Textile stock falls 7% after announcing weak Q3 results; Check the details

Synopsys:- Q3FY26 reflected a challenging quarter, with earnings falling 70% YoY despite a sequential improvement of 88%. Operating margin narrowed from 11% to 8%. Capex is rising toward ₹205 crore in FY26. While US tariffs weigh on margins, Africa’s demand and long-term global export growth to $751 billion support the outlook.

India’s garments and apparel sector thrived in FY25, with exports hitting US$15.99 billion—a 10% rise from US$14.53 billion in FY24—driving total textile-apparel shipments to a record US$37.7 billion. The domestic market swelled to  Rs 9.3 lakh crore, fueled by rising incomes and e-commerce. Employment sustained 4.5 million jobs amid global supply shifts.

With a market capitalisation of Rs 4,163.69 crore, the shares of Gokaldas Exports Ltd were trading at Rs 568.50 per share, decreasing around 7 percent as compared to the previous closing price of Rs 610.10 apiece.

Q3FY26 Highlights

Gokaldas Exports Ltd announced its financial performance in Q3FY26 recently, in which revenue decreased by 1 percent on a year-on-year basis from Rs 988 crore in Q3FY25 to Rs 979 crore in Q3FY26. However, on a Quarter-on-Quarter basis, revenue slipped by 1 percent from Rs 984 crore in Q2FY26 to Rs 979 crore in Q3FY26.

Moreover, net profit decreased by 70 percent on a yearly basis from Rs 50 crore in Q3FY25 to Rs 15 crore in Q3FY26, meanwhile, on a quarter-on-quarter basis, net profit increased by 88 percent from Rs 8 crore in Q2FY26 to Rs 15 crore in Q3FY26.

Over the past year (Dec 2024 to Dec 2025), operating performance showed volatility. Operating profit declined from  Rs 104 crore in Dec 2024 to  Rs 77 crore in Dec 2025. Operating margin also weakened from 11% to 8%, reflecting pressure on profitability despite relatively stable revenue levels and rising cost structures.

Commenting on the company’s Q3FY26 performance, Mr Sivaramakrishnan Ganapathi, Vice Chairman and Managing Director of Gokaldas Exports, said, “Our India operation delivered a growth of 8% YoY, even after absorbing the first full impact of US tariffs in this quarter, whereas apparel export from India remained flat. With a possible renewal of AGOA on the cards, there is a stronger order book for Africa, improving the outlook. The EBITDA margin was tempered by US tariffs, but was offset by higher productivity gains and diligent cost management measures.”

Capital Expenditure & other updates

The company stands among India’s leading apparel manufacturers, operating for over four decades with a strong global footprint. It caters to 50+ brands across 50 countries, supported by 30+ advanced facilities and 54,000 employees. With an annual capacity of 87 million pieces, its scale, skilled workforce, and international presence drive consistent growth.

The company’s capital expenditure has steadily increased from  Rs 143 crore in FY24 to  Rs 191 crore in FY25. In 9MFY26, it has already spent  Rs 175 crore, and FY26 capex is planned at  Rs 205 crore. Investments are split between modernisation and new capacity, with  Rs 100 crore allocated for upgrades and  Rs 105 crore for expansion in FY26.

Global Apparel Market

US clothing retail sales showed steady growth, rising from $203 billion in CY22 to $215 billion in CY24 before easing to $202 billion in CY25. E-commerce sales remained under pressure, declining 2% in CY25. In contrast, UK retail sales grew 6% in CY25 despite earlier volatility, supported by improving consumer demand.

On the trade front, US apparel imports moderated 0.6% in CY25 after sharp swings earlier, reflecting tariff pressures. EU-27 imports rebounded 4%, while UK imports rose 6%. India’s apparel exports grew 2.4% in FY26, following 10% growth in FY25, indicating resilience despite global demand fluctuations.

India’s textile exports reached about US$37 billion in FY25, with apparel dominating at 43% share, followed by yarn and fabric. Total apparel exports stood at US$16 billion, recovering from FY24. The US remained the largest market at 33%, while the EU accounted for 38% and the UK 9%, highlighting diversified export demand.

India’s apparel sector faces short-term pressure from US reciprocal tariffs and cautious global demand. However, long-term prospects remain strong as global exports are projected to rise from $575 billion in 2025 to $751 billion by 2030. Supply chain realignment, competitive labour costs, and new FTAs with the UK and EU position India for sustainable growth.

Gokaldas Exports is one of India’s leading apparel manufacturers, with over four decades of industry experience. The company designs, manufactures, and exports a wide range of garments to global fashion brands across more than 50 countries. Backed by large-scale production capacity and a strong workforce, it has built a solid global presence.

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