Gokaldas Exports is actively promoting India as a reliable sourcing destination

Gokaldas Exports was established in 1979 and stands as a premier apparel manufacturer and one of India’s largest exporters of apparel. With an annual turnover of approximately $ 275 million, the company boasts over 40 years of industry experience. Sivaramakrishnan Ganapathi, Vice-Chairman & Managing Director, Gokaldas Exports, in this interview with Divya Shetty, discusses current trends and expansion plans of the company.

Kindly brief us about your company.
Our manufacturing capabilities are extensive, with the capacity to produce 36 million apparel pieces annually across 20+ fully integrated facilities. We take pride in our diverse and skilled workforce, with more than 29,000 employees, of which 75 per cent are women. Our product range spans outerwear, sportswear, casual wear, and formal wear for women, men, and children. We offer comprehensive services from design and development to cutting, sewing, embroidery, poly-fill, quilting, and printing, laser finishing, and washing. Our supply chain extends to all continents reaching out to over 50 countries. Our customers are prominent international fashion retailers, wholesalers, and global brands, primarily concentrated in the USA and Europe. They rely on us for a wide variety of garments, including fashion wear, casual wear, outerwear, and sportswear for all seasons and demographics.
How did your performance fare in FY23, and what were the primary challenges faced during this period? Despite these challenges, how did you successfully achieve growth, and could you highlight any remarkable accomplishments from FY23?
In FY23, Gokaldas Exports demonstrated remarkable resilience and financial performance. We began the year on a strong note, with significant revenue and profit growth driven by a robust order book and efficient capacity utilisation. However, market conditions took a turn in the latter half of the year, resulting in reduced volumes as major customers liquidated excess inventory and, faced a sluggish retail market. Despite these challenges, we effectively managed our operations, consistently expanding operating margins delivering superior quarterly net profits. For the full year FY23, we recorded a remarkable 25 per cent revenue growth. We also encountered several key challenges in the latter half of FY23, primarily stemming from global market volatility. Central banks were grappling with high inflation and responded with elevated interest rates. Excess inventory had accumulated due to post-COVID demand surges and supply chain bottlenecks, leading brands to reconsider their order volume. While inflation remained high, volume growth remained modest. We managed to achieve growth despite these challenges through a combination of factors. We maintained a strong order book and efficiently utilised our manufacturing capacity during the initial part of the year. Our focus on operational efficiency and financial prudence contributed to our resilience.
In summary, we faced significant challenges in FY23 but showcased resilience and adaptability, achieving strong financial performance, operational efficiency, and prudent financial management. Our ability to navigate difficult market conditions while maintaining growth underscores our commitment to excellence in the apparel manufacturing industry.
Despite the challenging market conditions, we achieved several standout accomplishments in FY23. We recorded a remarkable 25 per cent revenue growth and a substantial 48 per cent net profit growth year-on-year. Our operating performance was exceptional, with a 116 basis point increase in EBITDA margin over the previous year.
During the year, we invested Rs 38 crore in modernisation and upgrades, as well as Rs 97 crore in new capacity and projects. Notably, we inaugurated Phase 1 of our Madhya Pradesh facility, introducing a 1,00,000 sq ft production area, and commercial production began in June 2023. Additionally, our plans to set up a manufacturing unit in Tamil Nadu, expected to contribute materially to FY2025 revenues, demonstrate our commitment to growth and expansion.
What is your current assessment of India’s textile industry?
The Indian textile and apparel industry is estimated to be valued at a substantial $ 165 billion and within this industry, the domestic market holds the lion’s share, constituting 76 per cent of the total, while exports account for the remaining 24 per cent. Over the past decade, the domestic market has demonstrated steady growth, achieving a Compound Annual Growth Rate (CAGR) of approximately 8 per cent from FY11 to FY23. Projections indicate that this growth trajectory will continue, with the domestic market expected to expand at an even higher CAGR of 10 per cent, reaching an impressive $ 250 billion by FY31.
Several factors underpin this remarkable growth in the Indian textile industry. One key driver is the soaring demand for premium-quality clothing and footwear items. This heightened demand is primarily driven by shifting consumer preferences, a burgeoning middle class, and increased disposable incomes. As consumers increasingly seek higher-quality products, this trend has unlocked new and exciting opportunities for both manufacturers and retailers, propelling the industry forward.
Despite the promising growth prospects, it’s essential to acknowledge the challenges that the Indian textile industry faces. These include intense global competition, and the rapid evolution of fashion trends. To remain competitive, manufacturers must continuously adapt to evolving consumer preferences and navigate the ever-changing dynamics of the market.
What is the global standing of the Indian textile industry (and/or textile engineering industry)? How can India become more competitive globally?
India holds a significant position in the global textile industry. As a country, we are the world’s second-largest producer of textiles and garments, and we rank as the sixth-largest exporter of textiles, including apparel, home textiles, and technical products. Our textile and apparel sector accounts for about 5 per cent of the global trade in textiles and apparel. India is known for our production of key textile raw materials like cotton and jute, and we rank among the largest producers of these materials globally. India also boasts of being the second-largest producer of silk worldwide, a significant contribution to the global silk industry. One of our key competitive advantages is our cost-effectiveness. We benefit from competitive manufacturing costs due to our abundant raw materials and cost-effective labour force. Our skilled workforce, coupled with our competitive labour costs, positions us as a strong contender in the global textile market. Our textile industry is well-integrated, particularly in the cotton segment, and we offer competitive power costs, creating a favourable manufacturing environment. Additionally, our improving port connectivity facilitates international trade. While there’s room for infrastructure improvement, the proactive support of our government and favourable geopolitical conditions contribute to the industry’s growth.
To further enhance our global competitiveness, we are actively pursuing bilateral trade agreements. We have successfully signed free trade agreements (FTAs) with countries like the UAE and Australia, and we are in the final stages of discussions with the UK. Additionally, we are exploring trade discussions with diverse nations, including the European Union, the United States of America, Canada, and South Korea. These initiatives aim to create new trade opportunities and expand our market access. To bolster our position in the global market, the Government introduced the Production Linked Incentive (PLI) Scheme, focusing on man-made fibre (MMF) and technical textiles. With a substantial budget allocation, this initiative incentivises investments and technological advancements to strengthen our dominance in MMF, which constitutes a significant portion of global textile fibre consumption.
The Indian government is actively encouraging global businesses to diversify their sourcing strategies, aligning with the global trend of exploring alternatives to China, often referred to as “China+1” opportunity. This approach allows us to offer reliable and cost-effective sourcing options to global businesses. Investing in skill development and vocational training programs remains a priority to maintain and enhance the quality and quantity of our skilled workforce, reinforcing our competitive advantage. Furthermore, embracing innovation and adopting advanced technologies in textile manufacturing processes can improve efficiency, reduce costs, and enhance product quality, making our textiles more competitive on a global scale.
Are the government policies to boost the industry’s growth working on the ground? What else should the government do to propel growth?
The government’s initiatives aimed at boosting the industry’s growth are indeed noteworthy and have the potential to benefit the sector substantially. However, their effectiveness on the ground hinges on successful implementation and execution.
The government’s efforts to establish bilateral trade agreements with countries like the UAE, Australia, the UK, the European Union, the United States, Canada, and South Korea are commendable. These agreements hold the potential to open up new avenues for trade and expand market access for Indian textile products.
A stable policy regime and continuation of the Rebate of State and Central Taxes and Levies (RoSCTL) scheme provides essential policy stability for export companies. To maximise its impact, the government should regularly review the scheme to keep it relevant and responsive to the evolving needs of exporters.
The Production Linked Incentive (PLI) Scheme targeted at the man-made fibre (MMF) sector is a significant step towards strengthening India’s position in this critical segment. To ensure its success, the government should actively engage with industry stakeholders, monitor progress, and make adjustments as needed to achieve its goals.
The Mega Integrated Textile Region and Apparel (MITRA) Parks Scheme holds the promise of attracting investments, driving innovation, and creating a robust textile ecosystem. Timely implementation is key, and creating strong linkages with research and development institutions can accelerate innovation and technology adoption in the textile sector.
In addition, the State governments are playing a pivotal role in attracting investment for the textiles and apparel companies as they are the major job-creating avenues, especially the garment industry which employs the highest number of people for capital invested.
What kinds of trends are you seeing in the market at present? How is your company gearing up to tap these trends?
In the current market landscape, several trends are shaping the textile and apparel industry, and our company, Gokaldas Exports, is actively preparing to tap into these trends. Here are some of the key trends and our strategies:
⦁ Shifting market share: Geopolitical tensions and rising labour costs have led to a potential shift away from China as the dominant player in textile and apparel exports. China’s market share has steadily declined over the past decade due to various factors, creating opportunities for emerging Asian countries like India.
⦁ Consolidation of supplier base and emphasis on sustainability: Leading apparel brands are consolidating their supplier base, preferring to work with a select number of vertically integrated suppliers. This consolidation allows brands to streamline the end-to-end product journey and meet higher expectations for quality and sustainability. A shift towards sustainable resources is one of the driving trends for the textile industry. As concerns over climate change grow, consumers seek more environmentally-friendly options. In response, the textile industry has shifted to more sustainable strategies to appeal to buyers.
Gokaldas Exports is gearing up to capitalise on these trends by enhancing our production capabilities, efficiency, and competitiveness. We are actively promoting India as a reliable sourcing destination for global brands and retailers. We are also closely monitoring geopolitical developments and ensuring that our sourcing strategies are agile and adaptable to changing trade dynamics. Our commitment to environmental, social, and governance (ESG) standards aligns with the sustainability goals of our customers, ensuring that our products meet the highest ethical and environmental standards.
What are your expectations & growth plans for FY24?
In FY24, our expectations and growth plans for Gokaldas Exports are aligned with our commitment to seizing emerging opportunities and driving sustainable growth. Our plans include
⦁ Investment in modernisation and capacity expansion: In FY23, we allocated significant investments, amounting to Rs 135 crore, for modernisation, upgrades, and new capacity and projects. This was aimed at enhancing our manufacturing capabilities and efficiency.
In FY24, we plan to continue our strategic investments. These investments will be made judiciously, taking into consideration market conditions and the evolving needs of our business.

⦁ Expansion of manufacturing facilities: We successfully inaugurated Phase 1 of our Madhya Pradesh facility, introducing a 1,00,000 sq ft production area to accommodate 2,000 employees. Commercial production at this facility commenced in June 2023. Additionally, we are actively setting up a new manufacturing unit in Tamil Nadu, with expectations for production to commence in the second half of FY2024. This expansion is projected to make a material contribution to our FY2025 revenues.

⦁ Strategic acquisition of Atraco Group: We recently entered into a definitive agreement with Atraco Group, an apparel manufacturing company with operations in UAE, Kenya, and Ethiopia. This acquisition presents significant advantages, including access to low-cost manufacturing locations, duty-free access to the US market, and the opportunity to tap into Atraco Group’s substantial customer base. We plan to acquire 100 per cent of Atraco Group’s equity, leveraging the synergies between our companies to drive growth.
We are optimistic about the long-term prospects of the industry, and we are well-prepared to capitalise on growth opportunities. The shift in global sourcing patterns and our strategic initiatives, including facility expansions and acquisitions, will play a pivotal role in our journey toward a fashionable, sustainable, and profitable future. We are grateful to our dedicated team, supportive investors, and shareholders for their trust and commitment, and together, we are ready to participate and lead the transformation of the Indian apparel industry.