Go Fashion (India) Limited — Q2 FY26 earnings call

Call held 7 Nov 2025

Management summary

Go Fashion (India) Limited reported a modest 7% YoY revenue growth to INR224 crores in Q2 FY26, with EBITDA and PAT growing 5% and 6% respectively. The company's store expansion guidance for FY26 was revised downwards to 80-90 net new stores due to muted same-store sales growth and a cautious approach to profitability. Management noted signs of demand revival in the festive season and is focusing on product innovation in bottom wear and measured expansion, while also experimenting with new categories and international markets.

Highlights

  • Q2 FY26 Revenue of ₹224 crores, up 7% YoY.

  • Q2 FY26 EBITDA of ₹67 crores, up 5% YoY, with a margin of 29.7%.

  • Q2 FY26 PAT of ₹22 crores, up 6% YoY, with a margin of 9.7%.

  • H1 FY26 Revenue of ₹447 crores, up 4% YoY, with an EBITDA margin of 30.3%.

  • Total store count reached 812 with 36 net new stores added in H1 FY26.

  • FY26 store addition guidance revised down to 80-90 net stores from 120.

  • Gross margin expected to remain steady at 62-63% for H2 FY26.

  • Cash and cash equivalents stood at ₹259 crores as on 30th September, 2025.

Concerns

  • Muted Same-Store Sales Growth (SSSG)

Key financials

4 periods

Headline

  • Cash and Cash Equivalents
    ₹259 Cr
  • Total Store Count
    812 stores

Q2 FY26

  • Revenue
    ₹224 Cr
    YoY +7%
  • Gross Profit
    ₹140 Cr
    YoY +7%
  • GP Margin
    62.6%
  • EBITDA
    ₹67 Cr
    YoY +5%
  • EBITDA Margin
    29.7%
  • PAT
    ₹22 Cr
    YoY +6%
  • PAT Margin
    9.7%

H1

  • FY26 Revenue
    ₹447 Cr
    YoY +4%
  • FY26 Gross Profit
    ₹289 Cr
    YoY +5%
  • FY26 GP Margin
    62.8%
  • FY26 EBITDA
    ₹135 Cr
  • FY26 EBITDA Margin
    30.3%
  • FY26 PAT
    ₹44 Cr
  • FY26 PAT Margin
    9.9%
  • FY26 ROCE (excl. Ind AS)
    16.4%
  • FY26 ROE (excl. Ind AS)
    12.7%

H1 FY26

  • New Stores Added
    36 stores

What they filed

Q1 FY27: revenue up 0.0%, net profit down 27.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue209 215 205 223 224 +7%195 −9%196 −4%223 +0%
EBITDA64 70 62 69 67 +5%52 −26%50 −19%61 −12%
Net profit21 24 20 22 22 +5%7 −71%8 −60%16 −27%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Store Expansion

  • Net Store Additions Store Expansion · FY26 · Medium confidence 80-90 stores

    Previously 120 stores → 80-90 stores

    we plan to open around 80 to 90 stores on a net basis for the full FY '26.

    — Gautam Saraogi, Promoter and Chief Executive Officer

Profitability

  • SSSG Profitability · Way forward · Medium confidence low single-digit
    our first step would be to achieve low single-digit SSSG and improve store-level productivity and throughput.

    — Gautam Saraogi, Promoter and Chief Executive Officer

  • Gross Margin Profitability · H2 FY26 · High confidence 62-63%
    But I think from a gross margin perspective, things will look very steady at between 62% and 63% of gross margin.

    — Gautam Saraogi, Promoter and Chief Executive Officer

Pricing

  • ASP Growth Pricing · Y-o-Y · High confidence 2-3%
    Well, Devanshu, the ASP will grow at about 2% to 3% on a Y-o-Y basis.

    — Gautam Saraogi, Promoter and Chief Executive Officer

Marketing

  • Marketing Budget Marketing · Yearly · High confidence 2% of revenue (INR17-20 crores)
    Our marketing budget is about 2%. And we will maintain that 2% because we feel spending about INR20 crores a year in marketing is a good number to drive footfalls. So, spending that INR17 crores to INR20 crores, which is about 2% of revenue and bring in a new product category not new as in the existing bottom wear, bringing in newer products and colors and collections that will also drive.

    — Gautam Saraogi, Promoter and Chief Executive Officer

Debt

  • Pledged Shares Reduction Debt · next few months · High confidence >50% (25-30 lakh shares)
    So, we estimate about 25 lakh to 30 lakh shares getting de-pledged soon. So, that is our estimate.

    — Gautam Saraogi, Promoter and Chief Executive Officer

Risks & concerns

  • Muted Same-Store Sales Growth (SSSG)

    high

    SSSG remained muted in Q2 FY26 and has been flat for 10 consecutive quarters, leading to a revision in store expansion plans.

    Management acknowledged

  • Impact of Income Tax Search

    medium

    Income tax search conducted on Oct 7-10, 2025, across company premises; management stated no major findings or concerns, and no store operations were interrupted.

    Analyst downplayed

  • Prior Over-optimistic Guidance

    medium

    Management admitted to 'incorrect guidance' in the past regarding store openings, leading to repeated revisions, and committed to being more careful in the future.

    Analyst acknowledged

Areas of evasion (1)

  • Technopak report details (deferred)

Q&A highlights

2 direct
Industry Study & Demand Revival Partial
So as far as that Technopak report is concerned, maybe after a couple of weeks, I'll be able to give better clarity on that particular report... But from what we have been noticing over the last few months... demand has revived.

Management acknowledges awaiting external validation for market trends and provides initial qualitative insights into demand, indicating a cautious approach to market assessment.

Asked by Devanshu Bansal

Store Opening Guidance Revision Direct
Yes. so, Avinash, we saw that -- obviously, you can see in our sales numbers also, growth has been very slow. And when growth is slow, we have to be a little careful because we don't want to add stores which can create a big impact on the P&L as well. So, we are being a little measured in our store expansion.

This question directly addresses the significant downward revision in store expansion plans, revealing the impact of current sales performance and a more cautious strategy.

Asked by Avinash Karumanchi

Income Tax Search Direct
As of now, from what we have seen and how they have concluded the search, there have been no major findings and nothing to be concerned about.

Addresses a material non-financial event that could impact investor sentiment, providing reassurance about the outcome and its minimal operational impact.

Asked by Ankit Kedia

2 min read 7 chapters

Detailed narrative

Q2 & H1 FY26 Financial Performance

Go Fashion (India) Limited reported Q2 FY26 revenue of INR224 crores, a 7% YoY increase, with EBITDA at INR67 crores (5% YoY growth) and PAT at INR22 crores (6% YoY growth). For H1 FY26, revenue stood at INR447 crores (4% YoY growth), with an EBITDA margin of 30.3% and PAT margin of 9.9%. Cash and cash equivalents were INR259 crores as of September 30, 2025, reflecting a healthy balance sheet.

Revised Store Expansion Strategy

The company added 36 net new stores in H1 FY26, bringing the total count to 812. However, the full-year FY26 store addition guidance was revised downwards to 80-90 net stores from an earlier target of 120. This revision is primarily due to muted same-store sales growth and a cautious approach to maintaining P&L margins, with management aiming for a balanced 50-50 split between metro and non-metro expansions.

Focus on Bottom Wear Innovation and Demand Revival

Despite muted SSSG, management noted signs of demand revival, particularly in key markets during the festive season, with positive impact on volumes. The core strategy remains positioning Go Colors as a one-stop destination for women's bottom wear. The company is strengthening its design and product development capabilities, with several exciting new bottom wear launches planned for H2 FY26, expected to drive volumes and sales.

New Business Initiatives and Pilot Performance

Go Fashion is encouraged by early responses from pilot launches in new categories (everyday wear for women and men) and international stores in the Middle East. Two pilot stores in Chennai for the new concept are achieving over INR1,000 sales per square foot per month based on September data, exceeding initial targets. This expansion is viewed as a long-term growth engine, not a solution for short-term SSSG issues.

Income Tax Search and Pledge Status

The company underwent an income tax search from October 7-10, 2025, across its offices and warehouses. Management confirmed no major findings or concerns, and store operations were uninterrupted. Regarding promoter pledges, which increased due to stock price fall, the company plans to reduce over 50% (25-30 lakh shares) within the next few months, indicating a proactive approach to addressing investor concerns.

Customer Insights and Product Mix Evolution

The average customer age profile remains stable at 27-33, with increasing traction from younger audiences. The product mix has shifted post-COVID, with churidars and leggings now constituting about 35% of business (down from 50-55% pre-COVID), while trousers and pants categories have seen significant growth due to fashion shifts. New customer acquisition is healthy at over 20%, and repeat purchase rates are stable at 40-45%.

Financial Outlook and Margin Stability

Management expects ASP to grow 2-3% YoY, driven by product mix changes rather than price hikes. For H2 FY26, gross margins are anticipated to remain steady at 62-63%. While EBITDA margin guidance was difficult to provide, the company is committed to disciplined expansion and qualitative marketing spend (around 2% of revenue, or INR17-20 crores annually) to drive footfalls and growth.

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