ICRA revises ratings of Gokaldas Exports’ bank facilities

Credit rating agency, ICRA has revised the rating outstanding on the Rs 24.5 crore term loan facilities of Gokaldas Exports from LA- to BBB+. The rating agency has also revised the rating outstanding on the Rs 495.0 crore fund based facilities of the company from A2+ to A2. The outlook on the long-term rating has been revised from negative to stable.

The revision in ratings reflects the steady deterioration in financial profile, resulting from weaker than expected operating performance, as characterized by losses over the last few quarters. The company has been incurring operating losses since the last quarter of fiscal 2009-10, due to rigid pricing on exports to the company’s key markets of US and Europe amidst the sharp rise in input costs of raw material and labour.

Gokaldas Exports is one of the larger apparel exporters from India. The company caters mainly to renowned brands in the markets of US and Europe such as Gap, Nike, Levis and H&M. Its product profile mainly comprises woven garments, and its main products include bottom wear, outer wear (includes sportswear and winter wear), active wear and casual wear. It operates from over 40 locations, largely in and around Bangalore.