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Incorporated in 2010, Go Fashion (India) Limited 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'. The company offers one of the widest portfolios of bottom-wear products among women's apparel retailers in terms of colors and styles. Go Fashion serves their customers primarily through their extensive network of 459 exclusive brand outlets (“EBOs”) (including 12 kiosks operated on a “company owned and company operated” (“COCO”) model and 11 franchise stores) that are spread across 23 states and union territories in India, as of September 30, 2021.

Positives: (a) One of the largest women's bottom-wear brands in India (b) Wide, well-diversified, product portfolio and first-mover advantage (c) the company has 459 exclusive brand outlets (EBOs) that are spread across 23 states and union territories in India (d) Strong financial performance record.

Investment concerns: (a) Increase in competition (b) Slowdown in the economy could impact the overall revenue of the company.

Outlook & Valuation: In terms of valuations, the post-issue FY20 EV/EBITDA works out -30.2x to (at the upper end of the issue price band), which is almost in similar range compared to its peers TCNS Clothing Co. (FY20 EV/EBITDA -29.3x). Further, Go Fashion India has better track record of revenue growth, higher operating margin & high Return on equity compared to TCNS Clothing Co. Considering all the positive factors, we believe this valuation is at reasonable levels. Thus, we recommend a subscribe rating on the issue.

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SEBI Registration number is INH000000164

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