ICICI Securities's research report on Go Fashion India
Go Fashion had a muted start to FY26 with SSSG at -2%, impacted by softer footfalls, LFS channel stress, and shipment delays from Bangladesh. Demand remained subdued, capping volume traction, particularly in value-centric and urban formats, though trends improved towards the quarter end with a strong EOSS response. The company added 27 EBOs (EOP: 803 stores) and remains on track to open 120–130 stores in FY26. ASP improved to INR 805 (vs INR 769 in FY25), aiding 118bps YoY gross margin expansion to 63.0%, even as higher staff costs (up 19% YoY) weighed on profitability. Full-price sales held firm at 96.9%, reinforcing pricing discipline, while Tier 2/3 momentum continues to build. On the promoter front, management highlighted a ~300bps sequential reduction in pledged shares to 37.6% - a positive governance signal. Maintain BUY.
Outlook
We cut our EBITDA estimates by 3%/4% for FY26E/27E; modelling revenue / EBITDA / PAT CAGR of 15% / 16% / 17% over FY25-FY27E. Maintain BUY with a DCF-based revised target price of INR 1,100 (vs INR 1,200 earlier). Key risks: (1) risk of high revenue share from Reliance Retail in LFS channel and (2) likely increased competition from new players entering the category.
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