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Anand Rathi's research report on Go Fashion India

Go Fashion’s Q4 revenue was in line with ARe at 12.7% while EBITDA margin came in ~50bps higher at 30.5%. In FY25, it added 62 net (104 gross) EBOs. After completing store rationalization, management plans to add 120 net EBOs in FY26. Pre-IND AS FCF stood at Rs366m (Rs674m in FY24) impacted by higher working capital led by higher receivables from LFS channel. Cash reserves were Rs2.5bn (Rs2bn in FY24). We are cautiously optimistic about its entry into women’s top wear and men’s wear, as these categories can boost growth and complement its core bottom-wear business. While the new segments face tough competition and higher discounting risks, its proven track record of maintaining market share in the fragmented bottom-wear industry make us confident in its ability to succeed. Our FY26e-27e revenue/EBITDA are ~4%/5% lower on average, on the fewer store additions and lower SSSG.

Outlook

We reduce our target multiple to reflect the revenue growth slowdown. Promoter pledge release, SSSG recovery, and the scaling of new product line remain key monitorables ahead. We retain our Buy, with a revised 12-mth TP of Rs 1123, 17x FY27e EV/EBITDA (earlier Rs1,295, 18x).

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Go Fashion India - 02052025 - anand

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