Shares of Gokaldas Exports Ltd. continued to rise for the second consecutive session on Wednesday.
The stock surged to an upper circuit of 20% on Tuesday, after the company acquired UAE-based Atraco Group, an apparel manufacturer, through one of its subsidiaries.
The acquisition for $55 million is expected to unlock opportunities in the U.S. market. Gokaldas Exports aims to sustain a steady 20% year-on-year revenue growth rate, Sivaramakrishnan Ganapathi, vice chairman and managing director of the garment exporter, told BQ Prime’s Niraj Shah.
“The real growth possibilities of this venture will be tapped into once we receive the necessary regulatory approvals,” he said. The approvals are expected by the end of October. Atraco’s new factory offers scope for expansion because of the addition of new production lines, which will create valuable opportunities for growth, Ganapathi said.
Shares of Gokaldas Exports rose as much as 11.20%, before pairing gains to trade 6.63% higher at 10:18 a.m. This compares to a 0.51% rise in the NSE Nifty 50.
The stock has risen 113.8% on a year-to-date basis. Total traded volume so far in the day stood at 17 times its 30-day average. The relative strength index was at 90, implying that the stock may be overbought.
Of the 10 analysts tracking the company, nine maintain a ‘buy’ rating and one recommends a ‘hold’, according to Bloomberg data. However, the average 12-month consensus price target implies a downside of 13.9%.