Buy Go Fashion; target of Rs 1300: Emkay Global Financial

Emkay Global Financial is bullish on Go Fashion has recommended buy rating on the stock with a target price of Rs 1300 in its research report dated May 04, 2024.

Broker Research

May 06, 2024 / 16:02 IST

Buy

26 Aug, 2025 12:21

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Emkay Global Financial's research report on Go Fashion

GO’s Q4 print was weak, albeit results were largely in line and outperformance (vs. peers) continued with 15% topline growth. SSG was low at +1%/0% in Q4/FY24 and GO is targeting 2-3% SSG for Q1. Given the muted macros, FY24 has been a year of WC optimization, as GO generated Rs1.1bn operating cash vs. cash-breakeven in FY23, which addresses a key concern. Encouragingly, the benefit of RM moderation also percolated with ~100bps GM gains in FY24, 50bps more is expected in FY25. After a slow FY24, network expansion is also expected to improve with 120-150 net additions in FY25 (vs. 84 in FY24).

Outlook

Factoring-in near-term low SSG leads to a 6-7% EBITDA cut, giving us a revised TP of Rs1,300 (vs. Rs1,350). GO remains our top idea in the apparel space, with earnings growth reviving in FY25 and 25% correction from recent highs. Faster SSG turnaround and early closure of promoter pledge are potential upsides.

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