The shares of this smallcap company surged around 9 percent in Wednesday’s trading session after reporting an increase in net profits by 120 percent QoQ.
Price Movement:
With a market capitalization of Rs. 6,217 crores, the shares of Go Fashion (India) Ltd started Wednesday’s trading session on a flatter note at Rs. 1,057.95. During the trading session, the shares hit a high of Rs. 1,179.90, gaining around 9 percent and are currently trading at Rs. 1,125 apiece.
What Happened:
Such a bullish movemnet in the share price was observed after the company declared it Q1FY25. Quarterly, the revenue jumped by 21 percent from Rs. 181.74 crores during the March quarter to Rs. 220 crores in the June quarter. In addition, the net profits magnified by 120 percent from Rs. 13 crores to Rs. 28.95 crores during the same period.
Comparing the same metrics on a YoY basis, the revenue surged by 16 percent from Rs. 190 crores during Q1FY24 to Rs. 220 crores during Q1FY25. On the other hand, the net profits increased by 9 percent from Rs. 26.27 crores to Rs. 28.65 crores during the same timeframe.
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Looking at the sales mix during the quarter, sales were predominantly generated from Exclusive Brand Outlets, accounting for 69.4 percent. Large format stores contributed 25.6 percent to total sales, while online platforms, MBOs, and other channels made up the remaining 5.1 percent of sales.
In Q1 FY25, the average selling price of Go Fashion was Rs. 777. As of June 30, 2024, there were 734 Exclusive Brand Outlets (EBOs) in operation.
Management Commentary:
Commenting on the Result, Mr Gautam Saraogi, CEO, of Go Fashion (India) Limited said, “Despite the industry-level challenges, we began the year on a strong footing, achieving a 16% Y-o-Y growth in Revenues, reaching Rs. 220 crores.
Our EBITDA increased by 12% Y-o-Y, standing at Rs. 72 crores. Our PAT for Q1 FY25 stood at Rs. 29 crores which grew by 9%. Retail footfall in India declined due to the elections and an intense heat wave.
Despite these short-term challenges, we have maintained a full-price sales ratio of 97%. This demonstrates the resilience of our products even in tough market conditions. Our capability to serve a highly diverse customer base and act as a one-stop solution for bottom wear gives us a competitive edge”.
Important Financial Ratios:
In terms of key financial metrics, the company reported a return on equity of 13.70 percent and a return on capital employed of 14.89 percent for the period spanning FY23-24. Additionally, the net profit margin stood at 10.85 percent during the same timeframe.
Future Outlook:
The company aims to open 120-150 new stores in FY25, a substantial increase from the 94 stores it launched in FY24, taking its total store count to 714. Further, the brand is also focusing on omnichannel strategies, leveraging technology to offer both physical and online shopping experiences to boost its reach in various cities.
Company Profile:
Incorporated in 2010, Go Fashion Limited (GFIL) is one of the largest women’s bottom-wear brands in India. The company is engaged in the development, design, sourcing, marketing, and retailing of a range of women’s bottom-wear products under the brand, ‘Go Colors’.
Written By Vaibhav Patil
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