Motilal Oswal initiates coverage on Go Fashion shares, sees 31% upside

Go Fashion posted a PAT CAGR of 20 percent over FY19-25.

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26 Aug, 2025 12:21

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Domestic brokerage Motilal Oswal kicked off coverage on retailer Go Fashion Ltd, seeing strong growth prospects for the fashion player as a result of its strong brand presence and first-mover advantage.

The brokerage initiated coverage with a bullish 'buy' rating, seeing a 31 percent upside with a price target price of Rs 1,127 per share, against the CMP of Rs 861 apiece.

Motilal Oswal noted that Go Fashion, operating under the brand 'Go Colors', is a pioneer and category leader in the women’s bottom wear market, holding an eight percent share of the organized market.

Leveraging its first-mover advantage, Go Colours has successfully established a direct-to-consumer (D2C) brand, offering a wide range of products through 776 exclusive brand outlets (EBOs) across 180 cities.

"Positioned as a core wardrobe essential, bottom wear addresses functional, repeat-use needs and is less susceptible to fashion cycles compared to top wear. Its year-round relevance supports steady demand and operational stability, enabling companies to exercise strong pricing discipline," the brokerage added.

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According to the brokerage, the firm's success stems from:

1. Its exclusive focus on women’s bottomwear, a structurally underserved category, which enabled the company to build deep domain expertise, high product variety, and strong brand recall.
2. Its early transition to the EBO model, which provided complete control over pricing, merchandising, and consumer experience. This distinctive approach enabled Go Colours to establish a scalable, brand-led retail presence across metros and Tier 2/3 cities, reinforcing its leadership in a high-repeat, functional apparel category.

Going ahead, the brokerage sees Go Fashion's revenue posting a 16 percent CAGR over FY25-28, which will be led by an 18 percent growth in EBO/online channels. EBITDA and PAT are projected to clock 19 percent and 20 percent  CAGR, over FY25-28.

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