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Go Fashion posted total revenues of Rs 40.29 crore for Q1FY22. The total revenues for FY21 reduced significantly by 29% to Rs 282.25 crore from Rs 396.84 crore in FY20. The reduction resulted in a weakened financial performance of the Issuer in FY21 which arose due to the temporary closure of a number of stores across India due to lockdown related restrictions leading to decreased customer footfalls at the stores and a significant decrease in same-store sales up to the third quarter of Fiscal 2021. The Issuer posted losses after tax of Rs 3.54 crore in FY 21 and Rs 18.9 crore in Q1FY22 against PAT of Rs 52.63 crore in FY20 and Rs 30.94 crore in FY19.
Revenue from operations from online channels grew to Rs 11.94 crore in FY21 from Rs 3.82 crore in FY20. It was Rs 2 crore for Q1FY22.
The profitability margins showed an increasing trend in FY20 but the margins have declined in FY21 due to the pandemic effect. Return on net worth has been (1.34%), 18.60% and 10.81% for FY21, FY20 and FY19 respectively.
It should be noted that the fixed costs as a percentage of revenue from operations was 35.22%, 37.01%, 62.35%, and 131.88% in Fiscal 2019, 2020 and 2021 and in Q1FY22 respectively. Rental expenses and leave and license fees account for a significant portion of cash outflows.
Title | Q1FY22 | FY2021 | FY2020 | FY2019 |
Total Revenue | 40.29 | 282.25 | 396.84 | 290.98 |
PAT | -18.99 | -3.54 | 52.63 | 30.94 |
EBITDA | -5.90 | 46.35 | 126.5 | 79.99 |
Total Assets | 530.65 | 548.37 | 519.19 | 404.13 |
EBITDA Margin | -14.64% | 16.42% | 31.88% | 27.49% |
Net Margin | -47.13% | -1.25% | 13.26% | 10.63% |
The P/E of the Issue is not ascertainable as the EPS is negative as at the end of Q1FY22 and FY21. At NAV of 50.56 as at the end of Q1FY22, P/BV is 13.65 calculated at the upper price band of Rs 690 per share. Page Industries, Trent, Bata India, Aditya Birla Fashion, and TCNS clothing are shown as peers of Go Colors. The peer group P/E is 130.17 as of 31st March 2021.
Particulars | Page Industries | Trent Limited | Bata India Limited | Aditya Birla Fashion | TCNS Clothing | Go Colors |
Face value per share | 10 | 1 | 5 | 10 | 2 | 10 |
Total Income for FY21 (INR Cr) | 2852.43 | 2794.66 | 1802.60 | 5322.30 | 684.50 | 282.30 |
EPS | 305.35 | -4.11 | -6.95 | -8.23 | -8.85 | -0.68 |
NAV per share | 793.94 | 66.32 | 136.74 | 29.24 | 99.47 | 54.21 |
Return on net worth | 38.50% | -7.70% | -5.10% | -27.50% | -9.20% | -1.25% |
P/E | 130.17 | NA | NA | NA | NA | NA |
The share of organized retailing within women’s apparel has increased from 19% in FY15 to 27% in FY20 and is expected to reach 42% by FY25. Women’s bottom-wear is the fastest-growing category in the women’s apparel segment market and contributes to Rs 135,470 million in FY20 and is expected to grow at a CAGR of 12.35% to reach Rs 243,150 million by FY25.
Go Fashion’s IPO opens on 17th Nov 2021 (fresh issue Rs 125 crore). The Issue comes with a price band of Rs 655-690 per share. The proceeds would be used to roll out 120 new EBOs (Rs 33.73 crore) and working capital requirements (Rs 61.40 crore). The Issue would close on 22nd Nov and list on Nov 30, 2021.
The Issuer has a market share of approximately 8% in the branded women’s bottom-wear (WBW) market in FY20 and is expected to grow in the next 2-3 years. This rapid growth is attributable to a growing female population, increasing number of working women, evolving fashion trends, and rising spending power of consumers.
The Issuer has a well-diversified product portfolio offering 50 bottom wear styles available in a range of over 120 colors starting with a price range of Rs 225-1600 and has a pan –India distribution network that enhances its brand visibility.
Challenges that the Issuer faces currently, impact its financial profile due to the pandemic and competition from the unorganized market. The Issuer’s financial performance needs to be tracked for the next couple of quarters.
The Issue comes with a mixed bag of risks and returns. The Issuer has good growth prospects in the long term when seen from its same-store sales growth in FY20 which was 11.37%. WBW is a universal category that coordinates with all kinds of outfits and thus drives repeat purchases. The Issuer plans to grow sales through online channels, and focus on establishing additional EBOs across tier 2 and tier 3 cities. Hence risk-takers may subscribe with a long-term perspective to the IPO.
Review By CA Priyanka Choudhary on 11th Nov 2021
About CA Priyanka Choudhary
Priyanka Choudhary Jain is a Chartered Accountant and an experienced credit analyst. She has worked with CRISIL as Senior Credit Analyst on ratings assignments including business and financial analysis in Corporates as well as the Public Finance Sector.
Email: [email protected]
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