BENGALURU (Reuters) – Shares of India’s Gokaldas Exports’ surged 20% to a record high on Tuesday, a day after it unveiled a deal that would help it ship apparel duty-free to its key market of the United States.
Gokaldas’ shares, which have already more than doubled so far this year, jumped to an all-time high of 735.35 rupees, with trading volumes that were about 13 times the daily moving average.
The stock’s surge came a day after the apparel manufacturer said it would buy Dubai-based Atraco Group for $55 million in a deal that will also give it access to other key export markets and boost production.
However, Gokaldas said a key attraction was Atraco’s duty-free access to the United States, compared with its current duties of 11% to 28%. While Gokaldas call the U.S. a key market, it has not said how much the country contributes to sales.
Atraco has one manufacturing unit in Ethiopia and four in Kenya, and exports about 95% of its output to the United States.
Gokaldas’s net profit has fallen in the first two quarters of this calendar year due to sluggish demand, after having risen for six consecutive quarters, according to Refinitiv data.
However, after dropping following the latest quarterly results on Aug. 8, the stock has surged nearly 53%, including the gains on Tuesday.
(Reporting by Sethuraman NR in Bengaluru; Editing by Savio D’Souza)