Africa's order book in Q3 FY26, though there is a 'reasonable possibility' of extension, which would provide a 'massive tailwind'.

    Management acknowledged

  • UK FTA Implementation Delay

    medium

    The UK FTA, signed in July 2025, has not yet taken effect, meaning exports to the UK are still tariff-rated, delaying full benefits and volume shifts.

    Management acknowledged

  • Bangladesh Geopolitical Situation

    medium

    Concerns about macroeconomic situation and upcoming elections in Bangladesh are delaying direct investment decisions for diversification.

    Management acknowledged

  • Muted US Demand Outlook

    medium

    Management anticipates muted demand growth in the US for 2026 due to potential inflation, price increases, and retailers' inventory destocking.

    Management acknowledged

  • Reduced Export Incentives Allocation

    medium

    The allocation for RoSCTL and duty drawback has reduced compared to actual spend in 2025-26, which could impact future incentives if not corrected.

    Management acknowledged

Q&A highlights

5 direct
Margin Profile and Tariff Impact Direct
The whole U.S. tariff burden is that is the burden that we is the impact that we've had during this quarter. And that amounts to about INR40 crores, INR40.2 crores. That's the net cost of tariff burden that we shared with our customers.

Clarifies the primary reason for EBITDA decline and quantifies the tariff burden absorbed by the company.

Asked by Rehan Saiyyed, Trinetra Asset Managers

Africa Performance and AGOA Outlook Direct
There is a reasonable possibility of AGOA getting extended soon. This has allowed us to rebuild the Africa order book for future periods. ... But if AGOA is restored, then we will see a massive tailwind for Africa, primarily because the duty delta between Africa and rest of Asia will widen even more.

Provides an update on the critical AGOA status and its potential positive impact on Africa business, which was a concern this quarter.

Asked by Vishal Mehta, IIFL Capital

Bangladesh Diversification Strategy Partial
Any investment in Bangladesh would be considered only after some clarity on the macroeconomic situation in Bangladesh. There is an election supposed to happen sometime in February, and we will take a call post that, looking at how Bangladesh shapes up.

Explains the cautious approach to direct investment in Bangladesh, linking it to geopolitical and macroeconomic stability, which is a key diversification option.

Asked by Kaustubh Pawaskar, ICICI Securities

Total Penal Tariff Impact and Customer Negotiations Direct
The total impact of the penal tariff was closer to INR60 crores, and we set off about INR20 crores of it from our supply chain. ... No. So we have been negotiating with the customers so that we can ensure and assure our customers to stay with us.

Quantifies the gross tariff impact and highlights the ongoing customer negotiations to retain business despite the tariffs.

Asked by Rohit Maheshwari, Tata AIG

India Capacity Utilization and Future Ramp-up Direct
Our current utilization in Q3 is full, the manpower and machine power capacity, it's almost going full. So at the current run rate in Indian operation, we should be able to do the top line in the range of INR750 crores to INR800 crores. ... At the moment, we have not started ramping up people there while the factories have been built out because these decisions were taken pre-penal tariffs.

Details current utilization levels and explains the strategic delay in fully staffing new capacity due to tariff uncertainties, impacting immediate revenue potential.

Asked by Raman KV, Sequent Investments

US Retail Inventory and Demand Outlook Direct
So for now, U.S. imports are trending below U.S. retail sales. And that's interesting to see because then there is an incremental tightness in inventory that you will see happen in the U.S., which may reverse. ... I'm worried about U.S. U.S. inflation -- everything depends on U.S. interest rates, etcetera, going forward. But if U.S. demand slows in 2026...

Provides insights into the current US retail market dynamics (destocking) and management's cautious outlook on demand for 2026 due to macroeconomic factors.

Asked by Hitaindra Pradhan, Maximal Capital

Impact of US Supreme Court on Tariffs Partial
It's a very good question. At the moment, it looks unlikely because they have also borne the cost of all those litigations, et cetera, and that's a refund at risk. It's highly unlikely that, that benefit will accrue down to the supply chain.

Addresses the possibility of tariff refunds and clarifies that such benefits are unlikely to flow down to suppliers like Gokaldas, impacting potential upside.

Asked by Bharat Agnihotri, Individual Investor

Export Incentive Schemes in Budget Partial
the allocation to RoSCTL and duty drawback has reduced compared to the actual spend in 2025- '26. So I don't know how that's going to play out, unless the budget allocation is increased going forward, we are finding actually that the export incentives that we get and the budget allocated for that seems to have changed.

Highlights a potential concern regarding reduced government support for export incentives, which could impact future profitability.

Asked by Manjubhashini, Ask Wealth Advisory

2 min read 5 chapters

Detailed narrative

Q3 FY26 Performance and Tariff Impact

Gokaldas Exports reported a total income of INR 998 crores in Q3 FY26, maintaining a flat year-on-year performance. EBITDA for the quarter stood at INR 96 crores, reflecting an 18% decline year-on-year. This decline was primarily attributed to the significant impact of the steep 50% U.S. tariff on India, with the company absorbing a net burden of INR 40.2 crores, which was shared with customers. Management noted that, adjusting for this tariff burden, the company's EBITDA would have shown a growth of 17%.

Strategic Response to Tariffs and Diversification

In response to the challenging tariff environment, Gokaldas Exports implemented several mitigation strategies. These included strengthening relationships with U.S. customers and offering discounts to partially offset the tariffs, as well as streamlining operations in India and Africa to reduce unit costs. The company is actively pursuing business growth from Europe, aiming to increase its share of total revenues to 20-25%, and has successfully onboarded a new EU customer expected to contribute within the next 1-2 months. This strategy aims to rebalance revenue streams between the U.S. and Europe.

Africa Business Turnaround and AGOA Outlook

Africa's business faced headwinds in Q3 FY26, with the EBITDA margin at 1.5%, primarily due to the expiry of AGOA and earlier supply chain disruptions, including port congestion in Mombasa which has since been resolved. However, management expressed confidence that the Africa region has bottomed out, with performance expected to improve from Q4 FY26 onwards. This optimism is driven by Africa regaining its tariff advantage over Asian competitors and the 'reasonable possibility' of AGOA extension, which is anticipated to be clarified in February 2026 and would provide a 'massive tailwind' for the region.

Capacity Expansion and BRFL Acquisition Update

The company has planned INR 105 crores for new capacity additions in FY26, including the second phase of a unit in Bhopal, a new unit in Karnataka, and expansion in Kenya with new machinery, all expected to be commercial by Q1 FY27. While existing physical capacity in India could generate an additional INR 500 crores in revenue, full ramp-up and staffing are being cautiously managed due to ongoing tariff uncertainties. The acquisition of BRFL is progressing, with INR 175 crores invested in OCD and a 19% equity stake acquired for INR 72 crores, with the remaining stake expected to be purchased in Q2 FY27 pending regulatory approvals.

Long-Term Outlook and Market Dynamics

Looking ahead, Gokaldas Exports anticipates long-term India EBITDA margins to settle at 12-13% and Africa margins at 10-11% once tariff issues are resolved. Management noted a cautious outlook for U.S. demand in 2026, expecting muted growth due to potential inflation and retailers' ongoing inventory destocking. The upcoming India-EU FTA, once operational, is expected to open significant market access, placing Indian exporters on par with competitors like Bangladesh and Vietnam, and accelerating sourcing from India.

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