Go Fashion (India) Limited — Q4 FY25 earnings call

Call held 30 Apr 2025

Management summary

Go Fashion (I) reported a robust Q4 FY25, with double-digit growth in revenue, EBITDA, and PAT, alongside a positive SSSG of 2.1%. For the full FY25, the company achieved 11% revenue growth and maintained strong margins. Management outlined ambitious expansion plans for FY26, targeting 120 net new stores, and initiated a pilot for new product categories to diversify offerings and increase customer wallet share, leveraging existing store infrastructure.

Highlights

  • Q4 FY25 Revenue surged by 13% YoY to ₹205 crores.

  • Q4 FY25 EBITDA grew by 16% YoY to ₹62 crores, with a margin of 30.5%.

  • Q4 FY25 PAT increased by 52% YoY to ₹20 crores, achieving a 9.7% margin.

  • Same-Store Sales Growth (SSSG) for Q4 FY25 stood at 2.1%.

  • FY25 Revenue grew by 11% YoY to ₹848 crores, with EBITDA at ₹268 crores (31.6% margin) and PAT at ₹94 crores (11% margin).

  • Net addition of 62 new stores in FY25, bringing total store count to 776.

  • Target to add a net 120 stores annually starting FY26 and achieve positive SSSG in FY26.

  • Pilot launched for new categories (women's everyday wear, selected men's apparel) in 15 existing large stores.

Key financials

2 periods

Headline

  • Revenue
    ₹205 Cr
    YoY +13%
  • EBITDA
    ₹62 Cr
    YoY +16%
  • EBITDA Margin
    30.5%
  • PAT
    ₹20 Cr
    YoY +52%
  • PAT Margin
    9.7%
  • SSSG
    2.1%

FY25 end

  • Total Stores
    776 stores
  • Cash & Equivalents
    ₹249 Cr

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

Growth

  • SSSG & SCSG Growth · FY26 · Medium confidence Positive SSSG
    For FY26, our aim is to improve our SSSG and SCSG (1:50) and achieve positive SSSG in FY26.

    — Gautam Saraogi, Promoter and Chief Executive Officer

Store Additions

  • Net New Stores Store Additions · annually, starting FY26 · High confidence 120 stores
    With these closures done, we aspire to do an addition on a net basis 120 stores annually, starting FY26.

    — Gautam Saraogi, Promoter and Chief Executive Officer

  • Stores finalized for Q1 Store Additions · Q1 FY26 · High confidence Over 30 stores
    We have already mapped out and finalized over 30 stores in Q1 FY26 ensuring that we are well positioned for a strong start of the year.

    — Gautam Saraogi, Promoter and Chief Executive Officer

  • LFS Additions (Gross) Store Additions · FY26 · Medium confidence About 100 stores
    on a conservative basis, I would say about 100 stores we should be adding in FY26. 100 stores is more from a gross perspective.

    — Gautam Saraogi, Promoter and Chief Executive Officer

  • EBO Additions (Minimum) Store Additions · FY26 · High confidence 120 stores

    Previously 120-150 stores → 120 stores

    We as management are quite confident that we will open a bare minimum of 120 and maybe go even higher as the opportunity comes by.

    — Gautam Saraogi, Promoter and Chief Executive Officer

International Expansion

  • First Store Opening International Expansion · May/June 2025 · High confidence May end or June end
    We expect our first store to open either by May end or by the June end marking an exciting milestone in our international expansion.

    — Gautam Saraogi, Promoter and Chief Executive Officer

Store Closures

  • Large Consolidations Store Closures · FY26 · High confidence None
    We don't see any more consolidation in this coming financial year. Maximum what will happen in the normal course of business if we shut four or five stores maximum that will happen, but large consolidations of the nature of what has happened last year will not happen this year at least.

    — Gautam Saraogi, Promoter and Chief Executive Officer

Marketing Spend

  • Ad/Promo Spend as % of Revenue Marketing Spend · FY26 · High confidence 2%
    I think we will be at 2% and I think through the 2% we will be able to do justice for a bottom-wear and for the new pilot as well. So I don't see our AMP increasing in any way.

    — Gautam Saraogi, Promoter and Chief Executive Officer

Profitability

  • Gross Margins Profitability · FY26 · Medium confidence 62-63%
    From a gross margin perspective, I see our gross margins maybe in the range of 62% to 63% or maybe a little higher, but. I think maintaining gross margins and maintaining P&L margins will be our endeavor in FY26.

    — Gautam Saraogi, Promoter and Chief Executive Officer

  • P&L Margins Profitability · FY26 · Medium confidence Maintain
    I think maintaining gross margins and maintaining P&L margins will be our endeavor in FY26.

    — Gautam Saraogi, Promoter and Chief Executive Officer

Working Capital

  • Inventory Days (Core Business) Working Capital · future · Medium confidence 90-95 days
    As far as the core bottom-wear business is concerned, I think 90 to 95 days is the business model, which you have tracked very well, which will also further optimize in the years to come.

    — Gautam Saraogi, Promoter and Chief Executive Officer

Capex

  • New Concept CAPEX per sq ft Capex · for additional space · High confidence ₹2,000-₹2,500
    CAPEX, I think to the extent of Rs.2,000 to Rs.2,500 per square feet we would be incurring of that additional space.

    — Gautam Saraogi, Promoter and Chief Executive Officer

Risks & concerns

  • Challenging demand environment

    medium

    Management noted a 'challenging demand environment' but observed 'early signs of gradual improvement' and expects momentum to build.

    Management acknowledged

  • New category pilot success and KPIs

    medium

    Management stated it's 'very difficult' to give KPI guidance for the new concept and they will 'learn and make mistakes' during the pilot phase.

    Management acknowledged

  • Brand dilution from new category diversification

    medium

    Analysts expressed concern about brand dilution by entering menswear and new women's categories, but management emphasized it's a 'calculated experiment' with a strong focus on women's wear (80-85%) and functional, timeless styles.

    Analyst downplayed

  • Muted volume growth in SSSG

    medium

    SSSG in Q4 FY25 was primarily driven by realization gains, implying muted volume growth, which management expects to improve in coming quarters with better consumer sentiment.

    Analyst acknowledged

Areas of evasion (2)

  • Specific KPIs for new category pilot success
  • Exact volume SSSG figures

Q&A highlights

3 direct
New category diversification and potential brand dilution Direct
We feel the brand can get very well extended to other essential categories of women and very few categories of men... So the positioning here is to create an essential everyday wet type of clothing store like I will give you a clothes example. So how you have like, UNIQLO internationally... we are trying to create that in the women's wear space with a very small experiment in the men's wear space.

Analysts questioned the strategic shift into new categories, particularly menswear, and management clarified the 'Indian UNIQLO' vision and the limited, complementary nature of the menswear pilot to mitigate brand dilution concerns.

Asked by Devanshu Bansal

SSSG driven by realization vs. volume growth Direct
I think in the coming quarters as demand keeps improving, value SSSG will improve and even the volume SSSG will improve. So I think it's a matter of time when this is improved even the other will improve as well.

The analyst highlighted that Q4 SSSG was primarily due to price increases rather than volume, prompting management to acknowledge improving consumer sentiment and express confidence in future volume growth.

Asked by Devanshu Bansal

MBO channel strategy and brand dilution Direct
EBO is going to be the bread-and-butter of the business, which is going to grow the fastest followed by LFS. See, MBO again is a channel strategy like how we had adopted the LFS. It's a more of a customer acquisition channel for us. So, we will give our products only to those MBOs or key accounts where brand dilution will not happen.

An analyst raised concerns about brand dilution by expanding into the MBO channel, leading management to clarify that MBOs are a selective customer acquisition tool, not a primary growth channel, and strict controls will be in place to protect brand image.

Asked by Akhil Parekh

2 min read 5 chapters

Detailed narrative

Strong Q4 and FY25 Financial Performance

Go Fashion (I) delivered robust financial results for Q4 FY25, with revenue surging by 13% YoY to ₹205 crores. EBITDA grew by 16% YoY to ₹62 crores, achieving a 30.5% margin, while PAT saw a significant 52% YoY increase to ₹20 crores, with a 9.7% margin. For the full FY25, revenue reached ₹848 crores (up 11% YoY), EBITDA stood at ₹268 crores (31.6% margin), and PAT was ₹94 crores (11% margin). The company also reported a positive Same-Store Sales Growth (SSSG) of 2.1% for Q4 FY25, indicating a recovery in organic performance.

Strategic Expansion and Store Network Growth

In FY25, Go Fashion (I) added a net total of 62 new stores, bringing its total store count to 776. Looking ahead, the company aims for a net addition of 120 stores annually starting FY26, with over 30 stores already finalized for Q1 FY26. Management confirmed that all major store consolidations are complete, expecting only 4-5 normal course closures in FY26. The company's cash and cash equivalents, including mutual funds and fixed deposits, stood at a healthy ₹249 crores as of March 31, 2025, providing ample liquidity for future growth.

New Category Pilot: 'Indian UNIQLO' Vision

The company has launched a pilot program to diversify into new categories, including women's everyday wear (basic kurtis, shirts, dresses) and selected men's apparel (Polo Shirts, Chinos, Lounge Pants). This initiative, described as creating an 'Indianized UNIQLO' for functional, timeless clothing, will be rolled out in 15 existing large stores (over 1,500 sq ft) in the first six months, followed by 10 more. The objective is to increase wallet share from existing customers, with 80-85% of the new product range focused on women's wear, and the pilot CAPEX estimated at ₹2,000-₹2,500 per square foot for additional showroom space.

Working Capital Management and Profitability Outlook

Go Fashion (I) maintained disciplined inventory management, with inventory days at 102 days in FY25, and aims to optimize this further to 90-95 days for the core bottom-wear business. The company successfully converted 50% of its pre-IndAS EBITDA into operating cash flows in FY25, generating ₹76 crores in operating cash flow and ₹50 crores in free cash flow. For FY26, management expects to maintain gross margins in the range of 62-63% or slightly higher, and aims to sustain overall P&L margins, demonstrating a strong focus on working capital efficiency and profitability.

International Foray and MBO Channel Strategy

The company is set to open its inaugural international store in the Middle East, specifically at Silicon Central Mall in Dubai, by May or June end, in partnership with Apparel Group. Regarding its Multi-Brand Outlet (MBO) channel, management clarified that MBOs serve primarily as a customer acquisition channel, not a core growth driver. They will selectively partner with 'cream and quality' MBOs that adhere to strict discounting controls to prevent brand dilution, while EBOs (Exclusive Brand Outlets) remain the 'bread-and-butter' of the business, contributing 72-75% of revenue and driving the fastest growth.

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