This multibagger garment maker's shares zoomed 20% to hit one-year high today; time to buy, sell or hold?

Shares of Gokaldas Exports Ltd rose sharply in Tuesday's trade, extending their gains for the third straight session. The stock today rallied 20 per cent to hit a 52-week high of Rs 736.30 against its previous close of Rs 613.60. The multibagger stock has soared 107.23 per cent in the past one year and 99.78 per cent in 2023 so far. Today's sharp up move in the share price came after the company said it has expanded its global presence through a $55 million acquisition. "Gokaldas, through its wholly owned subsidiaries, has entered into an agreement to acquire Atraco Group (Atraco), a leading manufacturer of apparel with a strong market position and customer relationships across US and Europe, the company stated in an exchange filing.

"Atraco operates with a network of four manufacturing units in Kenya and one in Ethiopia producing about 40 million garments annually. Atraco Group's revenue is approximately $107 million with a profit after tax of $7.2 million for the calendar year 2022. The equity value of the transaction is $55 million and the same will be funded by a mix of debt and internal accruals. The transaction will comprise of acquisition of shares and assets and will be subject to customary regulatory approvals. It is expected to be closed by Q3 FY24 (Oct-Dec 23)," it further said.

Technical analysts largely remained divided on the counter. Some suggested that it may continue to rise, while a few believed that investors should book profits at current levels.

Osho Krishan, Senior Analyst, Technical & Derivative Research at Angel One, said, "Gokaldas Exports has seen a decisive spurt in price-volume post an acquisition deal and clocked new highs. On the broader time frame, the stock is in a stellar bull run, forming a cycle of higher highs – higher lows on all charts. The stock looks poised to continue its upward journey. On the levels front, the bullish gap of Rs 645-615 is likely to augur well for the bulls and till it sustains the same, any dip could be seen as a buying opportunity from a short to medium-term perspective."

Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher, said, "The stock is locked in an upper circuit and the RSI (Relative Strength Index)hovering near the highly overbought zone. The near-term support would be at around Rs 550 level, with the overall trend remaining strong."

AR Ramachandran from Tips2trades said, "The stock price is bullish but also very overbought on the daily charts with next resistance at Rs 761. Investors should book profits at current levels."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "The stock is trading around the Rs 735 mark, which is way above its all-major exponential moving averages. As we advance, there is a possibility of reversion to mean. Fresh longs are not advised as of now."

Meanwhile, Indian equity benchmarks were trading higher today, led by gains in metals, automobile and technology stocks.

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