Buy Go Fashion (India); target of Rs 1377: Anand Rathi

Anand Rathi is bullish on Go Fashion (India) has recommended buy rating on the stock with a target price of Rs 1377 in its research report dated May 04, 2024.

Broker Research

May 08, 2024 / 17:48 IST

buy

26 Aug, 2025 12:21

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Anand Rathi's research report on Go Fashion (India)

Go Fashion’s FY24 revenue/EBITDA grew ~15%/14% y/y. The challenging demand situation kept SSSG flat y/y. In FY24 84 stores (net) were opened, below the ~100 guidance, due to more closures. Lower raw material prices aided the FY24 gross margin expansion of 105bps y/y to 61.7%. For this reason, management expects a further 50bp rise in the gross margin. Better inventory management led to consistently better WC days, leading to healthy cashflows. The company guided to 120-150 stores (net) in FY25, and targets 2-3% SSSG in Q1. Subdued demand leads us to lower our FY25e/26e revenue/EBITDA ~6.1% on average. Our EPS cut is sharper due to higher interest and depreciation expenses on stores added. We are positive on the company as it maintains its growth trajectory and strong operational efficiencies. Ahead, promoter pledge release, SSSG improvement are key.

Outlook

We retain our Buy, at a lower 12-mth TP of Rs1,377, 22x FY26e EV/EBITDA (earlier Rs1,499, 22x FY26e EV/EBITDA).

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